Companies are expanding into new geographic markets to achieve growth now more than ever.
For a business that wants to grow and achieve substantial scale, globalization has made conducting business on an international basis a necessity.
The need to reach beyond a company’s traditional markets into the global marketplace is an essential activity for growth.
Besides looking at revenue growth, sometimes operations need to be located overseas to realize the necessary cost advantages to be successful at home. It really is no longer a choice.
This is a process containing risk. While any new market entry carries the risk of not meeting expectations, a well-designed program can help increase the chances of success. This is clearly a situation of “the devil is in the details”.
The basic question is make or buy. Build from scratch at the beginning (so-called “Green Field”) or buy an existing business/operation (M&A). Or maybe just set up a small operation, an outpost, see how it goes, and make the big entry decision later after gaining some experience.
At its core, a well-thought-out new geographic market entry program should be designed to lower or eliminate the barriers that deter companies from successfully establishing and developing their business in new geographic markets.
Global opportunities create additional challenges for the business – both in the new market and at home. Entering a new market is a complicated process and requires a clear understanding of local culture, behavior, language, and, perhaps, unfamiliar business regulations and practices. Implementing a successful market entry strategy requires not just a realistic plan but excellent execution.
How to achieve this? My opinion is to utilize a team that has expertise in multiple geographic locations, numerous industries, extensive operating experience and quantitative-driven approach. That set of skills can make the challenge of a new market entry more manageable and increase the likelihood of success.
Your team should not only help define the most appropriate market entry strategy for your product and business but also know how to implement that strategy. This implementation can include executing and integrating an acquisition, arranging a joint venture, establishing an operations/manufacturing center, or just opening a sales office. Do the people already in your business have the ability to assess the advantages and disadvantages of these options?
This can be a manual-intensive project, with skills that may not be residing inside your company with your regular employees. An outside consulting team may be the right answer. If you decide on an outside team, it should be able to not only answer the question of how to grow the business. The team should be able to continue the relationship into the implementation phase. This allows your team to focus on the areas of your business that you know best, while we help construct and implement a plan that will mobilize our company with efficiency and effectiveness.
I will discuss more about Strategic Market Entry issues in the next few posts.
