Entering A New Market
When companies decide to compete internationally, they should not automatically use the same strategies that they used in local markets. Thompson, Strickland, and Gamble suggest that companies should consider:
Whether to customize products or services by market or produce the same thing everywhere
Whether to use the same strategy everywhere or modify it by market
Locating production, distribution, service centers, and offices to make the most of the location advantages
Best practices for positioning their company in new markets
A company’s approach to strategy is key to gaining a competitive edge. A survey report from Oxford Economics, Manufacturing Transformation, shows that many executives are rethinking their current strategies in order to go beyond operational excellence to gain a competitive edge. As companies explore new markets, knowing how to adopt a strategy to fit new markets is key.
Understanding Local Labor Laws
Compliance with local labor laws is one of the most important aspects of a company’s global expansion. Every country has slightly different standards for how employers should treat employees. For instance, countries such as Japan, France, and Brazil make it difficult for companies to dismiss a worker. Companies that fail to comply with local labor laws in countries where they have operations may face fines, work stoppages, or lawsuits.
One of the best ways to ensure compliance in global markets is to work with an International PEO to help navigate labor laws in new markets. This Employer of Record solution helps your organization avoid needless costs and delays, so you can focus on international success.
Speed to Market
If a company is unable to enter a market quickly, it may not see the success it expects, no matter how innovative its product and service offerings are. A slow speed to market can result in a company’s product or service being considered outdated, especially if their competition was able to enter the market faster.
Here are some ways to improve speed to market:
Foster collaboration and communication within the team
Focus on improving efficiency in the organization
Develop an effective, detailed strategy for market entry
Keep the team on track to eliminate wasted time
Best Practices for Success in the Global Marketplace
- Scour Emerging Markets
International companies based in mature economies can use their relationships in emerging markets to speed along innovation. Whether a company chooses to bring new products from emerging economies into mature ones or is taking current offerings into a developing country, emerging markets are ripe with opportunities. Taking advantage of these growing economies can give a company the competitive edge they are looking for in global markets.
- Form Strategic Partnerships
Thompson, Strickland, and Gamble write that strategic partnerships can help by “filling gaps in technical expertise and/or knowledge of local markets.” As we mentioned above, partnering with an International PEO gives companies access to in-country experts. An International PEO not only provides insight into local labor laws but also helps companies on-board top talent in their desired country, even in countries that might face labor shortages.
- Innovate Everywhere
Innovation should be a part of every aspect of a business. Companies need to innovate at every level, especially when planning for a global expansion. The key to innovation is to develop a strategy that harnesses market trends, as opposed to reacting to them. Companies that are able to do so successfully as they expand into new markets gain the edge over their competition.
By employing a strong strategy, understanding local labor laws, focusing on speed to market, and using partnerships to drive efficiency and innovation, companies can gain the competitive edge they are looking for in the global marketplace.