Planning & Preparing for International Expansion
This is the process that enables a company to identify the right strategy to match their ambition, against an identified (and relevant) opportunity, and allocate the right level of available resources (time, money and people) to achieve the objective.
It is a process that can take time – but diligence here, prior to actually entering the new market, typically increases success, reduces the risk, and focuses the investment made in the new market on the right critical activities such as developing sales.
The Importance of Planning
Creating a market entry plan ahead of entering the market will enable you to identify the potential size of the opportunity, how to best capture that opportunity, and the optimum business model for you that matches your available resources, and targets within the timeframe you have set yourself.
It also helps you avoid one of the biggest mistakes that expanding companies can make when they enter a new market which is assuming that you will be the same brand, with the same value proposition, selling in the same way, to the same customers as in your home country.
Your current business model, product, service, and brand, will very likely require some adaptation for the new market for a variety of reasons:
- You are not likely to have the same level of money to invest in the new market, nor the same amount of time it took to develop your business in your home market. Typically, you will also be under pressure to demonstrate a return in the short-term to your Board or shareholders, so your usual business model for achieving sales may not be applicable. For example, a JV or partnership with a local company may be an easier and quicker path to revenue for you than a solo operation in the first few years as they already have access to customers.
- Additionally, in the new market you will often be an unknown company, with an unknown brand, product or service. This means you will lack credibility, which always makes the first few sales much harder and take longer. This again may indicate a different business model if you need a return in the short-term, OR indicate you need to adjust your targets or level of investment to manage a tougher, longer sales process in the first few years.
- You are also unlikely to have no established network and will be operating in a new culture with different business practices and expectations with which you are not familiar. Sales practices, expectations, and the sales process will be different, so you cannot assume to sell in the same way as you do in your home market and achieve results.
- Your brand may need a different value proposition in the new market as the competition will be different, as will customer needs and pain points. Elements of your brand may need adapting too – for example colours, logos and names have different meanings and relevancy in different markets.
Understanding these factors ahead of entering a market, will enable you to create a clear plan that will mean your investment and time once here is spent on creating the new business, not wasted on learning along the way which detracts from sales, or correcting any mistakes.
What does Market Planning require?
- Understand the size, trends, levels of competition and any other factors that will affect your sector and ability to sell, such as legal, regulatory, social or political trends. This can be done remotely easily.
- Hold as many market validation discussions with in-market experts, suppliers, the trade, distributors, peers and potential customers as you can to help you understand and evaluate the market and opportunity for your product or service. Again, this can be undertaken largely remotely with the help of local governmental and commercial market entry support organisations.
- Pre-sales conversations will also help provide invaluable insights and guidance on what you need to do to compete effectively here, as well as critical factors that will affect the sales process.
- Consider the relevancy of your brand, product or service to suit the new market and customer needs, and how to be distinctive and competitive versus others. Customer research can help here, as well as the advice of local market branding experts. This will include consideration of:
- the market positioning
- target audience(s)
- value proposition
- key messages
- naming (company, brand, product/service descriptor)
- design of logo, packaging, collateral
- where you sell
- the type of supporting marketing activities and sales materials required
All of this invaluable information will provide the input required to help determine your market strategy and create your market plan
When to start planning?Planning and preparation work ideally should commence prior to market entry. This will help keep your new market investment costs as low possible as prior to earning revenues.
It will also enable you to focus on sales as soon as you are ready to enter the new market; and when you do start selling, to know to whom you are selling, at what price, what customer needs you are fulfilling, who your key competitors are, and with a brand presentation and sales pitch that is relevant and credible.
PreparationOnce you have your plan, then the preparation can start. Again, much of this can commence before you enter the market.
Preparation typically includes:
- the visa application process for anyone relocating from HQ
- company registration
- setting up a bank account / and local accountants
- identifying potential partners, distributors, suppliers, channels and target customers
- operational, legal, regulation, and HR requirements
- property/office identification
- any required adaption of the product or service and marketing mix
- developing the marketing and sales messaging and materials
- communications plans and campaigns – some of which may commence as soon as, or even before you start selling
Here, the support of in-market experts who can assist remotely is invaluable. They will be able to advise and assist you on the ground, providing the necessary knowledge, introductions, insights and on-the-ground support required helping fast track your preparation and time into market and to sales.
In ConclusionUnderstanding the situation, conditions and needs of a new geographical market, and planning and preparing in advance for your market entry, typically helps maximise your chances of success, whilst keeping your risks and costs of investments as low as possible.
The market entry plan enables you to understand your opportunity, match and focus your resources, and clearly set out the steps required to realise sales and incomes for the new market, enabling you to create a clear strategy and plan of action prior to arriving in market.
London and Partners and their network of approved partners are best placed to help you with this planning and preparation, thoroughly understanding the needs of companies from around the world expanding to the UK.
Their local knowledge, insights and connections can provide invaluable support to help realise your new market ambitions.
Gillian Kerr, CMO, Trade Horizons