Entering a new market is a key concern for many business owners. Some of the largest and most successful organisations in the world, would not be in the enviable position they are in now, if they had not been brave enough to venture into new markets.
Below are the main factors manufacturing business owners and managers should consider before entering a new market.
Understanding potential markets is vital. Some business decision makers don’t carry out the proper market research, which is a huge mistake. A business that is successful in one country, may not be successful in another country. There are certain barriers such as language and customs that have to be understood. For example, businesses have to research localisation for UK exporters products and services so that they are compatible with local markets.
As well as this, local demographics and products that are popular in a particular country should be researched, to ensure that there is a demand for these products. Once the analysis phase is completed, you can then start to plan for your new expansion.
The phrase ‘if you fail to plan, you plan to fail’ is particularly appropriate when it comes to a business expanding into another country. A proper business plan should cover all aspects of the new part of a business and highlight any possible problems that could occur in the future.
The decision makers in a business have to put a financial plan in place, find an appropriate business location, decide what staff they require, organise materials, carry out marketing and much more. All of this business planning takes time, but the more comprehensive your plan is, the more chance your business has to succeed abroad.
Internal and external resources
Your business’ ability to adapt to this type of change has to be considered, before any final decision is made. Business owners and managers have to identify the key personnel which will be required to run any new venture outside the UK.
This may involve relocating existing staff or hiring appropriately qualified people abroad. Most businesses want such a move to run as smoothly as possible and to be handled by people who already understand how the organisation works. On the other hand, hiring local staff in your new business division demonstrates a business’ willingness to trust the people working in the host country and leverage their local knowledge.
Market entry options
Different organisations have different ways to enter a new market. Some relocate their own resources in the country they are entering. Others try to get a head start by partnering with or buying companies that are already established in that country. This decision usually depends on the resources a business has and how welcoming another country is to foreign businesses.
Deciding to enter a new market is not a decision you can take lightly. The factors above should be seriously considered first, so that a business has all the facts and knowledge required to make the process run as smoothly as possible.