Many companies underestimate how hard it is to break into a new market. If you want to “go big” in a new country, it takes a lot more than just adding a new language or hiring a salesperson in a new market if you want to be successful in the long term. Don’t be caught by surprise! Here are 141 of the top questions you’ll need to ask in order to develop better market entry strategies, broken into a few key phases.
Conduct Market Research
This is the phase that many companies skip, but it’s actually the single most important area of work you can do to ensure long-term success. Here are some of the basic questions you’ll need to ask at this phase, not only to determine if you want to move forward, but to ensure you make the right decisions in every step that follows:
- How many buyers are there for our products / services in this country?
- How much will they be willing to pay for our products / services?
- Do they already pay for our products / services from another company?
- If so, what do they usually pay, and what is included?
- What are the companies they buy from?
- How big are those companies and how many customers do they have?
- Are those companies global players or local ones?
- How do what competitor offerings differ from ours?
- What is the size of the market in terms of TAM, PAM, SAM & SOM?
- How experienced is the buyer of our offering in this market?
- Are we building this market from scratch, or did someone else already do market development for our category?
- Is our brand known, at all, in this market?
- If so, what % of potential customers have heard of us?
- What do buyers of our products / services in this country think of our offering?
- What do they think of our brand, if we are known?
- What aspects of our products / services are most and least appealing?
- What gaps are there in our offering, if any, to make it locally compelling?
- What would people pay more for in this market?
- What are we offering that isn’t locally relevant in this market?
- How do the titles of buyers and decision-makers differ in this market?
- Who is involved in the decision-marketing process?
- Which industries do the target customers work in?
- What are the local industry classification codes they are registered in?
- What data enrichment sources exist in this country?
- Do we have any marquee customers in this country?
- If not, which ones have strong power to influence in this country?
- How do buyers find out about companies that offer what we are selling?
- What industry associations and groups do they belong to?
- What blogs, newsletters, and other media do they read?
- How do buyers in this country make purchasing decisions?
- What are their preferred sales channels?
- Who is involved in making the decision?
- What does their procurement process usually entail?
- How long does it take to make a purchasing decision, on average, for our category?
- What vendors of services and products in aligned categories to ours do they typically use?
- What are the blockers to choosing a new offering like ours?
- What are the situations that can accelerate moving to an offering like ours?
- Are there any important local trends impacting the need for our offering?
- What is the availability of local talent in this market?
- What is the cost of local talent?
- What is the cost of real estate?
- How stable is the country politically?
- How stable is the country economically?
- What is the general level of public safety?
- What is the level of language proficiency locally of the language of our home market?
- What are the cultural differences we need to be aware of?
- How easy is it to do business?
- What other factors might impact our success in this market?
- What does the local government offer in order to support us in this market?
- What types of services does the dedicated development authority provide?
- Are there any local tax credits or incentives we could qualify for if we set up an office locally?
- What are the local tax requirements?
- Do our existing service providers / vendors offer support in this country?
- Do we have any partnerships with companies that operate in this country?
- Will be able to obtain the essential trademarks, domain names, and other branded properties with our brand name?
- Do we know if our brand name means something else in the local market / language, or has any negative connotations?
- What % of customers are willing to pay in our currency versus the local currency?
- Does the customer have to pay any local taxes or penalties if they pay in a foreign currency?
- What is the foreign exchange rate trajectory?
Craft Your Strategy
Once you have done the basic market research, it’s time to formulate a strategy. To do this, your strategy will need to answer the following questions:
- What is our ultimate goal in expanding into this market? (Common examples might include: to continue to accelerate the company’s growth rate; a land grab to prevent against competitors capturing market share; to have a local cost basis in a market as a hedging strategy; to take advantage of existing market demand signals; to reduce costs by setting up an office in a low-cost market, and so on).
- What is the best way for us to go to market in this country? (For example: product-led growth, freemium self-service offering, build a direct sales channel, engage with resellers, acquire local companies, and so on).
- What will our success criteria be in 1 year, 3 years, and 5 years? (These will relate to the first question, but should be high-level goals).
- What other companies have attempted a similar strategy outside of our industry? (Document the lessons learned, especially failures and best practices).
- What other companies have attempted a similar strategy within our industry? (Pay close attention to what competitors or companies in aligned categories).
- What other companies have attempted different strategies, and why are we ruling those out?
- How will our strategy differentiate us from local and global competitors?
- What are the benefits of this strategy compared to others?
- What are the risks of this strategy compared to others?
- How do we plan to mitigate the risks?
- How do other companies that operate there mitigate the risks?
- What will our competitive positioning be, to ensure we stand out?
Build Your Plan
Now that you have done market research and developed a market entry strategy, you’re ready to create a true plan for entering the market. Your plan should include the following:
- Who will run the overall launch process? (Depending on the scope of your launch, this will ideally be someone in a cross-functional role who has good relationships with all functional leaders, and who is familiar enough with all parts of your business, to manage all of the steps listed below, such as an MBA or a person with past international operations experience.)
- What are the financial targets we aim to hit in Year 1, Year 3, and Year 5?
- What will we need to invest in order to achieve those targets?
