By: Andy Latkovskis, HR Officer, New Horizons Global Partners
In the current highly competitive business environment, thinking of a global expansion is the way to go for most entrepreneurs. This is because it opens up new opportunities for revenue growth that would otherwise be impossible in the home market. Expanding globally is also beneficial for opening up the global talent pool and gaining a competitive edge. However, expanding to new markets can be daunting considering the risks, obstacles to entry and the costs involved. Any business that wants to expand successfully and profitably across the globe must do so strategically. That is why we are exploring a few strategies below that you can consider for your global expansion to raise the odds of success.
Do your due diligence
Foreign markets are bound to have significant differences from your local market. Think about cultural and language differences, legal and tax regulations, political and economic landscapes and technologies available and the like. Going blindly into new markets can be fatal and a waste of resources. Starting with thorough market research gives you invaluable insights about the market opportunities, risks, challenges and obstacles, which is vital in resource planning. This also helps in developing action plans to mitigate risks, overcome barriers and respond quickly to anticipated market changes. The advantage of this is that it allows you to be proactive rather than reactive in mitigating risks and overcoming obstacles in unfamiliar markets.
Partner with the right people
As said above, new markets are likely to differ greatly from what you are familiar with in your home market. If you are not careful, it can be easy to make mistakes that can be costly down the road. Navigating foreign markets successfully calls for reliable partners who have an understanding of the market. Ask yourself which areas could benefit from having local partners. For instance, working with a PEO in foreign employee hiring can ensure that you find the best talents and that you hire them in compliance with the local labor laws. Likewise, a local legal expert can be invaluable in helping you understand the legal requirements of the market, while a marketing agency and human translation services can help you market your products successfully keeping in mind the cultural and social differences.
Adapt a lean approach
The risk of failure is very high in unfamiliar markets. You might have a market for your products, but lack the right strategy to capture the market, or, your products might not have a market at all. The lean market approach helps minimize the risk of failure and incurring losses during global expansion by avoiding huge amounts of initial funding. For instance, rather than fully adopting the product to the market and risking failure if there is no market demand, a lean approach promotes testing the products and making gradual adjustments as you learn about the market. Additionally, you can avoid making major investments in infrastructure and personnel until you are sure about the market. In this case, think of outsourcing some functions rather than hiring an in-house team or working from a shared office space rather than committing to long-term leases among other alternatives.
Develop a products strategy
While your products might be doing well in your local market, it is important to keep in mind that it is not necessarily so for foreign markets. Before expanding to new markets, it is vital to ensure that your products have a chance in the target markets. Moreover, develop a product strategy that clearly tells how your products will sell in the new markets. Is there a need to adopt the products to the local market, or not?
In addition, don’t enter into new markets with an attitude of ‘me-too’ products especially when venturing into mature markets. You risk losing to local competition with such an approach, considering that the customers already have an established relationship with the local brands. Instead, seek to understand your market differentiator or unique selling proposition and capitalize on it.
Expanding globally poses some significant benefits for business owners. From finding new revenue streams, gaining access to a global talent pool to increased return on investment. However, the journey is without risks, challenges and barriers. The only way to bypass these is to take a strategic approach. There are several strategies that you can apply including doing your due diligence, adopting a lean model, having a solid product strategy and contracting reliable partners.
Author Bio: Andy Latkovskis is an HR Officer specializing in employee training and development. He is truly passionate about nurturing talent and ideas that evoke transformative change in individuals, teams, and organizations. Andy is always seeking opportunities to help others with his expertise, be it by his profession or simply sharing his experiences and advice online.