Establishing a presence in any market is one of the most challenging tasks and is often underestimated.
Successfully selling in your home country does not guarantee the same results in international markets.
A well-defined go-to-market strategy ensures that opportunities are clearly identified while also highlighting potential pitfalls to avoid.
Building a Go-to-Market strategy, will always start with the question “Why?”.
Whenever I begin analyzing the optimal route-to-market, it is essential to first understand the underlying rationale for entering a new market.
For entering a new market, there are several compelling reasons to develop a strategy:
- Belief in Portfolio Potential: A strong conviction that the current product portfolio can successfully meet demand in other markets.
- Stagnation in Current Market: Growth has plateaued in the existing market, necessitating exploration of new opportunities.
- New Investment: Recent investment has been secured to expand market presence and capitalize on growth opportunities.
- Avoiding Decline: Maintaining the status quo will likely lead to a decline, making it essential to seek new markets for sustained growth.
There is no wrong reason for entering a new market;
however, understanding the “why” is crucial as it significantly influences the “how” of the strategy.
The “how” of entering a new market comes with its own set of complexities, and there is no one-size-fits-all approach due to the unique reasons behind each market entry.
This underscores the importance of starting with a thorough analysis of the current sales strategy and its underlying rationale when creating a Go-to-Market Strategy.
In some cases, the existing sales strategy may serve as an excellent blueprint for new markets, requiring only minor adjustments. However, more often, the current sales strategy may be the primary reason for potential future failure.
Understanding and adapting to these nuances is crucial for the success of any market entry strategy.
Key Considerations for Building a Go-to-Market Strategy
As previously mentioned, understanding the “why” provides direction for the “how.” Here are some critical considerations to guide the development of your strategy:
- Where: Determine whether the focus is on geographical expansion or entering a new market vertical. This decision will influence market research, resource allocation, and potential partnerships.
- What: Assess whether the strategy will apply to the entire product portfolio or if there are specific constraints for different markets. Understanding these limitations is crucial for setting realistic goals and expectations.
- When: Evaluate the urgency of the market entry. If there is a pressing need or a current window of opportunity, a swift approach may be necessary. Conversely, a more gradual approach can be taken if the timing is flexible.
- How Much: Consider the available investment funds. Decide whether growth will be driven by significant financial investment or through organic growth, utilizing existing resources and capabilities.
- Capability: Ensure that the organization comprehends the strategy and can provide the necessary support. This includes having the right skills, resources, and commitment from all levels of the company.
During the development of the initial Route-to-Market strategy, these considerations will continually serve as a reference point for decision-making. They help ensure that the strategy remains aligned with the organization’s goals and market realities.
By keeping these factors in mind, you can create a robust and adaptable strategy that addresses the complexities and opportunities of expanding into new markets.
Strategies to Consider
From a sales and marketing perspective, there are three primary B2B strategies for entering new markets. These strategies are not mutually exclusive and can often be combined for maximum effectiveness:
Direct
Involves selling directly to the customer, typically through a dedicated sales force. This approach allows for greater control over the sales process, closer customer relationships, and more direct feedback from the market.
Indirect
Utilizes intermediaries rather than directly to the end customer. These intermediaries can include distributors, resellers, agents, and retailers. This approach allows companies to leverage the reach and expertise of third parties to penetrate new markets, scale operations, and increase sales without a direct sales force..
OEM
As Original Equipment Manufacturer (OEM) the company is selling its products to another company (the partner) that then integrates these products into its own branded products or solutions. The partner then sells the final product to end customers under its brand name.
A well-rounded route-to-market strategy may blend these approaches to optimize market entry and growth.