TGG helps businesses to analyse, select and enter global markets. We have years of experience working in multiple international markets across a wide range of sectors. This series of posts is meant as a high-level guide to help people through the complex world of international trade. We have selected 10 areas to focus on which we feel are crucial for success.
Step 1 – selecting a market
Far too many companies’ approach to international trade is reactive rather than strategic. People react to chance enquiries or random meetings at trade shows and those ad hoc encounters are somehow translated into a global market strategy. This approach seldom works. Your approach to international should be strategic and long-term because experience shows us that other approaches tend to end in costly failure.
You need to think very deeply about which of the many international markets you could attack are most likely to bring you a return on your investment within a timescale which you are comfortable with – and it is important to stress the need to factor timescales in at this stage as international is very rarely a ‘quick win’ in terms of ROI.
So what factors should you consider? Well one factor you should probably dismiss immediately is macro-economics. Just because India will grow at 8% in the coming years doesn’t necessarily mean India is right for your product; just because Europe is generally flat doesn’t mean you should ignore it. Macro economics give you a broad brush overview, what you need is a much more detailed analysis which takes into account such issues as:
- Is a market ready and suitable for your product?
- How strong are the local competitors?
- Are your international competitors active and successful in specific markets?
- What are the local pricing points and could you be competitive?
- What is the prevailing local political attitude to international trade?
- How confident are you with regard to exchange rate risks?
- How comfortable are you with local business culture – is it a market you feel comfortable doing business in?
If you are looking to start trading internationally or to expand out from an existing base of international clients, you need to start by developing a long list of potential future destinations and then use a pre-defined set of criteria to whittle that long list down to a handful of candidate countries. At that point, and only at that point, should you start to do much more in-depth research into your selected target markets.
TGG has helped many companies to select potential markets which might be right for their growth plans and then moved on with those clients to do much greater in-depth research in order to develop a robust go to market plan – and it is this essential research piece of the puzzle that we will look at as the next step in this 10 step guide.
If you would like a more detailed overview of how TGG could help your company develop a robust global strategy, please contact me.