When a company enters a new market, it gains access to new customers and revenue streams. However, it also has to contend with a new set of competitors. In most circumstances, local businesses have a better understanding of the market when compared to those that do not already have a presence in that market. Companies that hope to stay ahead of their international competition during global expansion need to understand the nuances of the local business environment and apply those learnings to their new global operation. When going global, every company needs to find a way to get ahead of the competition.
Find Competitive Advantage Over International Competition
Kimberly Amadeo defines competitive advantage by saying, “A competitive advantage is what makes you better than the competition in your customers’ minds.” This means bringing more value to the customer by offering better products or services and emphasizing that value with messaging adjusted to resonate with the local population. To gain a competitive advantage, a business leader needs to know how to effectively position its company and tailor its product or services to fit the needs of consumers in new global markets.
When entering new foreign countries, companies need to identify the specific benefits their product or service can bring to consumers in the market. Does the company specialize in customer service, lead with innovation, or have the lowest price? Is there a gap in current product or service offerings that the company’s offerings could fill? All of these factors play into the overall value of a company and how it will be perceived in new foreign markets.
To capitalize on its competitive advantage, a company has to understand both the culture in the new market as well as the expectations of the potential customers. It is important for companies to create detailed profiles of their target market, so they can understand how local consumers will use their products and services to solve problems, create opportunities, and improve their lives. This means diving in to learn about the culture, laws, expectations, and desires of the people within a market. This can be done by sending a team into the market to do on-the-ground research in order to ensure a company is delivering the most value to its audience.
In addition, if a company wants to succeed in global markets, it’s important for it to understand the strengths and weaknesses of the international competition. How do they differentiate themselves in the market? What gaps are there in that particular market that another company could fill? Learning the competitive landscape can help companies determine the right way to make an entrance into the local market.
Communicate Competitive Advantage to the Local Market
A competitive advantage only works when the customer knows what makes a product better. It won’t help for a company to excel in every way if no one is aware of it. Brand messaging is just as important as having a great product or service offering in foreign markets. Savvy business leaders should focus on finding ways to communicate their value in local markets in order to see success.
Red Bull, for example, combines a global brand message with locally-focused marketing efforts. While their message remains consistent throughout the world, they advertise in local ways. To do this, Red Bull has globally linked its brand with extreme sports, music, and art, but stays local by hosting events in major cities around the world. Events like this make their global message feel local, and it ties their product to fun events in which locals participate. Companies can learn from this practice in order to help them build a global brand with a local approach.
Other companies change up elements of their brand strategy when they enter a new market, even giving the same product a new name and a new logo in order to resonate better with the local audience. PepsiCo, for instance, sells Lays brand potato chips around the world but changes the name in certain markets. In Brazil, they are marketed as “Chipsy,” while the brand is known as “Smiths” in Australia. In each country, the colors and general shape of the logo stay more or less the same, in order to keep the overall global brand consistent. But why change messaging in each country? Each new version of the Lays brand builds on local cultural expectations and marketing needs in order to effectively communicate with the consumers in each market in a way that resonates with their cultural expectations.
These are just two examples of how companies change their brand messaging in foreign markets to more effectively position themselves to different audiences. Each of the above examples represents two poles: One implements a global strategy through local means, and the other creates a unique strategy for different markets. Both methods target locals in ways that make their product feel local and gives the brand a competitive edge.
Enter New Markets with a Flexible Approach
Companies that want to stay ahead of their global competition can also benefit from an agile approach to global expansion. Lean global expansion methods, like a global Employer of Record solution, help companies enter markets quickly, improving their speed to market so they can get a jump on their competition immediately. A flexible approach not only enables companies to enter markets quickly but also allows them to efficiently exit a market if they do not see the success they expected. Working alongside global experts that have experience navigating global markets can help a company know what to expect in new foreign markets. Gaining insider access to the cultural norms, compliance requirements, and labor environment give a company a clear competitive advantage from the moment it enters a new country.
Get in touch with our team to learn more about gaining a competitive edge in global markets. See how our Employer of Record solution helps you maintain an agile approach in order to stay ahead of the competition overseas. Reach out today!