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My company, Educate Online, specializes in online education. We are actively expanding the geography of our presence: Latin America, India, China, Nigeria and other emerging economies.
All markets are unique, but there are some common things you need to know before reaching new destinations. Today I want to share with you an experience and insights I gained while launching a product in new foreign markets.
Reasons to seek new markets
First of all, why should you even consider entering new markets? It’s not a simple question. There can be many reasons. Here are some of the main ones below:
New markets mean new opportunities: As the business thrives and its market share grows, the entrepreneur may face growth constraints. After all, in many cases the local market has a limit. The most important thing here is not to miss the moment when you hit a particular cap. At this stage, you are actively developing, researching a new product, growing or stagnating, and then your competitors are overtaking your business. Remember that a company that wants to be the best company must continually expand its roots.
Diversification protects you from risks: Don’t put all your eggs in one basket. Every investor knows that you cannot invest all your money in one asset. The same rule applies to businesses. If the profit of your business depends on only one market, then in the event of an economic, political or other crisis, you risk losing all your money. A problem like this will not affect your business if your business has sources of income in other markets.
You can quickly gain a competitive advantage: Entering new emerging markets means you can benefit from substantial competitive advantages. A successful start-up can ensure the prosperity of the business for many years. It often happens that we look at a foreign market and immediately understand that this market could be our lucky charm. Any delay could harm our competitors.
The advantages of entering a new market seem obvious, but what about the disadvantages? Is there? And what should you keep in mind when starting a business in an unfamiliar country?
Related: When is the best time for my business to enter a new market?
Risks related to entering new markets
Don’t think that getting into a new market is quick and easy. Entering a new market involves several risks and difficulties that our company has faced. Here they are below:
Cultural risk: The discovery of a new market is always accompanied by the search for a new product that meets the needs of the customer. The preferences and financial capabilities of the public are very different, so it is difficult to say in advance which product will be successful. In addition, the mindset and cultural preferences of customers in a particular country are of great importance. You need to speak with the audience in one language, understand their issues and needs, and be patient and sensitive with cultural traditions.
Need a new team: Each new market requires an upgrade of business processes and the hiring of a unique team of specialists who know the specifics of the local market. All of your employees should be immersed in market knowledge and understand how to interact with new customers. Finding such professionals is a headache that can take weeks or months.
Country risk: It would be helpful for you to remember that there is always a possibility that significant economic or political changes may occur in the country where you are doing business. As a foreign citizen, you should never forget that your business will always be at high risk in a foreign country. In this case, you may be investing money and time – and at the same time not understanding the returns you will get.
Related: Here’s how to successfully expand into new markets
As for me, I realized that it is only worth seeking new markets when you already have a successful and sustainable business. You must have a base on which to build something new. If not, you may fail in the new market. and lose your position in the old one.
Also, when you enter a foreign market, you should immediately determine when to search for the minimum value product (MVP). The main mistake is to get bogged down in the market in the endless search for MVP. So, try to create a product that will have a unique benefit for your customer all over the world. In this way, you can significantly increase the chances of success for your business.
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