This month I’ve had the pleasure of running a couple of exporting sessions with EduGrowth.
Many of these successful entrepreneurs are at the stage of their journey where they are starting to explore international expansion.
It’s often very early-stage thinking. The globe is large and varied after all, and picking the right next country can sometimes be overwhelming. Therefore, one of my sessions was about assessing what market your business should tackle next.
Here are five steps.
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1. Create a list of markets
Before choosing the next market to launch in, start by creating a long list of markets that could potentially be the one. While you may have started thinking about international expansion with a country or area already in mind, writing down all opportunities means you will be setting yourself up to make the most considered decision.
The selection can be based on one of these elements, or ideally a combination of them:
- Your experience with markets that do well in your segment;
- Your available resources;
- Barriers to market entry;
- Potential partnerships; and
- Pure opportunism.
2. Identify the market drivers
As a second step, you need to identify the key drivers of the market segment you are in. These could be generic drivers such as economic growth, government policies, government and private spend in your segment and segment growth, combined with more segment-specific drivers.
For example, the adoption rate of technology in the target audience would be very important for tech companies.
3. Define your market segmentation
When defining your segment abroad you must be laser-focused and avoid being too generic. The more you get to know about your segment in another market, the better. It helps to assess the potential and allows you to be prepared for any possible risks.
I have found the main segmentation criteria for education technology includes student age, affluence, parent’s involvement, private versus public education, type of school and teacher behaviour. This information gives clear direction for researching market opportunities.
Once you have identified your long list of potential markets, know what is driving them, and are clear on your market segmentation criteria, you can start scoring. By assigning a score against your unique drivers and criteria, you will start to see what markets are really opportunities and those which are too risky to even consider.
One extremely important criteria to take into consideration — regardless of what industry you are in — is the product-market fit. Understanding if your product needs to be adjusted (slightly) to match aspects of the new market environment, such as local customer needs or government regulations, is essential information to have before deciding whether or not to launch into that new country.
Other generic criteria that would be smart to include are the level of competition, trade conditions and the accessibility of the market.
5. Analyse the bigger picture
Lastly, assessing a market is not only based on hard data. While the data will speak many truths, your personal observations, experience, and an honest assessment of your organisation’s capabilities also come into play. So too does your network, available resources and deeper company mission.
Only when bringing these softer criteria into the mix will you find a comfortable prioritisation of markets — and thus a clear picture of where and how to grow!