Breaking into a foreign market – especially one with strict rules and regulations – can be a very daunting task. Often, business owners have the ambition to go international… they’re just not quite sure where to start.
Bubbles Translation Services is here to help. Over the last 12 years, we’ve helped over 1,300 companies break into new markets and we’ve identified eight ways that business owners achieve success.
Here are the eight strategies that you can use to establish a foothold in a new country. Take a look at the list below and see which one is most suited to your business – hopefully, after reading this, you’ll know where you should start.
#1 – Franchising your brand
Kicking off the list at #1 is franchising. In case you’re not familiar with franchising, it works like this:
- You create a successful brand (e.g. a restaurant)
- You allow business owners to open their own branches of your restaurant, aka franchises
- The franchisees pay you a certain fee and sometimes a cut of the profits per year, then they keep the rest
The good thing about franchising is that it’s one of the easier ways to break into new markets. All you have to do is take your existing, successful business model, find a franchisee in your target market, build out the franchise, and open your doors.
The bad thing about franchising is that there is almost always a compromise.
You can scout locations as much as you like, but if you don’t have firm brand recognition in the country you’re trying to break into, you’ll be just another business on the side of the street. That’s not the end of the world – many individual business are still popular – but it’s important to realise that franchising can only be used for certain businesses, and it has a sizeable amount of risk behind it as you’re putting your brand in someone’s hands!
#2 – Direct Exporting
Direct exporting is the most common of the eight strategies on this list. It’s pretty simple – you sell directly to the market that you’re trying to break into. For example, if you want to sell to Japan, you get your product into the appropriate Japanese stores and see how it does.
Your friends in direct exporting are your agents and distributors. These people are the branch between you and the stores. Trying to get a foothold with a major Japanese store as a foreigner is a lost cause, but with a reliable agent/distributor (and translation services company) on your side, it’s not! In fact, it’s easy… your agent/distributor have most of the contacts you need to succeed.
Of course, you’ll have to work out shipping logistics and everything else of that nature – but on the surface, direct exporting is very similar to selling products in your domestic market.
#3 – Partnering up
Partnering is a relatively vague term. It can be anything, really – you can get a partner in a foreign country to simply help with marketing (and receive a cut of profits), or, you can get a partner in a foreign country who is just as invested in all facets of your business as you are.
We’re big fans of partnering. Of course, you have to vet your potential partners thoroughly and make sure that you’re doing business with someone who will actually help you – not slow you down. But if you can get a good partner, you’ll be able to get a grip on your new market much more easily – he or she will know everything that you don’t about the new market.
(In some areas of the world, a partnership is a borderline necessity. For example, in many Asian countries, you simply will not be able to break ground if you’re a foreigner – you need a partner in each particular country to help you get by regulations and such.)
#4 – Joint Ventures
A JV (joint venture) is a partnership between two companies or people. They link up and become invested in some sort of business project – the investment is almost always an equal 50/50, and profits are split accordingly.
Usually, the two companies stay separate from each other, but work together on one particular venture to try and succeed.
#5 – Just buying a company
Buying a company in a foreign land is by far the easiest way to enter a new market.
- You immediately claim market share
- You have an existing customer base and brand image
- Even if the government has regulations on the industry for newcomers, you can bypass them with relative ease (and these rules and regulations will actually help you by keeping competition low)
- Governments will still treat you as a local firm in most cases in regards to licensing and such
Of course, there are downsides.
- You’re no longer one company, and your foreign operations in that particular market will be somewhat separate from the rest of your brand’s image
- It’s very expensive, especially if the business you want to buy is thriving
- Due diligence on a foreign company – especially one in a more obscure country – is much harder than on a domestic company
#6 – Turnkey solutions or products
Do you build something? Maybe your business is in construction or engineering. If you do, it’s worth trying to find turnkey projects in foreign countries to bid on.
“Turnkey” is a pretty apt name – a “turnkey product” is where you build something from the ground up, and whoever you turn the product over to just has to “turn the key” before he or she is ready to go.
These are some of the best contracts to get because they almost always come from governments. On the flip side, everyone knows that these are some of the best contracts to get, and you’ll often be competing with other foreign and domestic firms for the contract.
#7 – Piggyback
In order to piggyback, you need to already be selling product to other domestic companies.
If those domestic companies have international presences, all you have to do is give them a ring and ask the following:
“Hi, can you take my products to your international agencies too?”
Of course, phrase it a bit better than that – but you get the point. You’re jumping on the back of your existing business relationship and trying to make it into international markets that way.
#8 – Licensing
Licensing is somewhat similar to piggybacking, except instead of talking to domestic firms and asking them to carry the product, you talk to foreign firms and ask them to temporarily own the product.
So for example, if you have a great widget that you feel fits in perfectly with a company’s inventory in your new market, all you’d have to do is contact that company and ask.
We consider licensing to be one of the easiest ways to get started, but it’s not necessarily an “easy process” overall. You first have to convince the firm that your product is right for them. Then, you need to convince them that it will sell. Then, you need to deal with governments and lawyers to iron out all of the legal aspects of the “sale” of the license.
You don’t lose control of your product – it’s not the same as selling the rights to your product. You’re merely licensing the rights to your product to a foreign company for a limited amount of time.
Which market entry strategy should you choose?
Truth be told, we’re not sure.
No two countries are the same, and no two industries are the same. Whichever entry strategy you choose will be based on those two factors, and giving you a “one size fits all” solution would be reckless of us.
But we can tell you that when you’re ready to break into your new market, Bubbles Translation Services is here to help. Give us your existing brand material and we’ll translate it so that you appear abroad exactly as you do at home. With Bubbles, it’s that easy – contact us today to learn more.