International Expansion: The one step you are probably not thinking of
Words provided by expansion.eco
International Expansion is an interesting challenge. Did you know that 80% of the market entries fail?
Obviously, there are many ways to expand your business into new markets. The possibilities range from direct exporting, partnering up with local partners and distributors to setting up a subsidiary in the country you want to expand into. In order to decide what the best strategy for your business is, you research the market and develop a strategy based on your findings.
But did you ever think about validating your strategy?
Before you start executing the strategy you devised based on your knowledge of the market - and commit a fair amount of budget and time - think about conducting an expansion pilot first in order to validate your strategy.
The Expansion Pilot is a low risk approach to validating your strategy
An expansion pilot is a clearly framed project dedicated to validate your strategy and remove assumptions. Ultimately, a strategy proposal is merely hypothetical and needs substantial, actionable market insights to be well-founded.
Did you already try the following?
● Spend time in the market and talk to people for in-depth qualitative insights
● Speak with potential partners and other 3rd party partners who are experts in your industry
● Identify channels and how they should be used, many of which are not “common knowledge”
● Identify more blind spots such as places, channels, networks and platforms that are not to be found online
● Go the extra mile to find answers to otherwise too specific questions
The last point is actually a highly undervalued thing to do. Only if you are willing to go the extra mile you will find answers to questions you didn’t even think of in the first place.
And going the extra mile does not even have to be a big deal. One example: events and meetups are on the rise and a great opportunity to promote your products and services. Being there on the ground is the only way to find out what exactly happens there, which people attend, what the atmosphere is like and what they talk about.
More often than not, participating actively in an event will bring you in touch with other people. They share not only valuable insights but more importantly, network information. With network information, you don’t know what to expect until you are given a piece of information and then it clicks “Oh yes, that’s right, I might try that!”. The best information often come unexpectedly.
The product-market fit is different for the target market
Ultimately, the expansion into a new market is an endeavour similar to launching a new product. It is tempting to assume that if you have already found the product-market-fit in your home country, it is automatically the case in the new market you are planning your expansion to (also, we strongly advise to not expand into a new market if you haven’t found perfect product-market fit but that is another topic). It is quite the contrary and rarely the case that the product-market fit is unchanged.
You product most likely will need fine tuning in at least one of the following fields:
● product design
● marketing material
● communication & message
● sales approach
Finding the right product-market-fit requires talking to people and getting in touch with the market, not just observing it.
In order to get there, framing an expansion pilot project is an important but often overlooked step. It gives you the chance to eradicate assumptions, increase share of actionable insights in your strategy, adjust the numbers in the business case and identify unforeseen hurdles as well as unique business opportunities.
All in all, validating your expansion strategy is a critical success factor, just like finding the the product-market fit.
If you want to know how market validation would look like for your business, get in touch with us:
+31 6 11 40 67 95
Or visit us at Stand No. 266