What to consider before starting the business in the new regions?
1. Reasons for expanding abroad. Important questions before starting the project.
Very typical response regarding expansion is: “We produce the best products in our segment!” This is all well and good as long as there are other reasons to support the expansion.
Let us consider important questions, which you might wish to consider before taking the serious and costly decision to go abroad. We have organised them into few categories, which you can easily add according to your specifics:
General regional analysis:
Have you already done initial research of the region(s) you would like to expand?
Is there enough market volume for your product or service? Does this new region already have similar products or technologies at all? Is there already/or will be a demand for your products in the near future?
Is there an infrastructure in these new regions for introducing your products and services – are there enough distributors or resellers, will you be able to find qualified staff in the event of opening an office, how much will ads and PR cost you and do you already have the infrastructure?
Competitors situation in the regions:
Are there any local competitors in this new region and what is their strategy, pricing, benefits, weaknesses?
Are there any of your international competitors in this new region? Yes, you may know how to compete with them in your local market, but are they working within the same rules, positioning, pricing in other countries as well? Are you 100% sure?
Adaptation, localisation, licenses, and certification needed in the regions:
Do your products and services require any corresponding licensing, certifications, standards? Have you checked this in the region, where you would like to expand?
What is the volume, budget, and terms for localisation of your product and marketing for new market?
How much it will cost you and how long it will take to create brand-awareness in the new market and to create 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 and variant, however the above points are an absolute must before starting business development in the new region.
Proper preparations, realistic and even worst-case scenarios checked in advance, taking off «rose-tinted spectacles» allow companies to save thousands and billions in their budget in the future.
GloBAS Group approach always does preparation research as a Step 1 to avoid disappointments in the future and to have the real local situation at the forefront of the project.
How to start a business in the new regions? To be continued…