They can be digital–you may begin selling online in foreign countries. Choosing the right channels is critical to the success of your market expansion. Demographics are the characteristics of a population such as size, growth, age, income, gender, marital status and buying habits. This information helps you decide whether this target market is large enough for your products or services in the target area. You need to consider language, local competition and recognizing that the customers aren’t already primed to want what your business offers, you need to tailor or even re-package it to suit their needs and expectations.
You may plan to invest in new product development as part of your market expansion strategy. This opens new revenue opportunities that can drive businesses to success. If executed poorly it can end in a costly disaster following a long, tedious process. Any business that experiences growth at home, looks further afield to expand their success. Expanding into global markets presents different challenges and approaches that work for one company may not work for another. Considering localization as a key factor for global growth is essential and businesses looking to grow need to dedicate time, energy and capital to truly knowing the areas they are hoping to expand into. Knowing you want to take your business into new markets around the globe is just the first step.
The genius of the campaign hinges on how they engaged them. Their altruistic challenge inspired normal people to spread compassion across the globe. moved into the energy storage business with the Tesla Powerwall.
You see, whether you are a consumer brand like Zara or more of a business-to-business brand like Mahindra, entering new markets is never easy. Because brands are formed in home markets where there are generally different underlying economic, demographic, cultural and regulatory factors. These factors are well understood by business leaders because they have literally grown up competing in these markets. The “rules of engagement” must be completely re-learned . If you execute your plan successfully, you’ll be looking at a base of new customers. Take a new product or service into your existing customer base. In any event, when you target new audiences, you would have to alter your messaging.
Ensure That Theres Alignment Between Your Current Business Model And The New One
Oscar Perez Marcote, managing director of Zara , makes calculated decisions on how to move forward with expansion based on extensive research and testing with the brand’s target audience. Since 1988, Zara has successfully entered new international markets with a clear strategy and a team aligned to execute with ruthless consistency.
When Zara had ambitions to expand into the emerging markets of India and China, it planned strategic, yet very different, entries into each market. Your market expansion strategy should include a marketing component. It should reflect both the channels through which you will engage with customers. It should also include the value proposition you plan to deliver to them. Begin by putting into writing the reasons you want to expand. Then, write down the reason you think you will succeed. In every case, a new market will not be like existing ones.
- But this is a slow process, as recruitment and selection processes take place.
- Revisit how you found success in your original market or markets.
- No matter what type of business you operate, growth includes a few key things.
- In discussing his business and its growth, the company’s owner laid out how he always knew and intended his Canadian-formed company to be a global brand.
- One is to use existing management and executive staff.
- Manage Your Customer Experience Manage your customer experience with tracking and returns.Grow Your Business Grow your business with powerful workflows and scalable features.
Going into a new market will put an even bigger strain on your resources. Of course, these figures don’t apply to the average business.
Steps To A Successful International Expansion
Walk through the streets of most capital cities around the world and you will find a Zara. Gaze through the street window and Zara’s success appears effortless. As Marcote and his team at Zara can attest, even when informed by extensive market research and armed with a clear strategy, new market entries are never a guaranteed success. Spanish retailer Zara is one of the world’s most successful clothing and accessory brands, and one whose track record of market expansion is enviable. Its flexible, innovative, high-speed business model has traveled from Spain to 77 markets around the world, including China.
Business Fundas is an educational initiative on business & management. Our authors are full time educators from top QS ranked universities and practitioners from multinational enterprises, who engage in blogging only as a hobby. We have articles on on strategy, marketing, supply chain, technology management, finance, insurance, social media, digitization and operations. Begin the research as soon as the location has been identified. Failure to understand a culture will result in marketing errors that can ruin a company’s reputation with the new audience.
Investing the appropriate level of resources in market analysis, selection, and entry method can create a foundation for success in the chosen market. We suggest following five steps to properly assess the opportunities and risks of a new market.
Any business which has a true commitment to global expansion and an outlook to match will invest in the right places and people to ensure this success. A global outlook from day one was essential for this brand. EU companies should look to other EU countries to expand into before looking to North America, for example, and vice versa. Most companies looking to expand into new markets want to boost their sales and have identified a market in which they can see the potential for growth. This can be a fine balance to achieve, as you need to ensure you keep current, loyal customers on side while impressing and persuading customers in the new region. Perform in-depth market research and market intelligence analysis for your brand, products and services specific to the new market to inform requirements for optimization and translation of your story. The local market needs to understand the brand story and core values of the brand.
Expansion Into New Markets As Health Systems Acquire
Companies investigating potential markets must take stock of their capabilities and assets. These may include new or existing products with an appeal in untapped areas.
Create buyer personas of people or businesses most likely to buy your products. Use demographics to determine how you can reach them.
Decide How Youll Position Yourself In This New Market
If you have complementary infrastructure or sales channels in place, you might want to consider an organic approach to growth. The key steps here are to develop the business plan, case for investment, and implementation work plan, including owners, timelines, tasks, and key milestones to enter. The challenge for individual businesses, however, is how to expand into any global market, become more competitive, and have as little impact on its current domestic business success as possible. Friedman’s analogy to a “flat world” is we have become a global society in which information, products, and services traverse the planet without the “roadblocks” of traditional travel.
The sheer number of pieces that need to be moved to scale a business is overbearing for many people. It’s a necessity to survive the ever-shifting world of business. Conduct frequent surveys to keep on top of your customer’s needs. Engage on social media and listen in on the conversations that are happening around your brand. While business is not all about chasing numbers, you need a measurable performance indicator.
Unfortunately, many companies fail in their attempts to enter and expand into new markets because they lack effective development of one of these critical building blocks and therefore must abort market entry plans. Too often this is because they do not have the right partners with the relevant skills and experience required to help guide them through the complexities of these new markets. The mistakes are common and the outcomes are predictable when brands try to aggressively grow beyond their home markets — or “grow elsewhere.” Mahindra made a big push to enter the U.S. market in 2006 to sell compact diesel pickups imported from India. However, its plan collapsed in 2010 amid the industry’s sales downturn.
international shipments, many independent businesses are apprehensive about aspects such as goods getting stuck in customs, or whether of not their customers are legitimate buyers. Exports have been a growing source of revenue for independent businesses for a few years now, rising, as mentioned, by 20% since 2016. Access to more markets means more money through more consumer channels. The overall process of expanding your business into a new market. Not every business can start with a commitment to expand around the globe, but those that do, often see their success fast-tracked.
In a market penetration strategy, the firm uses its products in the existing market. In other words, a firm is aiming to increase its market share with a market penetration strategy. Spotify already has a solid foothold around the world, but it’s gearing up to grow even bigger. Over the coming days, the company confirmed plans to launch the platform in 85 new markets as part of a push to bring the service to “more than a billion” new users. And to ensure usability in all of these new markets, Spotify also officially added support for 36 new languages to its platform. These moves represent Spotify’s broadest market expansion to date.