Earlier this year, we opened our first office in Melbourne, our eleventh office globally. As a global company, we are no stranger to driving expansion into new markets.
However, assuming a formula will succeed every time is probably the first mistake one can make. Expansion is fun and exciting, but it also requires a lot of groundwork before seeing results. Here are some considerations business leaders will find useful when planning to expand.
Define the business case
If the business has a steady income flow and a stable, talented workforce, but the current market is saturated or has ceased growing, then moving into a new market could be a good idea.
There are many reasons that the business might look to expand. Establishing the business case for expansion is an important initial step. Once a strong business case is established, look within to confirm the availability of resources to support it.
Not knowing the business’ limitations, could result in committing to unrealistic objectives, maybe even failure. Get a clear understanding of the company’s financial commitment, the capabilities and knowledge of the people overseeing the expansion and the expected timelines.
There’s no point committing to expansion into a new market, without adequate resources to sustain it in the short- or even long-term.
Understand the market
Determining which market to enter, its similarities and differences to existing market(s), and identifying the changes to be made to the market entry strategy is vital to success. Attaining a realistic view of the market opportunity begins with research. Who are the competitors? What is the target market? What are the demographics and cultural differences? How do they prefer to interact with businesses like yours?
For example, while often considered to be very similar, the expectations that Australians and Americans have around customer service and the way they communicate opinions are quite different. It’s also necessary to consider the differing legal requirements.
Plan the launch
There are many ways to consider entering a new market. Draft a strategy best suited to the business. Will it be preferable from a resourcing perspective to partner with another company? Or is it better to go solo to preserve brand image and independence?
These types of decisions are also informed by the goals set regarding competitors: Are you going to dislodge some existing players, or contribute to their growth? The launch strategy must be informed by goals set specifically for that market.
Localise the offering
Getting down to basics is an important part of driving successful expansion. This involves building relationships with the right people to help give the business a local understanding of the market, firming up realistic time frames for activities, and getting the communications strategy, supply chain and operations in order.
Some aspects of the product or service offering may need to be altered, even if it’s a minimal change, to ensure that the offering is attractive and workable in the new market.
Through our experience, success in leading expansion comes from genuinely following and empathising with the market. Adapt for the market, it doesn’t work the other way around.