What to consider BEFORE starting business in the new regions?
Let’s consider typical mistakes, risks and reasons of budget «holes» when starting business in a new region.
1. Argumentation for expanding abroad. Important questions before starting the project.
Very typical postulate for expansion is: “We produce the best products in our segment!” And it would be so great, unless this is the one and only argument of the decision to go abroad.
Let us consider important questions, which you may find reasonable to ask before taking serious and costly decision to go abroad and subdivide them into few categories, which you can easily add according to your specifics:
General regional analysis:
- have you already made an initial reasearch of the region(s) you would like to expand?
- are there enough market volume for your product or service? does this new region already have similar products or technologies at all? Does it have a demand already or in the nearest 1-3 years in the products you offer?
- are there an infrustructure in this new regions for indroducing your products and services – are there enough distributors or resellers, will you be able to find a qualified staff in case of opening an office, how much ads and PR will cost you and are there qualified channels at all?
Competitors situation in the regions:
- are there any local competitors in this new region and what is their strategy, pricing, benefits, weaks?
- are there any of your international competitors in this new region? Yes, you know how to fight with them in your local market, but are they working on the same rules, positioning, pricing in other countries as well? Are you 100% sure?
Adaptation, localization, licenses and certification needed in the regions:
- does your products and services require any kind of licensing, certifications, standards corresponding? Have you checked this in the region, where you would like to expand?
- what is the volume, budget and terms for localization of your product and marketing for new market
- How much it will cost you and how long it will take to create a brand-awareness in the new market and to create a demand. Are you ready and able to invest x2 times longer and pay x2 times more, if something goes wrong with your estimations?
- … I can continue this list of questions for each particular case, but the above mentioned are absolute must before starting business development in the new region.
Proper preparations, realistic and even worst case scenarios checked in advance, taking of «pink glasses» allow companies to save thousands and mlns of budget in future.
GloBAS Group approach is always do a preparation research as a Step 1 to avoid dissapointments in the future and to have the real local situation in front of the project.
How to start business in the new regions? To be continued…
Or simply ask us now 😉