Market entry plays an integral role in the international expansion of business, and it’s crucial to get it right.
This means being aware of potential risks, and being as well-informed as possible on the best strategy to take to suit your business and circumstances as you go global.
The first step is to determine the market you want to enter. At this early stage, your company might benefit from seeking the advice of international expansion experts, such as Galvin International,who can help you determine this, as well as help you understand and prioritise the right locations for your business.
Then, your company will need to do a gap analysis. Some markets will require more adaptation than others whether you offer services or products. For example, people’s food tastes, religious customs and languages will all be determining factors of if, and how much, you will need to adapt for your new chosen market when expanding your business abroad. This will help you make sure you’ve chosen to expand to a country where it’s economically viable to do so, and where the costs will be outweighed by the benefits later on down the line.
Setting Out Strategy
You must then decide how your business should enter the market. For all companies going international, this will depend on local regulations, as well as your company’s resources and timescale. You can opt to build your own team of employees and your own businesses, or partner with a similar business that has the infrastructure to handle an acquisition.
For the former option, you’ll need more time and a bigger investment, but having your own business and team internationally will mean you retain control over the expansion. However, this also depends on the market you’re expanding into, as some countries’ regulations will require you to have a local partner.
Alternatively, having a partner means both the risks and rewards are shared. However, having local expertise on hand will be invaluable, especially if the new market is very different from the one your business currently operates from. It won’t require as much capital investment upfront, however, the downside is that it will require you to compromise and align aims, objectives and ways of running a business.
Whichever route you choose, one of the most important steps when your company is preparing for market entry during international expansion is to ensure you have made steps to learn the customs, culture, regulations and language of the country you’re going into. This may involve hiring local employees to ensure all communications, labelling, contracts and correspondence is culturally sensitive.
You will also need to look at the market conditions in the country you’re expanding into, as well as wages, and which incentives and benefits your competitors are offering employees, to ensure your company is a competitive employer from the very start. Reputation is important in every sector and at every level, and as a newcomer, you want to make a positive and lasting impression.