The basics of expanding your business abroad
Expanding your business abroad is an exciting challenge, and has the potential to push your enterprise to new heights. However, language, cultural and legal barriers can be daunting, but with the right advice and careful research, you could soon find yourself serving a whole new market.
1. Do your research
It is vital for any business to plan entry to a new market carefully. In addition to market research, businesses need to gain a basic understanding of common business etiquette by visiting the country where they intend to do business. Working with organisations that know the market directly can help.
Understanding a niche market is something that British payday loans provider Wonga is best known for. Launched in 2007, Wonga quickly became one of the UK’s fastest growing companies thanks to its commitment to responsible lending and its honesty on its charges and policies, which gave the company credibility with consumers.
As well as this, Wonga filled a gap in the market by successfully identifying a niche market segment that was, at the time, underserved. While many payday loan companies have, in the past, focused on lower socio-economic classes, Wonga instead targeted young, urban professionals, who, as Wonga claim, “previously used the banks to borrow money”.
Wonga certainly is an intriguing example of the growth that can be achieved when a company identifies and serves a viable market segment. It was this level of research that allowed Wonga to expand into Spain in 2013 when it bought up Credito Pocket, which was based in Barcelona, thanks to a demand for payday loans from that market.
2. Relationships are crucial
Cultivating strong business relationships is essential for success in a new market. If you don’t know anyone in your target market, there are plenty of commercial services available to help businesses find distributors and partners abroad. However, how you cultivate relationships depends on the culture.
As well as this, it is important to build relationships with your customers. As a new business in a new market, building a bond with potential customers means speaking to them in their language and using localised content to help them relate to your business. Just as with Wonga, trust plays a key role in developing long-term relationships between consumers and companies, and operating in a transparent manner is the best way to achieve commercial success.
3. Understand local expectations
The pace at which you do business will not be the same everywhere. Likewise, different cultures will have different priorities and different values. Understanding local expectations is important if you wish to fully immerse your business into a new culture. Presentations and meetings may be extremely formal, or may begin late; depending on what country you are in. At the same time, management structures can vary wildly, from being strictly hierarchical to a linear, equality-based management style. Adjusting to local standards as much as possible will make it much easier for your business to be relatable.
Overall, expanding your business abroad requires careful planning and research, and a dedication to building relationships, both with other businesses and your consumers in order to ensure success.
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