Before expanding overseas, companies start testing international markets to find the perfect match for their business model or to see if their model needs localization. Avoid wasting time and money by properly preparing for your international expansion.
Do Your Research
Prior to international expansion, compare and contrast many markets. You’ll want to consider the following:
- Is there a supply of full-time employees?
- Would my business model work in this country? What would have to change?
- Is there a demand for my product or service?
- Can I save on imports/exports and manufacturing?
- How will I handle the language barrier?
- Are my competitors in this market? If yes, are they successful?
- Do I want to expand in this country?
- Is my executive team aligned on the strategy for this country?
Find a Culture Match Made in Heaven
Companies work extremely hard to build a solid culture. It may be the make or break factor to a company’s overall success because it determines turnover rates, employee loyalty, and employee engagement. If a company culture is strong, it leads to an increased bottom line.
Don’t risk all of your hard work building this environment by expanding into the wrong country. Travel to your target markets and dive into the local culture. Ensure that it’s the best match for your entire team and syncs well with your mission statement.
Find a Global Expansion Partner
A partner is absolutely necessary when considering an international expansion. Whether working with an entire team or an individual, you need to establish a relationship with a trusted resource in-country before diving into the new market. Your success for finding the right partner may determine the target market.
If you find a great fit in your desired country, use their resources to test your product or service overseas. This is a great way to build your relationship with an international partner and determine their scope of responsibility.
Study Your Competition
International expansion is a great way to gain a competitive edge in your particular market. If your competition is functioning in your target country, research their successes and failures. This may save you time and money.
If your competition is not doing well in your target market, discover the reasons behind their failures and determine if it’s worth diving into the new market. On the other hand, if your competitor is successful, you can consider testing that international market with a new approach to develop an edge.
Follow the Leaders
Another great way to determine the perfect test market is following the leaders. For example, Coca-Cola used Brussels as a consumer market test and found tremendous success. Brussels is an international city with multicultural workers and consumers. Nearly 30 percent of the city’s residents are foreign nationals and 1,300 foreign companies are based in Brussels. Testing international market cities with similar qualities is smart.
International expansion is exciting and if you’re getting ready to dive into test markets, you’ll need a partner to help with the legalities. Velocity Global’s FSaaS (Foreign Subsidiary as a Service) offering gets you prepared for global expansion in a matter of days. Let us know if you have any questions, we are always happy to help!