Read the full script of Module 11, Episode 3 of the Global Growth Master Class below. Want to get certified on global expansion? Simply click here to access the complete course today.

As you learned in Module 5, our discussion of Market Accessibility Readiness, most companies approach evaluating new markets and market selection wrong. Despite it being the step in the global expansion process companies are most confident with, leaders take too simplistic of a view, often forgetting to include some of the major factors in decision-making. 3 mistakes tend to occur. 

Company leaders either:

(A) get seduced by the size of the market opportunity, whale hunting, selecting markets with the largest Total Addressable Market, TAM

(B) they focus on speed of entry and finding traction within a single market and then moving to the next market once they find a certain level of traction - which is like attempting to be successful playing a game of chess while only considering the implications of the next turn when moving a piece.

Like with chess, scaling global requires you to think a few moves ahead to be successful, considering not just one move (one market entry), but a sequence of market entries on the path to reaching global scale.

This mistake occurs because companies ask themselves the wrong question

Namely, “What market should we expand into?” - while asking yourself this question sounds logical, it leads to this erroneous thinking. Instead, you should ask yourself, “What sequence of markets should we expand into?” What should our growth pathway be?”

Asking yourself these two questions will help you think about market selection as more than just a series of market choices, but as a well-thought-out strategy that includes choosing the right sequence of markets that creates a more direct path toward global growth. 

This approach treats the expansion process as more of a muscle that the organization must develop over time and build up to, not blindly attempting to go after the largest opportunity, and it considers the concept of Linked Markets we discussed before, and how certain localizations implemented for one market can be scaled in other markets, making the market entries there faster and more effective.

The third mistake companies make: (C) is to forget two key ingredients when selecting markets, the degree of localization required to successfully reach product-market fit in a market, the amount of Localization Premium, and the level of Organizational Readiness, which we represent through the Global Readiness Score Assessment that you (and hopefully your colleagues) took in an earlier module.

To help companies avoid these mistakes and travel a more direct pathway to global scale, we have developed a framework called the Global Growth Opportunity Matrix, or G-GO Matrix which layers on multiple concepts we have discussed through this course into a holistic planning tool that helps visualize the best path and how some markets have scaleable localizations that relate to each other. 

Let’s walk through the G-GO Matrix

First, you will notice that each country is depicted with circles of varying sizes, the sizes representing the size of the market opportunity, the larger the circle, the larger the market opportunity. 

Next, you will notice the horizontal axis, Localization Complexity, which is on a scale of 1 to 30. This represents the amount of Localization Premium a company will incur by localizing for each market. Recall that the Localization Premium Analysis, LPA spider chart, had 6 different endpoints, each of the Localization Premium Categories (Marketing Premium, Sales Premium, Product Premium, Infrastructure Premium, Organizational Premium, and Administrative Premium), has a dot that ranges from 1 to 5, so there is a maximum possible Localization Premium of 30 (5 times 6 premium categories). For each country you analyze, you should calculate the Localization Premium and then place the country circle at the right point between 1 to 30.

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Next, you will notice the vertical axis, which represents the Organizational Readiness for scaling globally, which we quantify through the Global Readiness Score, which you get through taking the high-level assessment or engaging with the Global Class team to get a more in-depth Global Readiness analysis. The amount of global readiness dictates how large the Green “Readiness Zone” rectangle is with its vertical length going up to the Global Readiness Score, which is a score of 1 to 100. 

Finally, you layer all 3 of these elements together within the matrix. Instead of mapping the countries horizontally on the same plane, we place them on a diagonal line that ascends up and to the right to signify the path toward global scale. This mapping helps depict three things, first, the sequence of markets a company can target. Second, as visualized through the dotted lines connecting markets, the Linked Markets where localizations implemented in one market can be scaled to others, and third, this mapping depicts which markets fall into which of the colored boxes, Green, Yellow, or Red. 

As mentioned, the Green box is the Readiness Zone. These are markets where the organization’s level of global readiness can handle the degree of localization required to succeed in the market. The Caution Zone, represented by the Yellow box, is a middle ground where there is some level of risk that what is required to succeed in that market may be beyond what the organization is capable of accomplishing. Finally, there is the Red box, the High-Risk Zone. Markets mapped in this zone are very likely beyond the organization’s capabilities and shouldn’t be targeted.

You might be sitting there asking yourself, why did we develop this specific tool when there are so many strategy tools out there? Well, the truth is, before Global Class there weren’t any specifically with the international expansion use case in mind. 

Look at how many companies take the wrong approach, and how top consulting firms like Bain, BCG, and McKinsey, haven’t, at least to our knowledge, developed any robust methodologies for the global growth use case. In fact, in working with top companies that are expanding, we have been told that consulting firms have led them down the wrong path when deciding on new markets. 

Remember the Mercari example where executives were recommended to expand into Germany by a large consulting firm (we won’t mention the name, of course), a market they wouldn’t be able to monetize their platform because users skip by paying through PayPal instead. International expansion is not just a boardroom conversation, it's building a bridge between corporate priorities and the nuances and needs of a local market.  

You are probably asking yourself, now that I’ve mapped out all these markets, how do I increase my likelihood of success in entering the markets in the Yellow Caution Zone or Red High Risk Zone? Accessing these markets involves growing the size of your organization’s Green Readiness Zone box. 

What’s the best and only way to do this?

By increasing your organizational readiness, your Global Readiness Score. As your Global Readiness Score is higher along the vertical axis, the size of the Green box is larger, signifying you have the capabilities to succeed in entering more markets with higher Localization Complexity.

So now you can see how the G-GO Matrix brings together Market Readiness, Organizational Readiness, and Complexity Mapping into a single framework to help with market selection and developing a more structured pathway of global growth.

Now that you understand this last piece to the puzzle, let’s review how all the frameworks and tools we have used tie together as you progress through the global growth process, and how to utilize them together to be a Global Class Company.

NOTE: Don't miss out on the next episode! If you want to continue learning about global expansion strategies and dive deeper into the course material, simply click here to access Module 11, Episode 4 of the Global Growth Master Class.