MaRS Library Your guide to growing global: What to consider before expanding internationally
In an era when global expansion is more critical than ever before, choosing to go international can feel overwhelming. Yet the decision to enter a new global market can be rewarding and mark a milestone for your company’s growth.
This article summarizes what you should consider before taking that leap and entering a new market—it complements the International Scoping Canvas (details below) and walks you through it.
International expansion requires a strategy
A company needs to build a solid foundation before growing globally. It’s important for companies to shift their mindsets and think about expansion as a holistic approach.
Check out and use the International Scoping Canvas developed by Kiran Panjwani. It’s a guide that poses realistic and honest questions about your organization’s current state (where you are now) and future goals (where you want to be) while addressing business concerns that you might not have thought about before expanding.
The canvas helps you scope an expansion into a new region, so treat it more as a strategy document than as a step-by-step process. Every organization is structured differently and will therefore execute its expansion strategy differently.
Have you determined your goals?
Before you can determine whether your products or services are a fit for the global market, it’s important to take a look at your company’s goals and value proposition. Your business should have a clear picture of where it is today, where it wants to be in the future and how expanding internationally fits into its overall strategy.
Is growing globally your vision or the team’s vision?
One of the biggest challenges companies face is in failing to prepare their teams to grow globally.
Don’t underestimate its importance!
It’s critical for all team members to have a “grow globally” mindset, and companies must be prepared to build the right competencies to ensure all employees are engaged and executing the company’s growth plans.
Is your technology ready?
When your company expands into a new market, is your technology ready to support that growth? In other words, is your technology scalable?
When evaluating your technology, assess the following:
- Back-end infrastructure support
- Security systems
- UX adjustments
- Market-related standards
- Currency adjustments and payment
Why does the market need your product?
With hundreds of countries to choose from, companies need to carefully analyze where to focus and grow globally. First, think about why and how this new market will adopt your offering. Consider:
- Why does this market need your product?
- What do you have to know or learn before launching the product in this specific market?
- Who are your competitors?
- How much effort would it take to educate this market about your offering?
What do you gain from this expansion?
Now that you know why the market needs your product, shift your attention to what you’ll get from this expansion. This allows you to make sure it’s worth your investment of time, money and effort. When addressing this question in the early stages of growing global, there are six aspects to consider, as presented in the following chart.
(Total addressable market)
(How many users are in the market?)
(Content and/or distribution)
(How dominant are the others?)
|Return on investment
(E.g., size of investment needed)
|Ease of business
(E.g., employment law)
The items in this chart are in no particular order, and the category weight of each depends on which phase of international expansion you are in. For example, if your company is in the early stages, the weight should be heavily distributed among ease of business, penetration and partnerships. As your business grows, TAM and return on investment can help you make decisions and build your global markets.
Accept that there will be risks, but do your research
When moving into new markets, failing to plan almost guarantees failure. Companies need to acknowledge that growing globally is not a risk-free process. It’s important to carefully manage the risk either through market research and preparation or by exploring and carrying out mitigation strategies.
Areas of risk to examine include:
- Governmental, political and regulatory environments
- Tax and legal implications
- Labour laws and standards
- Business entities
- Intellectual property (IP) protection
The International Scoping Canvas helps you make better decisions
Organizations often end up making impulsive decisions on their expansion strategy and go where the wind blows. The International Scoping Canvas helps you think holistically before you decide to make a move.
Plan for global success
Let’s face it: Going global is important for a company to reach its full potential, but it’s a process. Use the International Scoping Canvas as a guide to begin that conversation—it will help you understand where you stand in your global growth plan.
- Foresight in five steps for SMEs and startups.
- Aligning your intellectual property (IP) and business strategy and goals.
- Elements of a product’s value proposition: Functional, self-expressive and emotional benefits.
- Pivots: Part 2 | The search for product–market fit.
- What financing approach is right for your business?.