International market entry as a growth opportunity and challenge
Successfully opening the doors to a new market is a challenge for any business, regardless of the size of the company or the industry in which it operates. The fact is, that entering a new market can be as challenging as starting a business from scratch.
However, expanding your business into other countries can bring stability to your firm. It is a great opportunity for growth. Once your products are well established in your home market, your consideration to offer your products in another market might be the next step. Strategically you could also opt for launching new products in your home market or adapting your existing products to new target segments. If you, however, go for market expansion, then the market entry playbook is important to you.
A market entry playbook will help you to reduce the risk of market entry and prepare you for a structured approach to entering markets that any team-member of your organization will be able to fulfill. It is the place to document your experience and further develop how you approach new markets.
We will be covering in this post the topics to consider in a good Market Entry Playbook, how to use it, and some tips for continuous improvement.
What is a Market Entry Playbook?
A market entry playbook is a strategic guide that outlines the steps and considerations for successfully entering a new market. Here are some reasons why having a market entry playbook is crucial:
- Structured Approach: A playbook provides a systematic framework, ensuring that your market entry process is well-organized and efficient. It helps you avoid haphazard decisions and minimizes risks.
- Risk Mitigation: Entering a new market involves uncertainties and risks. A playbook helps identify potential risks, assess their impact, and develop mitigation strategies. This proactive approach enhances your chances of success.
- Market Research: A playbook emphasizes thorough market research. It helps you understand the target market, customer needs, competitive landscape, regulatory environment, and cultural nuances. This knowledge informs your market entry strategy.
- Entry Modes: The playbook outlines various entry modes (e.g., exporting, joint ventures, acquisitions, etc.). It helps you choose the most suitable approach based on factors like cost, control, and market conditions.
- Resource Allocation: By defining roles, responsibilities, and resource allocation, a playbook ensures efficient utilization of resources during market entry. It prevents duplication of efforts and streamlines decision-making.
- Adaptability: Markets evolve, and unexpected challenges arise. A playbook encourages adaptability. It provides guidelines but allows flexibility to adjust strategies based on real-time feedback.
- Consistency: If your organization plans to enter multiple markets, a playbook ensures consistency across different regions. It aligns processes, branding, and messaging, maintaining a cohesive global presence.
A well-crafted market entry playbook is not a one-size-fits-all solution. It should be customized to your specific industry, company, and target market. Moreover, it should be a living document that will improve over time and include all the thinking and planning to prepare for a new market entry.
How to structure a Market Entry Playbook
A good Market Entry Playbook provides answers to the following questions:
- What should an initial landing team look like?
- When is a market considered to be ideal for market entry?
- What needs to be done before entering a market?
- What does a project plan for market entry look like?
- What should be measured so that we know everything goes well?
The playbook would be full of good practices and benchmarks from your own company. You could choose user growth after market entry, well-functioning launch campaigns, pricing model adaptations, and much more.
So your Market Entry Playbook could follow this structure:
- Market selection criteria
- Team composition for market entry
- Market entry model definition
- Calculation of a successful market entry
- Project plan for preparatory actions
- Project plan for the first 6 months (campaign plan and processes)
- Goals and comparative metrics for the first 6 months
- Risks and Mitigation
The Playbook will help you in planning resources, but it will also serve as a communication tool within the organization. Moreover, it will be your central documentation of learnings with market entries. Finally, a playbook is a good communication tool when communicating with investors who co-finance rapid growth.
With the playbook in hand, the market entry team has a manual for the ideal process of market entry. They naturally would adapt everything to local conditions where necessary.
3 Tips for Using a Market Entry Playbook
Have a look at other companies’ playbooks to learn from them
You won’t be the first to implement a playbook. Companies like AirBnB, Dropbox, Pinterest and Uber all have developed a playbook for their internationalization plans. Find a playbook of a company with a similar business model and product to get some inspiration.
One size does not fit all
There is no question that international expansion remains a challenge, even with a playbook. Despite a well-elaborated playbook, expansion into some countries may require different models than those in the created playbook. This can be due to different factors such as cultural or regulatory specifics. Thus, adaptations to individual markets become necessary.
Adapt your playbook over time
With your first international market entry, you might want to choose market entry models with lower risks for you. This allows you to explore and test markets. Subsequently, you might change your playbook to use faster market entry models that would mean more risk to you. Over time you would roll out a standard playbook for any new country.
Get your Market Entry Cheklist
Do not wait too long with the establishment of your own Market Entry Playbook. It helps to structure your market entry process and to thoroughly look at risks and how to reduce them. Download your Market Entry Checklist!