There are plenty of excellent reasons to expand your business internationally. You multiply your consumer base, increase your industry stronghold, take advantage of local talent and resources, and diversify revenue streams so you aren’t dependent on the health of a single market. For many, it’s the next logical step in scaling their business.
However, for all its benefits, expansion comes with hurdles: retooling your offerings to align with cultural preferences and regulations; managing personnel, HR and legal compliance for a foreign workforce; striking strategic partnerships in an unfamiliar market; and standing out among well-entrenched competition.
Here’s a starting point for businesses aiming to expand their horizons.
Conduct New Market Research
As the old saying goes, “An ounce of preparation is worth a pound of cure.” In business terms, we can tweak this maxim: “The more research you pour into an expansion venture, the less likely it will be to fail.” In the preliminary stages of considering expansion, conduct research into several markets to determine the best fits. Specifically, research:
- Your competition in a given market
- The market size
- Potential barriers, like regulations, low product differentiation, difficult access to distribution channels, etc.
- Potential local partners, clients, distributors, etc.
- Target consumer profiles, and more.
If you’re curious to read more, this Investopedia article offers a handy yet straightforward exploration of market research.
Craft a Market Entry Strategy
Once you’ve conducted thorough research, your organization can craft its “plan of attack” – the market entry strategy.
A market entry strategy is a comprehensive plan detailing how a business will enter and establish itself in a new market. It allows the company to assess potential risks, pinpoint opportunities, efficiently allocate resources, and build a path toward success. Here are a few strategy points to consider:
- Market selection: Choose target markets based on the thorough research you completed above, and strategic alignment with your greater business objectives.
- Entry mode selection: Determine the most suitable entry mode, such as exporting, licensing, franchising, joint ventures, or establishing a subsidiary.
- Marketing and positioning: Develop a comprehensive marketing strategy tailored to the target market’s preferences, cultural nuances, and competitive landscape.
- Distribution channel strategy: Identify optimal distribution channels to reach target consumers efficiently and cost-effectively.
- HR, compliance and risk management: Implement strategies to mitigate risks associated with hiring a local workforce by partnering with a global Employer of Record (more on this below).
Manage an International Team with a Global Employer of Record
That last point in the market entry strategy is a critical one. Expanding into new countries involves hiring local employees, which opens a business up to sizeable legal risks. Therefore, a key step in reaching new markets is to partner with an Employer of Record (EOR).
Quality peo vs eor providers, like the kind you find at Borderless AI take the risk off your shoulders. They onboard new employees, manage payroll, ensure compliance with local laws and regulations, and much more. They are a turnkey expansion solution that every market entry strategy should capitalize on.
Hopefully, this intro guide to new market expansion gives you the tools you need to start the process. Rally your organization around the plan, conduct more research than you think is necessary, develop solid strategies for establishment, and utilize an EOR platform for maximum success.
