Looking to expand your business into new markets geographically? We’ve got you covered! Here at Bec, one of our areas of expertise is supporting businesses to expand into new markets. We know that opening up to a new market is a great way to grow a business – after all it opens up access to new customers to buy your products or services. There are other reasons too why you may choose to enter a new market which we covered off in our recent ‘A Guide to UK Market Entry’ (you can find the link for this below).
We would however advise approaching new market entry with a word of warning. Yes entering a new market has probably never been easier but it is still far from easy. There is a lot that could go wrong. It is also common for an unprepared business to burn a lot of resources in entering as they begin to tackle many of the challenges associated with figuring out a new country – its rules, culture, ways of doing business and more. So what should you do?
Well, many of these challenges can be tackled at what we like to call the ‘pre-internationalisation’ stage. This is where you are beginning to plan and think about market entry but have not yet started to execute – you need to build a strategy that is backed by first doing your homework! This is where we come in, by providing you with 6 steps that we’d recommend to helping you do your homework which pulls together to give you your Market Entry Strategy.
Many of the tools/frameworks are things that you may have used in the early days but this is for a reason. Entering a new market can be compared to starting again. So why not use the tools you used when you start out!
1. Value Proposition
Let’s start at the basics – complete a value proposition canvas focus on the market of choice. Check out this workshop by our awesome mentor Bethan Miles on how to design your value proposition here.
2. Competitor Analysis
Next step, take a look at your competitors in the market & build a competitor analysis – remember focus on the market you are entering! Here is a great guide & tool to putting together a best-in-class competitor analysis here.
3. External Environment Analysis
We mentioned this earlier but getting an understanding of the external environment is another critical step. Its going to help you navigate and make informed decisions. Two great frameworks for doing this include the PESTLE analysis and also Porters 5 Forces. Give them a go to help you gain the understanding you need.
4. Partnership Strategy
There is a saying that goes “if you want to go fast, go alone; if you want to go far, go together” – there is nothing that could sum up the importance of partnerships in new market entry than this. Getting the right ones around the table is essential to help you succeed. Here is a good guide on what to consider when selecting partners.
5. Market Entry Method
By now you should have painted a good picture of the market, the forces at play and your offer within it. So now its time to consider the different methods for entering the market. Depending on your sector, level of resources and other factors there will be different approaches that suite better than others. Here are several of the methods you may look to consider:
Piggybacking: when a new company enters a market by partnering with an existing one, using its resources and reach to quickly establish itself.
Vendors: suppliers or sellers that new entrants can collaborate with to leverage their local presence and customer base for a smoother market entry.
Joint Venture: when two or more companies collaborate to form a new entity, combining resources and expertise to enter a market together.
Acquisition: when a company purchases another existing company in a target market as a way to enter and establish its presence.
Exporting: involves selling products or services from the home country to a foreign market, without physical presence there.
Full Foreign Direct Investment (FDI): when a company directly invests in establishing operations or acquiring assets in a foreign market to gain complete control.
6. Business Model Canvas
Now its time to pull everything you’ve learnt from steps 1-5 together into a single channel – your business model canvas for the new market. Once completed, you’ve got something ready to take into the market to begin to test the assumptions, learn and iterate – see we told you it was like being a startup again! Putting in this work now is going to put you in a position to decide if entering the market is right for you or not. We’ve seen taking this step save businesses a lot of time, effort and money rather than jumping straight into a market without doing their homework first.
Usually we would recommend the classic canvas which you can find here but have recently spotted the Business Model Localization Canvas within the Global Class Tool kit here which is designed specifically around new market entry.
Final Comments & More Support
By finding solid partners with experience of operating internationally, you are able to tackle common challenges and increase your chances of success. The right partner should be someone who has experience within the specific market you are looking to enter because again, each market has its own set of unique factors and challenges which these partners will have experience of overcoming. Finally, make use of support available whether through services offered by your own countries government or the country of entry. Many countries take a proactive approach in supporting international trade and can help fast track your journey.
You can check out our UK Market Entry Guide here which provides thoughts & insight into successfully entering the UK market.
Also, feel free to reach out the the team at email@example.com to discuss direct support for your business or organisation. Looking to run programmes of support for businesses looking to enter a new market? Also reach out as we can support you too!