Read the full script of Module 5, Episode 1 of the Global Growth Master Class below. Want to get certified on global expansion? Simply click here to access the complete course today.

After determining that your company is well-positioned and resource-ready for international growth (the process we have referred to as Organizational Readiness), the next step is to enter an information-gathering phase with the goal of figuring out where to expand. 

This involves a two-step market analysis process, one conducted at headquarters and the other undertaken by traveling to the target country and conducting on-the-ground research. The byproduct is a well-rounded evaluation of target countries (including a ranked list if you are deciding between multiple options). 

The final aspect of the market readiness step is to establish a preliminary indication of the localizations (or pivots from your initial market product-market fit) necessary to get traction in the new market.

Of all aspects of global growth, international market evaluation and selection are the most accessible and familiar. It is in these steps that the most structured and generally accepted criteria exist, compared to the other aspects we discuss in our video library, including localization, team building, and building structures to support global scale. 

It is most similar to the process a company goes through when evaluating its initial market, and it relies on commonly tracked data - from economic indicators to population indicators. You are likely familiar with the core criteria to evaluate market opportunity - Total Addressable Market (or TAM) calculations, population growth, GDP, and per capita income - and comfortable making decisions based on this data.

Because of this familiarity with market evaluation, and because of the UNIQUE ways companies tend to conduct their assessments, we are taking a DIFFERENT approach by adding a little bit of STRUCTURE to this process in the coming modules. 

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We have found that organizational readiness and validating your business model in new markets (localization processes discussed in forthcoming modules) are DIFFICULT for many companies because due to the lack of STRUCTURE and layers of COMPLEXITY associated with each of these essential steps. 

Instead of detailing an exhaustive list of criteria to evaluate each market by, we approach the topic from a different angle, helping you think outside the box when selecting which markets to target.

In this module, you will learn best practices for evaluating potential international markets and making decisions on the markets to enter. You will learn about the mistakes many companies make in market selection and how to avoid them. You will also learn about Localization Discovery, a key step in the Global Agile methodology that we will discuss in great detail in the next module. 

The goal of this step is to create a prioritized list of countries to expand to and an outline of estimates of the key changes that need to be made in your current model (localizations) to find traction in each new market.

What questions will this module answer?

• What are things I definitely shouldn’t do when evaluating and selecting new international markets? 

• What are things I should absolutely do when evaluating and selecting new international markets?

• What should I do in-market to evaluate a potential new market?

   

Why does what is discussed in this module matter? 

When selecting markets to expand into, companies hire an OVERPRICED consulting firm, to tell them where to expand, getting advice that often DOESN’T provide a full picture of the RISKS and OPPORTUNITIES of entering that market. 

OR, they will over-value the WRONG criteria, choosing a market for a variety of reasons, from it being a country a company executive studied abroad in, to following organic growth, NOT UNDERSTANDING that the needs of those customers aren’t representative of the whole local market.

While there are MANY mistakes that can be made in the market selection process, our research pointed to THREE costly ones that were CONSISTENTLY made

The FIRST is what we refer to as the “FAMILIARITY BIAS.” 

Companies will decide to enter a market based on whether the same language from the initial market is spoken there, OR because of geographic proximity. 

What that means for many American companies, for example, is they say, (w/personality) “Let’s go to the UK, Australia, and Canada because they all speak English there.” This ignores many of the changes a company may need to make to effectively enter and gain traction in these markets. 

For companies based in Latin America, this often means choosing other LATAM markets (or Spain) because of geographic proximity or because of SPANISH in these markets. 

The second mistake is what we sometimes refer to as “whale hunting.” This refers to how many companies will target the largest markets first, often ignoring that entering these markets requires a great deal of localization and adaptation from the proven model in the initial market. 

This regularly happens with both the US and China. Many companies who are successful in one of those countries will attempt to expand to the other early in their global growth journeys. 

Because of the vast differences in culture, government regulation, privacy, and operating models, many companies attempting to make this leap FAIL

At the time of recording, there are very few companies that have been able to bridge the gap to be successful in both markets. ONE success story is TikTok and the OTHER is Starbucks. 

Companies from Western Countries often target China because of the size of its population thereby garnering a large TAM. Many companies from Asia, Latin America, or Europe will prioritize the US market because of it’s market size, investor ecosystem, and beyond. 

This can be a recipe for disaster and companies failing time and time again illustrating how shooting just for the largest markets and ignoring cultural elements and how extreme the localization needs to be to succeed in the new market can be.

The third mistake is not actually spending adequate time in the market before making a decision to enter the market - and this goes for not only members of the international team but top company executives as well. It’s important key stakeholders see and understand local nuances and experience why certain changes to the company’s go-to-market and operational strategies must change to have successful market entry and growth.

What risks exist if you aren’t mindful of this aspect of global growth?

While there are a number of risks that exist when approaching market evaluation and market selection the wrong way, one of the PRIMARY RISKS is not fully understanding a market when deciding to enter the market (or in other words the required changes to the existing model needed to SUCCEED in that market). 

This can come from using the wrong, or incomplete CRITERIA, it can come from not visiting the market enough to EXPERIENCE some of the insights around how the market is different, first-hand, and more.

After you complete this module you will be able to confidently choose the right international markets to enter, speak to the right stakeholders in the market, and gather the right insights to know the likely localizations required to succeed in the market.

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 5, Episode 2 of the Global Growth Master Class.