In the context of globalization, expanding international markets has become a key strategy for small and medium enterprises (SMEs) as well as startups to grow and compete effectively. However, accessing new markets still faces many challenges, from understanding the target market to operating and managing business activities in the new market. This article will provide an overview of international market expansion strategies for SMEs and Startups.
Research about international markets
The first step in an international market expansion strategy is to thoroughly research the potential market. Businesses need to evaluate the needs and opportunities for their products/services, analyze competitors, and thereby identify appropriate target markets.
Assess needs and opportunities
Researching and assessing market demand is very important work. Businesses need to clearly understand consumer habits, trends and needs of customers in potential markets. This will help businesses orient and adjust products/services to suit new markets.
Analyze competitors
Analyzing competitors in the target market, including local businesses and other international businesses, will help businesses gain insight into the market, thereby building an effectively compete strategy.
Target market selection
After thorough research and analysis of market needs and opportunities, along with competitor assessment, selecting a target market is the next important step in an international expansion strategy. During this process, businesses need to consider factors such as market size, economic growth rate, level of competition, and acceptance by local consumers.
A suitable target international market will need to have enough growth potential to ensure profitability, while also being compatible with the capabilities and strategy of the business. In addition, choosing the target market also requires careful assessment of the business environment, legal regulations, culture and labor market. These factors can affect a business’s ability to operate in new markets.
Develop an outreach strategy
After selecting the target market, businesses need to develop an access strategy that includes product, price, distribution and promotion elements.
Product strategy
Businesses need to consider adapting products/services to fit new markets, including improving features, design and product repositioning. This helps better meet customer needs in the target market.
Pricing strategy
Pricing products/services in the international market requires attention to many factors such as production costs, level of competition, customer purchasing power, etc. Businesses can apply strategies such as price penetration or price discrimination in target markets.
Distribution strategy
Businesses need to identify suitable distribution channels in new markets, possibly through agents, distributors or online sales. Choosing a reasonable distribution channel will help products/services reach customers effectively.
Promotion strategy
Businesses need to have a suitable promotion strategy to promote products/services in new markets, including activities such as advertising, promotions, participating in fairs, exhibitions… This helps create recognition of the brand and attract customers.
See more: 3 factors affecting a business’s marketing environment
Operation and management
Once you have a strategy to access the international market, businesses need to focus on operational and management aspects to ensure business operations run smoothly.
Risk management
Risk management is an integral part of any expansion strategy. Expanding into the international market carries many potential risks such as exchange rate fluctuations, legal risks, political risks… By identifying and having an appropriate response plan for each type of risk, businesses can enhance stability and sustainability in its international business operations.
Corporate culture and foreign affairs
Understanding and respecting the culture and customs of the new market is extremely important. Businesses need to focus on building good relationships with partners and customers in new markets, while proactively learning and adapting to local culture.
Finance and investment
Expanding business to international markets requires businesses to have significant initial investment capital. Businesses need to make detailed financial plans, manage cash flow, and closely monitor investment efficiency (ROI) to ensure effective business operations.
Pay attention to the legal responsibilities of businesses in international markets
When entering the international market, businesses need to master and comply with a series of diverse, complex but extremely important legal regulations. This not only helps avoid unnecessary legal risks but also demonstrates respect and commitment to international standards.
One of the most important aspects of international legal responsibility is compliance with corporate governance and corporate social responsibility (CSR) regulations. CSR is not only about compliance with laws but also includes conducting business activities responsibly, ensuring the rights of stakeholders and contributing to the sustainable development of communities.
Businesses also need to pay attention to compliance with labor regulations, environmental protection, and anti-corruption. This not only helps them avoid serious legal consequences but also contributes to building the image and reputation of the business in the international arena.
In addition, understanding and applying the principles of international law is also an indispensable part of corporate legal responsibility. This includes compliance with trade agreements, intellectual property regulations, and other international standards relevant to their business operations.
Finally, implementing international legal responsibilities is not only about complying with regulations but also an opportunity for businesses to show initiative in contributing to the common development of the world. This not only brings legal and economic benefits but also helps businesses build a strong and responsible brand.
Expanding international markets is an important strategic step for SMEs and startups to grow in scale and enhance competitiveness. However, this is also a process that requires businesses to have carefully prepared plans and strategies. By learning about the market, developing an appropriate approach strategy, and managing operational issues well, businesses will be able to successfully expand their business to international markets.