How to Scan And Evaluate A New Market
Expanding to a new market can be extremely rewarding for your business, but before you take the leap, SACCNY wants you to consider a few things to find the right fit.
Many Swedish companies have decided to expand and develop their companies in the U.S., and for lots of good reasons. The U.S. is and remains the largest, most prosperous consumer market in the world. Bigger profit and sales aside, it is a great way to drive for more innovation.
That said, new opportunities often come with extensive risks. Which is why, before jumping into this big decision, it is important to take a step back and gauge if the new market is truly a good fit. To that end, each professional must ask: What opportunities does this new market bring? Is there (enough) demand for the product or service I am selling? What does the competition look like? What customer segment should I target and how do I reach them?
Given the number of issues involved, evaluating a market can be overwhelming. To make your life easier, SACCNY has gathered six ways to kickstart the process.
1: KNOW YOUR PRODUCT
It is difficult to figure out your best market, competitors, and potential factors for success if you are not familiar with your own product or service. This is why you must be crystal clear about your 4P’s of marketing (price, place, promotion and product). That way, you will have a basic idea if your business will fit into the new space.
2: UNDERSTAND THE CULTURE
Cultural difference can make or break your company in more ways than one. On the operational level, the understanding between co-workers can affect productivity. On the marketing front, it determines the relatability of a product to its audience. Therefore, you must learn about the locals in the new market. Figure out if your product or service really caters to their needs or interests. Learn about the country’s religious and cultural traditions, and whether they could affect the running of your business. Essentially, the more you know about the general and working culture of the new market, the better you can deduce if your business is a good match.
3: CONDUCT MARKET ANALYSIS
Inevitably, the feasibility of a new market boils down to numbers. If nothing about the new market makes financial sense, then it is clearly a no-go. Which is why, number crunching is key here, as you cover all your bases—examining the trends and condition of the new market, tracking cost patterns and making forecasts—to ensure the expansion is financially sound.
4: STUDY THE LAW
One of the biggest challenges about expanding into a new market is dealing with a different set of rules. One country’s yellow light may be a red in another. So before you venture abroad, make sure you have a good grasp of all the regulations, legal procedures and documents you need upfront, not to mention the number of funds involved. Not only will this save you from the stress and expenses of potential lawsuits, it can also help you determine the viability of an expansion. Read more about this on page 18.
5: ASSESS THE LOCAL AUTHORITY
Surely, you do not want to bring your prized company to a war zone. But even when it is not something as extreme, having a stable local government is key to your success. As you evaluate a new market, take a closer look into government-related factors, be they protection policies for businesses, assistance programs, or currency exchange rates.
6: GET HELP
Nothing makes life easier than having someone who truly understands the idiosyncrasies of your new market. Although the internet offers plenty of information, extracting the right one requires lots of time and expertise. This is why in almost all the points mentioned, it is better to seek help from local experts. Better yet, find someone who is familiar with both your original and new markets. So say you are a Swedish company looking to expand in the U.S., SACCNY would naturally be a good choice. Given our deep knowledge of both Swedish companies and the American market, we know what the U.S. market wants in terms of products and services, and can even help with matching your company with another for business partnership.
Do you need help with any of these steps?
Reach out to us at SACCNY!