A Simple Way to Think about International Market Selection

There are many models for thinking about international market selection as part of your broader international expansion strategy. One of my favorites is simple and looks at just two factors: 1) the size of a market (opportunity) and 2) the complexity of the market (how difficult it will be to address).

To help visualize this, I’ve created a 2×2 matrix version, envisioned from the perspective of a US-based company, plotting the top 15 world economies onto a matrix.

On the vertical axis, countries are ranked in terms of the size of their economy in terms of gross domestic product (GDP). The vertical axis indicates market size. The bigger the flag bubble, the bigger the market too.

On the horizontal axis, the top economies are ranked in terms of their complexity, from low to high, from the perspective of a company based in the United States, where English is spoken. As you’ll note, the most complex markets for a US-based company to target are all on the right side of the chart. All of these are emerging markets, which are notoriously hard for Western companies to understand. But all of them are also non-English markets too, which factors into complexity to a degree.

The easiest markets to go into, from a US company’s perspective, are ones that are English-speaking, but also developed markets. The only developed market that veers more into the high-complexity side of the graph is Japan. Korea is in a similar position to Japan on this matrix, albeit a smaller economy than Japan. But most of the rest of the “difficult” countries are on the right-hand side with the “easier” ones on the left.

Why are emerging markets so complex? And why does this matter for market selection? If you’re operating from the typical perspective of a company that was created in the United States, everything you’ve done life to date to build your business creating product-market fit has been for, well, that one market. Yes, this will give you overlap with other markets, especially English-speaking ones with cultural similarities. But if you want to start addressing new markets, you have to establish product-market fit with each of them.

Achieving product-market fit with markets that are similar to your home one, where you already have product-market fit, is usually a lot easier than trying to bridge the gap between your current product and a market that’s very different from your own. That doesn’t mean it can’t or shouldn’t be done. It just means it’s not typically as frictionless, or as fast, as growing international revenue via easier markets.

This model is simply a clear way of looking at top markets so that you can ask yourself whether it’s easier to achieve your next big growth goals by leaning into bigger but more complex markets, or into smaller but less complex ones. While it has its limitations, it’s useful for boiling down market selection for an audience who requires an executive summary. For a more detailed market selection strategy, take a look at these recommended additional international expansion data sources.

Nataly Kelly

Nataly is vice president of international operations and strategy at HubSpot and has previously held diverse roles leading marketing, research, product development, and localization. She writes for Harvard Business Review on topics of international marketing and business. Nataly grew up in rural Illinois, lives in Boston, and has visited 57 countries (so far).

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