For many businesses, entering new markets is not an option. It is a market imperative for continued survival in our ultra-competitive world today. Unfortunately, establishing a foothold and thriving in new markets is easier said than done. Besides all of the increased risk we face when we do so, there are also some tough competitive realities we have to come to grips with.
The following 25+1 principles outline some of the many concerns and some of the ways to address them.
If you aren’t going to be committed to the new market and the mission of making it work, don’t even try. Local competitors can smell an uncommitted foreign entrant. When they do, they’ll bleed you out of the market by making competition unbearable until you fold and go home. They’ve already figured out it won’t take long to make you pack your bags.
And So It Begins
1. Know your target market
This is a no brainer. Having said that, it is very important to be explicit about what we do and do not know about a target market. What do we need to know (that we still don’t know) to ensure we will be successful there? What do we know about where our risk lies there?
2. Identify problems in the target market your company will solve
Even if there are already similar competitors there, no one is exactly like you and therefore, no two companies should ever be aiming at exactly the same set of problems to solve. There will be some service or product points that are unique. This becomes a positioning issue. What space in the minds of your target market’s consumers will you occupy?
3. Organize to minimize risk and maximize power
Don't commit to a strategy that has not been thought out and understood, given items 1 and 2. By focusing strongly on a specific niche organize your new entity to have maximum impact on the target market without betting the bank.
4. Be sure your ecosystem will exist and be right
Why do some companies fail with a product, and the very next year a similar idea comes along and succeeds? The time wasn't right. What makes the time right? Sometimes, existence of the full ecosystem - technological support, demand, customer attitudes (discontent with existing solutions) regulatory, full market support, is the difference. Does the ecosystem necessary for you to win exist in place?
5. Baby steps
Don't commit so much that you can't change your plan as requirements change. "Ready. Fire. Aim." Iterate. Iterate. Changing horses midstream is no longer bad advice. You are the champion over here, but you are the challenger over there. That one fact changes everything.
6. Bring the locals in on the cause
Whether you hire them or partner with them, make sure you have local champions supporting the cause. They know what you don't. They know which short-cuts can be taken, and which ones can't. Make sure their cooperation is win-win, by giving them some skin in the game.
7. Hire a leader, Trust him
Hiring your local leader is the single biggest move you’ll make. Work hard to hire the right one and see a two-way interchange of ideas flourish, as the company grows and learns in the new market. Hire the wrong one and watch him build a fiefdom you’ll have trouble penetrating later. Once you do hire the right leader, don’t second guess his insights and advice.
8. Support your leader with a talented team
A leader can't be a leader without someone to lead. Companies seeking to capture a market can benefit from a plurality of excellent brains, insights, and points of view. Get a team, because you can’t predict where your superstar insights will come from.
9. Set goals
You've done all your homework, now it's time to make a plan and execute it.
10. It’s On Like Donkey Kong
You're there. Make sure everyone knows about it. Just being there with your big brand will attract help to your cause. Potential vendors will come. Potential distributors will approach you. Partners will show interest. Customers will take notice.
11. First impressions are overrated, Last impressions are what count
Don't get scared by early results and change your plan irrationally. If you've done your homework, have the right team, and are committed, you'll be able to tell the difference between the right signals and the wrong ones the market is sending.
12. Give your local team some autonomy
You put them in the seats, and now that things are moving along, you can put them in charge. They'll move faster. And by the way, if incentives have been strutted right, they have as much at stake in your success as you do.
13. Execute the plan beyond the company's walls
Make sure your local team gets out of the office. Spend as much time with customers as possible. Build your network. A lot of what good that happens, happens just by being out there and being active.
14. Go after the low hanging fruit first
Get some early wins so your PR guys will have something to work with and the results will bolster your team’s morale. Convince your competition you can execute in your new market. Convince your more prudent customers that you're here to stay so they can trust to make use of your services.
15. Close the door behind you
Go after some victories just to keep them out of the hands of your competitors or other companies that might try to follow you into the market. Where possible, erase all the handholds you may have used to enter the market by filling them up with your products and services.
16. Make the rounds
Go ahead, go talk to everyone who wants to talk - with an open mind. You're flexible. You're not here to hurt anyone, everyone can win. Putting ideas in the heads of the different market participants that they have options (join you, abandon supporting your competitors) and their own bargaining power, will make life hard for your competition.
17. Remember the people back home and elsewhere
Victories in your new market will cascade across the world and help your brand everywhere. Failures will hurt you everywhere. Lack of integrity will hurt your brand at home and abroad no matter if you win or lose a specific fight.
18. Go after the sweetest customers
Some customers are sweet on their own. Some customers are sweet because they are models and influencers for everyone else. Not all customers are equal and equally profitable. Find the customers that matter to building what you want to build and go after them.
19. Keep the data flowing
If you don't measure it, you don't care about it. Some things you are used to measuring will be difficult here. Some things will be easier. Some data will make you want to change how you do things back home! One of the big bonuses of entering a new market is new lessons learned that you can apply everywhere.
The Long Haul
20. Stick to your story
Iterate, yes. Change, yes. But don't ever change your brand's story. It won't matter anyway, customers know who you really are. Customers know what story you are really telling. Trying to change it just makes you look like a liar.
21. Become local if that is good, Stay foreign if that is good
You know what I'm talking about here from a marketing point of view, but it also applies to operations. Sometimes going local is just plain better for executing. Look at what local companies do well and how they do it - mimic that. Why? Because the market is already set up to build those strengths in, and customers expect those things.
22. Pick your battles well
Mimicking the local winners doesn't mean butting heads with them straight on. Taking your own space means "defining" your own space. Define what you do to be something that only you can do well and dominate that space. From that protected space you can chip away at your competitors' strengths without ever actually meeting them in open battle.
23. Small is beautiful.
Small - that's you over there. Use it, don't deny it.
24. Keep the initiative
If you keep on moving, you keep on forcing others to react to you. Once you start reacting to your competitors moves you are playing their game. Everything you've done until now has been done to play your game well. You have to keep everyone else playing your game, too.
Foreign Yes, Strange No
You're playing in the global game now. Through your industriousness, your trade, and your ideas, you've helped make the world a more interconnected, safer, more prosperous place to live. Thanks for that.
Erudite Risk offers risk management and security-related professional services for multinational companies operating in the Asia-Pacific region. With operations in India, Korea, and Singapore, Erudite Risk is ready to help you meet the challenges of Asia, the most dynamic and challenging business environment in the world.
Rodney J. Johnson is President of Erudite Risk. He has lived in Asia for most of his adult life, but still longs for good Mexican food.
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