Growing companies, particularly start-ups and scale-ups, often consider how they can expand their business to maintain their growth momentum. Before addressing the question of “how,” it’s essential to first explore the “why” behind global expansion.
There are several compelling reasons to develop a Go-to-Market strategy beyond your current market:
- Belief in Portfolio Potential: a strong conviction that current product portfolio can succesfully meet demand in other markets.
- Riding the Technology Momentum Wave: The technology is making headlines everywhere. Everyone involved in strategy is considering their next steps.
- Stagnation in Current Market: Growth has plateued in the existing market, necessittating exploration of new opportunities.
- New Investment: Recent investment has been secured to expand market presence and capatalize on growth opportunities.
- Avoiding Decline: Maintaining the status quo will likely lead to a decline, making is essential to seek new markets for sustained growth.
and many more….
In essence, there is generally no wrong reason to enter a new market. However, understanding the “why” will greatly inform the “how”. Combined with influencing elements such as “where,” “what,” “when,” and “how much.”
Contrary to what is stated above, the “why” will be explored in greater depth in the next month, once the “where” with the “how” have been defined.
After the “Why” comes the “How” of Global Expansion
Over the years, I’ve observed that companies often quickly choose what they perceive as the “obvious” markets for expansion. Nevertheless, this decision is frequently driven by factors like a common language or the sheer size of the market. While these factors are indeed important, they are far from the only ones to consider. By focusing solely on these aspects, companies risk overlooking numerous potential hurdles. Hence, that will inevitably arise once they are active in the market. Initial success may occur despite these challenges, but full-scale growth can be hindered, leading to frustration and even a potential withdrawal from the market.
Another pitfall is simply copying the current sales strategy used in your home market. While the strategy itself may be sound—having matured over time and adapted based on lessons learned—it is important to remember that each new market will require its own learning curve. This is especially true given the limited resources and lack of local customer examples that typically accompany market entry. Therefore, a similar process of adaptation and refinement must occur in each market to ensure success.
There are plenty of examples where companies enthusiastically entered a new market, giving it a try for one or two years, only to conclude by the third year that withdrawal was the only viable option. Unfortunately, such experiences can leave lasting scars on the company, often resulting in significant hesitation when considering future global expansion.
A painful market withdrawal can be avoided by taking the extra time to adopt a unique approach to assessing market potential.
Is there a way to avoid the obvious?
Taking a few extra weeks to gain a broader perspective on the potential of each market can provide valuable insights and fresh perspectives. Instead of opting for the obvious and battling challenges head-on, consider exploring those—sometimes smaller—opportunities where it may be easier to build the foundational knowledge of doing business in a different market, country, or territory.
In the coming weeks, I will introduce you to a concept that can help you draft a strategic direction for your globalization strategy, as well as identify areas where it might not make sense to focus initially.
This concept has been applied several times and provides a strong indication of short-term success. However, it is not the final Go-to-Market Strategy, which will be fine-tuned based on the specific markets chosen.
Stay tuned to learn more about a concept called CPA-CAGE-PMA.