Market Entry Strategies: A Four-Step Process for New Export Markets
Information provided by Mentor Works
Business owners need to evaluate the export opportunity, pilot and test exporting if possible, and have an export market plan. Now that you’ve decided that the rewards outweigh the risks and that there’s a positive return-on-investment (ROI) in your export market plan, you need to start planning export market entry strategies.
In this article we’ll review some of the steps you should consider when developing an export market plan.
While the following list is by no means exhaustive, it should help you start brainstorming to determine your business’ export market readiness, and some of the ways you can reduce the risks and increase your export plan ROI.
Export Market Strategy Development: Review, Plan, Review, and Plan
You should always review your company’s export history and experience to see what lessons can be learned. What worked, what didn’t, who was involved, and who should’ve been involved? All these questions can help inform your export strategy going forward.
Once you have a good idea of your institutional readiness for exporting, you can start to develop your export market entry plan. Planning enables you to get a good handle on your target market, build action items, and assign responsibility to different team members. From here you can also identify gaps in your internal team and where you need to fill them, either with a full-time hire or with a consultant to support on a temporary basis.
While the process varies based on your previous experience in exporting, it’s always worth reviewing, building a plan, reviewing that plan, and finalizing. The following four-step process can be quite helpful:
- Review: What has the company done historically? How have they performed in international markets? What lessons apply to the market you’re looking at now?
- Plan: Develop a quick initial plan that you can run by stakeholders for their input and feedback.
- Review: Review everything with people who will be involved, ensure they are aligned with the project and process, and gain consensus on the approach.
- Plan: Develop your final execution plan and get ready to start working in that market.
Export Strategy: Important Planning Lessons Learned
If you’re a Canadian business exporting for the first time, you can still use your company’s history to learn applicable lessons. How does the company traditionally launch products? What marketing techniques and channels are similar in the target market? While there will be many similarities, it’s important not to overemphasize how similar the markets are.
Many of our clients look at the US as a larger version of the Canadian market.
While there are many similarities – especially along border states – the American market is vastly larger and far more diverse than the Canadian one. For context, Canada’s GDP is approximately the same as the state of Texas. Combine the much larger market size with the cultural diversity across the country and you’ll see why it’s important to carve out a unique exporting strategy for the US In some cases, we even recommend regionalizing your strategy for the American market even further.
When going into international markets where there are significant economic, cultural, and political differences, you can still benefit from your company’s own history and experience. Careful planning when you’re looking into vastly different markets is critical; you need to understand how your business operates domestically first, then determine how to mirror that internationally. When you have to change your operating model, think very critically about how much you’ll need to change, if that change is feasible or desirable, and how that change impacts the business more widely.
The point isn’t to scare you away from exporting, but rather to show there’s a significant amount of risk, exposure, and uncertainty that comes with getting into a new market.
Companies can mitigate these risks and uncertainties with careful planning. Alternately, in some cases the project is very time sensitive and responds to an opportunity that needs to be addressed immediately. When we encounter this, we always recommend that clients do as much planning as is reasonably possible, capture the immediate opportunity in front of them, and then take a pause to reflect and plan out a wider market entry. We like to consider this approach as a “staggered market launch” with soft entry focused around a trade show or initial sales opportunity followed by full launch.
Third-Party Support Where Needed
Obtaining third-party support for export projects can help give your company a competitive edge. Beyond the time and opportunity cost savings of having a third-party group manage the project, you can gain valuable objective insight from a group who has supported many export projects in the past.
While many of our clients are first-time exporters looking for feedback and support in getting into a new market, we also commonly work with established exporters to help them enter their next export market more efficiently. Even engaging our team for a simple plan review and short feedback session can provide insight into your plan – and some of the gaps and areas you may not have already considered.
Business owners and executives interested in learning how to prepare for government funding and export success are encouraged to register for an upcoming funding webinar or event.
These free government funding sessions led by Mentor Works will cover trends in government funding programs, identify specific grants and incentives worth applying for, and explain how to optimize the funding identification and application process.
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Mentor Works is a business support organization specializing in Canadian government funding. The Ontario-based business has helped hundreds of businesses build and execute their funding strategy through a mix of federal and provincial government grants, loans, and tax credits. Mentor Works offers free online resources, funding webinars, and news via their website at www.mentorworks.ca.