Entering a foreign market is a challenge no matter how big or small your brand is. Add to that the pressures of adhering with stringent rules present in certain countries and you have a formidable task on your hands.
The good news is you do not have to do it alone. Whether you are trying to break into payroll outsourcing in Spain or the hospitality industry in Morocco, we are going to share successful strategies that you can use to get a foothold in a new territory.
First things first, consider franchising as an option. This refers to selling or licensing certain aspects of your business and your brand to business owners in exchange for a cut of the profits and an annual fee from the franchisees.
The only prerequisite to this step is that you must have a wildly successful brand with crossover potential. You should at least have some proof that your brand can transcend into the markets you’re targeting. After that, just look for interested franchisees to help you break into the new market.
Just keep in mind that franchising is a huge risk, because you are trusting a virtual stranger to continue the legacy of a brand that you have built through sweat and tears. But if you can find reliable and driven partners then this strategy can really pay off.
As the name implies, this is the process of exporting goods straight to market; no middle-men, no third parties. For instance, if you want to sell cosmetics in Singapore, all you have to do is get a few local stores to stock your product and take it from there.
The most important alliances you have in this process are with your distributors and agents on the ground. They are your link to the country you are trying to break into. Since they know more about the Singaporean market than you do, they will provide you with valuable insights, advice and contacts that will help you make all the right moves.
The only thing you need to take care of is shipping and other logistical details.
Find a partner
Teaming up with a person that is native to the market you are trying to break into can be the easiest-or hardest-way to enter a foreign territory. It all depends on the role played by said partner. You could enter into a partnership with someone who’s passionate about your business and all aspects of it or you could partner with someone who specializes in a particular skill that will serve your mission of expanding into the new territory.
For instance, consider partnering with a marketing specialist who knows all the right buttons to push in order to get you results in the desired market.
If you decide to take this route, make sure to perform due diligence on your prospective partner to make sure he/she is the right person for the job.
It is important to note here that in some countries it’s essential to partner with a domestic ally. This is especially the case in Asian countries where foreign brands do not get much traction without some form of local endorsement.
A joint venture is when you sing a document to partner with another company or individual with a vested interest in your company. You will both have a 50% stake in the new venture which means you will have to split profits down the middle as well.
Buy an existing company
If you want an easy and straightforward way to break into a new market, this is it. All you need to do is find a company that is selling in your niche and buy it! Buying an existing company comes with many benefits. It gives you instant market share, access to an existing customer base with built-in brand loyalty, and licensing and regulations are taken care of as well.
The piggybacking strategy is only applicable if you have local brands or companies that carry your product. If you notice that one or more of those companies have an international presence, you can ask them to stock your product in their other stores too.