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A guide to expanding into international markets

For companies looking to increase their revenues and profits, the lure of lucrative new business opportunities abroad can seem very tempting. All too often however, organisations fail to realise that success in one market does not necessarily guarantee success in another. At best it can turn out to be a costly exercise that opens their "window of opportunity" to their competition, or worst case it can affect the viability and reputation of their entire business. So why does this happen and how can it be avoided?

One of the main reasons for failure is that many companies believe that there will be no problem in using the existing sales and marketing strategy and transferring it to a new territory. Whilst this may work for some global consumer brands, this ‘one size fits all’ approach rarely works for SME businesses that have little or no brand recognition in the new market.

Organisations can achieve a higher degree of success, however if they are prepared to adapt and adopt an international business development strategy that aligns their product or service to fit with the cultural, economic and marketing characteristics of each country.

Here are some Dos and Don’ts of achieving a winning strategy:

Do

  • Research your new market thoroughly and understand how the buyer’s behaviour model works e.g. is the product sold directly or through distribution 
  • Identify who are the major players and what competing products are they selling? Some sales partners may seduce you with attractive exclusivity offers only to then tie you up and keep you out of the market 
  • dentify the correct channel and partners that complement rather than compete with your service or products
  • Remember that although you may have a strong ‘top of mind’ awareness in your own market you may be completely unknown in the new one, so your sales partners will therefore need plenty of support to establish your brand. 
  • Devise the correct PR & marketing campaign to underwrite the market entry strategy – it’s better to use an agency on the ground rather than attempt to manage remotely 
  • Be prepared to be flexible on your pricing, discount and margin models 
  • Check what the local tax and VAT issues are – do you need to set up a legal entity? 

Don't

  • Be arrogant with your local sales partners – If you have chosen the correct partner – listen to them as they probably do know the best way to take your product to their market 
  • Assume that collateral can be written in English – Check what local translation is required for some documents e.g. manuals 
  • Automatically expect to use the same adverts or images for collateral that you use in your domestic market – cultural differences sometimes mean that phrasing or iconography can be interpreted in the wrong way 
  • Set expectation levels too high in the first year 
  • Be impatient - expect momentum to be slower and spend more money abroad than at home to gain that initial critical mass 

An international business venture can open up exciting new possibilities but it can also lead to high levels of costs and frustration. If a business is prepared to tailor its products and services to meet the demands of the new market then it has every chance of thriving.

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