Five Questions to Ask Before Entering a New International Market

1. Is there actually a market for our product?

Demand, competition, customer segments, purchasing behaviour and market size. The feasibility with which your business can determine the “how, where, and when” you can enter a market determines your market entry success.

Process:

1. Internal needs analysis: Determine what your business strategic objectives are and how capable your business is at meeting these objectives. What are your strengths, weaknesses?

2. Identify potential markets: Will this market maximize profits? Will it increase market share? Will it maximize cash flow? Will it reposition the business? Will it help acquire resources?

3. Consider potential issues: Identify barriers to entry, competitors in the market, substitute products, bargaining power of buyers and suppliers.

4. Create an action plan.

2. Can we legally and practically sell the product there?

Product requirements, labelling, import restrictions, registrations, taxes/VAT, etc.
Considerations:

• E-Commerce: trust, privacy, security, fraud, cost, taxes, skills, and governance.

• Global trade issues: movement of labor forces, corruption and ethics, human rights, cultural diversity, health and safety, outsourcing and offshoring, environmental protection.

• Global customs, principles, treaties, conventions, and law.

• Global Trade Agreements and Regional Economic Blocs.

• International contracts, conflict, and resolution processes.

• International partnerships and agreements.

• Intellectual Property (IP) law.

• International competitions and antitrust law.

• International financial systems, payment methods, and documentation.

• International transportation of goods, insurance, dangerous goods, and Incoterms.

3. Can we deliver the product competitively?

Freight, fulfilment, delivery expectations, returns, duties and landed cost.

Structure:

Global Supply Chain: suppliers, manufacturers, warehouses and inventory, customers, and transport.

Resources: people, technology, and processes.

Process: Plan, Source, Make, Deliver, Return.

Inventory management: memory, fixed, zoning, random.

Pricing mechanisms: continuous monitoring, discounts, and competitive advantage.

Shipping and delivery: receipt of order, process order, preparing documentation, packaging goods, transporting goods, clearing customs, customer delivery, invoicing.

Risks: political instability, exchange rates, supplier bankruptcy, natural disasters, customer demand fluctuation.

4. Does our existing e-commerce experience translate to this market?

Language, currency, payments, domains/SEO, product content, cultural expectations and customer service.

Structure:

a) Localized translations and currency: Shopify store setup includes automatic translations and currency changes based on the global market landing pages.
b) Payment methods: global market payment method options.
c) Domains and SEO: website URL and SEO indicate local market.
d) Product content: Product Description Pages (PDPs) translate to global market.
e) Cultural expectations: viewpoints, assumptions, beliefs, and behaviour. Understanding cultural, demographic, and value systems of local market.
f) Customer service: qualitative analysis of local market includes understanding of culture, and language.
g) Values: global market differences in values expand into individualism and collectivism, uncertainty avoidance, power distance, masculinity and femininity, long-term and short-term orientation, and time orientation.

5. Does the opportunity justify the investment?

Expected revenue versus market-entry costs, margins, risk and resources.

Finding an attractive market and finding an attractive market for your business are not the same thing. Your business must consider expected revenue versus market-entry costs, margins, risk, and resources required to enter this market.