To continue the growth of your business you can create a new product/service, increase your market penetration, or enter a new market. Entering a new international market gives your company access to new customers, which can positively increase company revenue. To compliantly sell your product or service in a new international market, you will need to put together an international strategy. For a successful international expansion, keep these eight steps in mind when crafting your strategy.
1. Set Goals for Your International Strategy
Before you do anything, take the time to understand what you want to get out of your international strategy. Every business wants to gain more customers, but your goals should be more specific than that. What are your sales goals for year one, year five, and beyond? What kind of customer retention can you realistically expect? How much time and money do you expect to spend on the expansion? How long will it take to see a return on investment?
Make sure your goals align with your product/service and your industry. Set realistic targets, so you can use these goals as a benchmark for your progress.
2. Identify Your Product/ Service
While this might seem obvious, you need to know what you’re going to sell in the new market. If your company only has one product or service, this step will be easy. If you have numerous offerings, decide which ones you will begin your expansion with.
3. Research New Markets
With your goals in hand, look for international markets where you can meet or exceed those goals. Cast your net wide by looking at several markets. Many governments and trade associations offer resources to help you understand foreign markets. Read through their reports to see how your product/service will resonate with the local consumer base.
While you will need to have someone pour over reports and statistics, you can’t truly understand a foreign market remotely. Attend trade shows in your target markets to make new contacts and learn about the local business culture. You can learn a lot about how to market your product/service offerings by experiencing the local life and culture.
Market research should also include the local regulatory environment. Every market has its own set of legal requirements to protect workers and consumers.
4. Understand Your Competition
To do well in any market, you need to understand the local competition and how they approach the market. Each market has its own mix of competitors and cultures that define how an industry works.
5. Plan Your Marketing Strategy
Even before you choose a target market, think about your overall marketing strategy. Do you want to have a different advertising message in each market you enter? Do you want to maintain a global brand? Or do you want a consistent, global brand that is slightly tailored for each marketplace? Choose whichever strategy will most clearly communicate your competitive advantage to new markets.
6. Plan Your International Organizational Structure
Entering one or more international markets will affect your organizational structure. A proactive plan will keep your staff focused on their individual responsibilities and promote efficient work. Consider how you will staff for each new market and how teams from different markets will communicate to share ideas.
7. Determine Your Distribution Strategy
There are many ways to get your offerings to a new market. The U.S. Department of Commerce website lists several channels:
- Direct to end-user
- Distributors in-country
- Your e-commerce website
- A third-party e-commerce platform
- Supplier to a large U.S. company with international sale
- Franchise your business.
Determine which channel best fits your business before entering the new market. Each one comes with its own set of advantages and disadvantages.
8. Assemble a Strategy Document
According to U.S. Department of Commerce, only one-third of small and medium-sized businesses develop a written international strategy before moving into international markets. A written plan keeps your team aligned and can guide your organization as it begins an international expansion.
Carl Gravel, Director of International Expansion at Business Development Bank of Canada, says “Once you have a plan, it is easier to follow the action items and not be overwhelmed.” A plan can keep your company focused on the right goals and strategies rather than simply reacting to the market.
Expanding operations into an international market can be challenging, but it opens the door to many new and exciting opportunities. To help your company achieve healthy international growth, utilize Velocity Global’s International PEO (Professional Employer Organization) solution. Get in touch with our team today to learn the benefits of our International PEO solution!