Expanding your business into another country can be a great way to boost your audience and revenue. Growing internationally gives you access to a more extensive customer base, opening opportunities for new revenue streams. You can ensure a smooth international expansion by researching the people and competing brands in an area before expanding overseas.
Using surveys to conduct research will provide you with the data required to make the most out of your expansion. Learn more about the importance of market research before planning an international expansion.
The Benefits of Expanding Your Business Internationally
Taking your operations and products into another country provides you with a variety of new business opportunities. Here are some of the greatest benefits of expanding internationally:
Enter new markets: Expanding into a new area provides unique opportunities to build your customer base. It also diversifies your revenue streams, making it so you can lean on more than one if revenue fluctuates. Seasonal business can expand to areas with different climates and enjoy a steady revenue stream year-round. Entering new markets is especially effective when you offer a unique product previously unavailable in the location you’re expanding to.
Stay ahead of the competition: If your business operates in a saturated market and you face a lot of competition in your niche, expanding internationally can help you gain a new foothold among your competitors. By introducing your offering abroad, you can reach consumers untouched by the competition.
Reduce costs: Some countries have significantly lower labor and material costs than others. Expanding into those countries allows you to reduce operating costs, resulting in savings to your bottom line.
Discover international talent: A new location gives you access to a pool of candidates who offer unique skills. Hiring local workers has the benefit of improving communication between your company and the people in the new area. Local talent can also improve service to more of your international clients. New workers in different time zones will increase your availability for serving customers.
Factors to Consider Before Expanding Internationally into New Countries
Although there are many benefits to expanding your business to different countries, you should think carefully about the decision before investing. Here’s what you should consider when expanding internationally:
The country’s culture: The social norms of countries can play a significant role in how you interact with consumers and the success of your offering. Each country’s culture is unique, with different expectations of how people present themselves and interact. Before deciding on an area for expansion, first determine whether your offering is compatible with the local culture at all. Preliminary research is essential to ensuring success abroad. Also, be prepared for an adjustment period as your company familiarizes itself with the new country’s customs.
The economic climate: The market landscape of the country you’re considering can impact your investment in the long term. Consider the state of the country’s economy, the level of competition in the industry and any potential areas to make your offering stand out from similar products.
Product familiarity: Before choosing a location for expansion, consider whether the people are familiar with products similar to what you are offering. On one hand, if the competition has already saturated the market with similar products, making your product stand out may be challenging. But if your offering is entirely novel to the region, you will also need to invest in educating people on your product. The extra layer of marketing can significantly add to your expenses, though, if successful, it will pay off tremendously.
Your brand presence: Whether they have seen your products advertised online or have experienced them in person while traveling abroad, the locals will be more likely to purchase your products if they recognize your brand. Consider researching brand awareness before deciding on a new location. Choosing an area where you have already planted the seeds of brand recognition can give you a competitive edge.
Geographical distance: The distance between your business locations can have advantages and disadvantages. A closer market allows for faster and easier communication between franchises, and it also becomes easier to share common resources. Consumers in immediate areas will be more likely to have heard of your brand already. In comparison, expanding to a more distant area increases the range of potential customer reach, though time zone differences can make communication challenging. The more geographical distance you cover with your expansion, the more resources you should invest in logistics.
The Importance of Market Research Before Expanding a Business
There are many benefits to conducting surveys when you’re planning for international expansion. Surveys help you better understand your audience, which allows you to develop products and marketing strategies to match their preferences and expectations. As you reach out to new customers abroad, finding ways to connect with them becomes even more critical.
Here are some advantages to performing market research before expanding a business internationally:
1. Know Your Competition
When you expand into a new country, you’ll likely face many competitors with long-standing connections to the area. Trying to settle alongside the larger powers has a low chance of success because the consumers have already become comfortable with the existing brands. By researching the competition before you expand, you can identify areas of the country where the competition has less of a hold over consumers.
2. Understand Your Customers
From cultural differences to their exposure to different brands, the people in a new country will behave differently than your current customers. They may appreciate unique aspects of certain products, or their purchasing motivations may be drastically different. Market research will tell you what the new audience looks for in goods and brands, and concept testing will help you determine if they’ll like your product. You might also learn about rising trends in the area, which can open exciting opportunities for product development.
3. Reassure Your Investors
International expansion poses a financial risk, which can be a challenging prospect for your shareholders. The best way to convince your investors of the benefits of expanding is to back up your words with gathered data. They will be much more likely to support the expansion if you can demonstrate to them that the new audience would be interested in your product.
4. Identify Potential Issues
During your research, you can also identify whether your company and product are compatible with the new country. Each country has its own laws for products, labor requirements, taxes and other production and product standards to meet. Your preliminary research will help you spot regulations contradictory to the way you do business. That way, you can elect to alter your methods or choose a more accommodating area for your expansion.
Conduct Market Research With Lucid
When you need to learn more about your target audience in a new country, the best way to get to know them is by asking them directly. With millions of respondents available across over 100 countries, the Lucid Marketplace can help you find answers no matter where you choose to expand. You’ll receive high-quality responses quickly so you can get right to planning your expansion.
Ready to find data-driven answers for your international expansion? Use our price estimation tool to plan your next international survey. If you have any questions or would like a formal quote, feel free to contact us today.