Expanding into an overseas market
Expanding into an overseas market is often the next logical stage of growth once operations in your domestic market have reached maturity. Selling abroad can lead to successful, sustainable, long-term growth and new sources of revenue, but what is the best way to approach expansion? How can you minimise the risks and maximise the chances of success?
Assess your situation
Before you can determine if your products or services are a fit for the global marketplace, you should have a clear picture of where your company is today and where it will be in the future. Also consider whether your business is stable on a day to day basis prior to expanding. Will the business be ok if you divert a degree of attention to the new market? Will the key selling points that made you successful in your domestic market translate in foreign markets? Do you have enough funds to expand? Will expanding meet your corporate objectives or make you less likely to achieve them? Having a clear understanding of your current situation will help you to decide whether your business is ready to expand internationally.
Expanding into any new market requires research; you need to gain an insight into how the market operates and what the market wants. For example, is there a demand for your product? Which consumer group are you going to target? Undertaking comprehensive market research will consequently reduce the risks and give you the chance to exploit any new opportunities that you may come across. Researching an overseas market is a greater challenge than the domestic market since you could lack the resources and knowledge. You can of course purchase market data for the country you’re choosing to expand into but first-hand knowledge will always give a clearer picture so it’s a good idea to speak to people who are already familiar with your new market.
Methods of entering the market
You’ll need an idea of how you will actually sell overseas and get the right processes in place with a distributor, agent or online. Think about how you are going to enter the market, whether through exporting, importing, off-shore production, licensing or a joint venture with another business. Each method of entry, of course, has its own advantages and disadvantages so it is important to choose an appropriate entry method that suits your business model and objectives.
Develop a business plan
Review your current business plan as this may need adapting to adjust to the new market, or may need changing entirely. Points to consider include: potential market/customers, the external environment including political, economic, social and legislative factors, the business model and the costs etc.
There are a huge number of factors to consider when moving into an international market and the above is intended to give you a brief overview. If you are unsure about any aspect of your move, it’s always best to seek advice from a professional body. The key thing to remember is to pre-plan and research as much as you can.