Business Expansion – How To Expand Your Business Into New Markets?
Expanding your business into new markets is a natural progression to grow the company. Business expansion requires adequate capital, thorough market research, and the appropriate entry method to establish a core foundation in the new market.
Business ambitions aside, the definitive signs that your company is reading for expansion are
- The company has a steady stream of customers or clients.
- The company has a steady cash flow.
- The company has been steadily achieving or surpassing its business goals.
- The company has the right set of employees.
To ensure success in new markets, it’s important to plan and implement a growth strategy. A growth strategy will help you anticipate competition and stay ahead of the learning curve. For any company to become a global brand, it must have strong local knowledge of the markets it is entering, and a commitment to adapt marketing and business strategies to cater to the local consumers. A systematic approach is the best way to find suitable markets as it prevents waste of precious resources and reduces chances of failure.
There are two ways in which a business can enter a new market:
- A business has a new idea and wants to sell new products or services to the new market.
- A business wants to sell its existing products or services into the new market.
Consumer brands like Zara and Apple have successfully infiltrated new markets with clear growth strategies and a team to perfectly execute them dedicatedly. The international expansion of streaming platform Netflix has been monumental. Netflix has adapted its strategy to meet the prerequisite of the new markets and regional consumers. The success of Netflix’s global expansion has been its commitment and focus on the desires of the local customers by providing content in regional languages, thereby increasing trust and loyalty among its customers. Such success stories don’t happen overnight. It requires years of strategic planning and commitment to achieve international success.
Here is our comprehensive guide to how to expand your business into new markets:
Set clear goals
For an undertaking of such massive scale, goals and objectives must be clearly set from the get-go. There must be definitive guidelines as to how and when to penetrate new markets. You need to be clear on what you are trying to achieve with your expansion as it will set the tone of the overall business goals. It will also impact the development and marketing of your products and services. The goals must take into account the peculiarities of the new market and its consumers. A comprehensive business plan will ensure that you are on-track and validate whether or not you are achieving your goals.
Select your target market
Selecting the right target market that you feel are most likely to want to buy your products and services is crucial. Begin your business expansion by analysing the demographic and geographic attributes of the new market. Recognize the challenges and desires of the new demographic. Your product development and marketing strategy will depend heavily on the characteristics of your new target audience. Entry into new markets will vary from country to country, even region to region. So the target market research and selection must focus on the economic climate of the country, identification of regions with the highest demand for your product or service, local competition, and local supply chains and partners.
Choose a suitable partner
Partnering with a local marketing agency or market research company can help you navigate the new market with their expertise and knowledge. The right market partner can help mitigate the risks and tackle roadblocks effectively. To build a long-term partnership, you will have to dedicate time and effort to build trust and understanding. A solid contract must be drawn up to ensure that there is no room for misunderstanding.
Conduct thorough market research
The importance of market research cannot be emphasised enough. It is crucial to systematically gather and analyse insights into data such as target market analysis, competitor analysis, online demand, customer behaviour, current market trends, and disruptive innovation. These insights can help businesses to determine if there is sufficient demand for their product and service, if there is enough profitability, the optimal promotional strategy, estimated market share in comparison to competitors, and strategies to accommodate changing market dynamics.
Decide to enter the market or look for another target market
After analysing the data insights into the market research, you must decide if it’s beneficial for the company to enter this market. It is important to analyse and identify market deficits that your company and its products can fulfil. If there is enough scope for growth in the new market, only then you must decide to expand into it or else find another target market.
Create and define buyer persona
Once the target market is selected, the next step is to establish buyer personas for the new customer base. The buyer persona must reflect the unique characteristics of your target audience. Every aspect of your product or service, marketing campaign, and branding strategy must enable you to relate to your customers. The language, tone of voice, and mode of communication must be carefully crafted, such that it aids you to connect authentically with your audience. To successfully convert prospects into customers, you must focus on building a comprehensive customer experience strategy that helps the company to build trust in customers.
Anticipate future challenges
Successful businesses always anticipate and prepare for the future. Understanding the challenges and disadvantages of your target market will help you prepare your business and build resilience. You might find higher competition in some countries than others. To build a recognisable brand, you must constantly evaluate your strategy and your competitors. Build a dynamic and flexible structure because market trends are always evolving and to stay ahead of the curve and disruption, you must always be adaptable.
Business expansion can be risky, and it requires time and commitment. There must be serious consideration of language, local competition, and local market trends when entering into new markets. At Alkye, we offer our clients Growth Plan and Market Research services to help them break into new markets and invest resources in the right people and places.