One of the reasons vertical market software companies decide to join Volaris Group is to learn from like-minded peers. And for companies looking to expand, our global reach means that can access contacts and market data that can help businesses expand to new geographical markets.
Recently, we held a Volaris Strategy Exchange session where Lumine Group's Jonas Svensson shared his experiences expanding a business from its home market in Sweden to a new market in the U.K. Svensson accomplished this feat while he was the CEO of Netadmin Systems, with the support of Volaris.
Below, we summarize the advice he shared for entering a new market.
1. Assess your readiness to enter a new market.
Be sure your company has reached a stage where you are ready to prioritize expansion. Carefully evaluate whether you and your staff will be able to invest time, budget and resources toward exploring a new market.
If your team is still devoting a lot of their focus on “putting out fires” or responding to short-term needs, consider whether this is really the best time for the business to enter a new market.
Most importantly, ensure your leadership team is aligned with your vision of global expansion.
2. Understand your customer and define your target market.
When entering a new market, you must think long-term. Ask yourself whether the market is experiencing enough growth for your investment to be worthwhile, and whether your target customer segment is experiencing growth.
Conduct market research to support your case for an expansion. Possible research can include government census data, trade publications, and sales reports and trends.
Profile the types of customers in your new target market. Include details such as the types of businesses you will serve, their annual revenues and types of products or services sold. Find out what their buying habits are, and what is important to them when selecting a new product or service.
3. Assess competitors and identify a market entry opportunity.
Collect data as you can about your potential competitors, including: the types of products or services they offer, their market share, pricing structure, company performance, and sales and marketing strategies.
Understand your competitive advantage within this new market—where do you have an opportunity to service customers where other companies have not?
Determine what your customers would be willing to pay for your product or service, and how your pricing structure would stack up against competitors.
4. Assemble your expansion team.
Consider how your management team in your home market will work with a satellite team in your new market.
Hire local staff to facilitate a more natural transition to the target market’s local business culture. This will also aid with logistical challenges, such as working in different time zones.
Don’t underestimate the challenges that can come from language, cultural or geographical differences. Other cultures may have a different pace of doing business or use different methods to develop trust and resolve conflict.
5. Adapt your sales and marketing strategy to the new market.
If your local competition has been established in the market for many years, think about how you will persuade customers to choose your product. You may need to develop a new marketing plan, which can include advertising or sales strategies customized to the local market.
Remember that customers in your new market may not behave in the way you are used to in your existing market. Don’t be afraid to adapt your sales and marketing strategy to uniquely target the customers you want.
Set goals for gaining market share and determine the amount of time you will take to gain a stronger foothold in the new market. Once you have established an understanding of your customers, ask what you can do from a customer service perspective to make your product “sticky” and therefore more valuable to them.
At Volaris Group, we support our businesses in expanding to new markets by providing a vast global network and extensive market data. If your company is interested in expanding to a global market, Volaris could be the right home for your company.