Byline: David Link, CEO & Founder of Verrency
Overseas expansion is often considered for homegrown companies looking to increase their revenue and customer base. While the lure of international expansion can be promising, it is no easy path in understanding a new environment and also being able to upscale existing operations.
Your capital and human resources might take a significant hit in the first few months of entering new markets. If not planned properly, it might significantly affect the profitability of your local operations. It’s imperative to assess the pros and cons of an international expansion to inform whether the rewards outweigh the risks.
Understand what you can offer to global markets
The best place to start is by assessing whether your company’s Unique Value Proposition (UVP) genuinely applies to the markets that you are looking to enter. Is there a demand for your products or services in these markets? If there are competitors that are already offering similar products, how do yours stand out?
This due diligence might seem like a no brainer but more often than not, companies are eager to jump on the opportunity to expand globally without taking the necessary steps to identify the market gap.
Each jurisdiction comes with its own opportunities and challenges based on the operating environment, political, legal, production and cultural nuances.
Three steps you should consider undertaking as part of this process are to understand:
- Size of the addressable market and who the key players are (both clients and competitors)
- Needs of your target client base and how your service / product can meet those needs
- Cultural or regulatory challenges that will impact your ability to gain traction and deliver your services to market
Nail down your international business plan and sales strategy
Now that you understand the market, it’s time to create a targeted plan. This will need to address what support mechanisms are required, segmenting your target client base and targeting those that will give you both speed and credibility. Be prepared to flex on your typical sales approach as each market and client has its own approach to buying your services.
Define your short, medium and long-term strategy and set attainable goals to measure your progress and success. It’s also important that your business development team has a clear focus on setting up footholds in the respective jurisdictions they look after.
Forming strategic partnerships with local players
Establishing strategic partnerships with local players – be it with a credible institution, a community group or an industry association – can provide your company with the market insights that will be critical as you make your foray into a new market. Partnerships also enable you to leverage the other party’s professional networks to expand your presence in that jurisdiction.
Set up a Local Advisory Board
Having on the ground expertise is vital to gaining traction in any new markets. Recruit senior advisors who have deep and strategic and operational understanding of – and extensive relationship in – your respective market. Having these advisors on your board helps you better understand the nuances of each market that will not appear in your research and help guide your company to success through their advice and powerful networks.
Expansion and growth in ANY country is a truly long-term commitment and needs to be planned for in this manner. It is extremely doable but needs to be approached very strategically in order to be successful.