- How many people will we need to hire, and in which roles?
- Will we hire locally or outside the local market?
- Will we handle recruitment ourselves or through a third party?
- Will we set up a local entity, or will we go through a professional employment organization (PEO)? (Most of the steps that follow apply to companies that set up a local entity).
- What does our overall timeline look like for completing the local office launch process?
- Will we pre-announce the office, and if so when within our timeline?
- How will the development authority support us?
- What does the general headcount growth plan look like each year for the next 5 years?
- Who will be our global or local employee benefits provider?
- Which local counsel will we work with to support us on all legal matters, starting with entity set-up?
- Where will we set up a local bank account?
- Who will handle local payroll?
- Who will handle local taxes?
- Who will handle the employment contract steps?
- Will we be adding the local currency?
- Who will support us changing our legal contracts to reflect local laws?
- Will we need to translate key legal documents, such as employment contracts and terms of service, into the local language?
- What changes will we need to make on systems and infrastructure side?
- How will sales territories be re-mapped to accommodate the new local market and new salespeople?
- Will the new office require changes to our data architecture?
- Will the new office require changes to our data storage and transfer processes?
- What changes do we need to make on the invoicing and billing side?
- Who will handle facilities, finding a local office, security/access, and coordinating for the build-out?
- Who will handle local IT matters in the same time zone?
- Will we be localizing our products/services/website in time for the launch, and if so when?
- How many people will need to be hired by the time of the office launch?
- What does the local recruiting timeline typically look like, including how much notice is customary, and how will it affect the overall launch process?
- What advantages can we offer in the new market as an employer brand?
- Will there be a local office launch event, and if so, who will coordinate it?
- Who will be our local office leader (general manager)?
- Will we send any ex-pat employees from our HQ country to the local country?
- If so, what are the visa requirements, tax requirements, and other implications for the ex-pats?
- How long will the ex-pats stay and what will the hand-off process be for local leadership?
- How often will key executives visit the local office?
- How will local employees engage with the HQ office?
- How and where will we train new hires?
- What does the financial plan look like, including all estimated costs of salaries, facilities, third party costs, legal costs, and estimated quarterization?
- What is our plan for generating brand awareness?
- What are the targets for the sales team to hit?
- What are the related lead flow targets for marketing to hit?
- By when will we have to hire each new headcount in order to ensure we minimize risk to the financial plan?
- What is the estimated “time to payback” on the initial investment?
Focus on Executing
If you plan thoroughly ahead of time, executing should be the easy part. That’s why it’s so important not to rush through the other phases above! If you do, it will usually show and come back to bite you. However, no matter how well you plan things when you launch a new office, many things can actually go wrong during the execution phase. Often, none of those will be your fault, but you have to be aware of what blockers can fall on your path. Here are some questions you can ask to ensure you have a better chance at strong execution of your plan:
- How will we ensure ongoing communication between the new local hires and HQ?
- Who will support them, and will the reporting structure be local or international?
- How else can we make sure they stay connected to and participate in our corporate culture?
- What will we do if some of the new hires in the local office do not work out?
- Do we have a clear plan for what to do in the event of local political unrest, a natural disaster, or some other unexpected events that could derail our operations?
- What if the ex-pats we chose need to return to their home country for some unforeseen reason?
- Do we have all of the target metrics broken down into monthly goals for Year 1?
- How will we ensure that we have a clear local view of all core metrics that matter companywide for this market?
- What are the leading indicators that we will not be able to deliver on our plan?
- What do we do (back-up plan) if we see early warning signs that we will not succeed?
- What is our risk mitigation strategy if we do not hit our targets?
- What is the tolerable margin of error on our core target metrics?
- What payback period would we consider a success?
- Do we have the cash flow to continue funding the local operations if we don’t succeed?
- If so, for how long?
- What would be the conditions under which we would decide to pull out of the market?
- How nimble can we be to re-adjust the plan with minimal impact?
Learn and Optimize
After you’ve launched your local presence in a given market, it’s important to keep iterating and improving. As you start to see initial success, here are some questions you can ask in order to further optimize your local market presence:
- How will we set up an international steering group to ensure all core functions are involved in the success of this market?
- What structures and processes do we have in place to continually spot trends in our data for this market versus others?
- How will we measure success for this market differently from our other markets?
- How will we ensure “fast feedback” for the local market leaders, in their time zone?
- How will we enable cross-functional support for this market?
- How will we ensure continued visits to HQ for local employees, and vice versa?
- How will we ensure executives continue to visit the local market also?
- What do our customers say in this market, as opposed to one we don’t fully support, about their local experience?
From Market Entry Strategies to Local Market Success
As you can see, there’s a lot that goes into launching in a new market, especially if you want to create a local entity. However, the good thing is, once you’ve done this a few times, you can develop a very clear playbook with a timeline that works for your company. This list of questions is general, not industry-specific, but there will be many other questions you’ll need to ask and items to incorporate depending on the industry you’re in and how your business operates today.
Most importantly, you’ll need to hire someone who can run this process and keep a close eye on the huge number of interdependent steps that take place concurrently. Having run office launch processes for offices in Asia, Europe, and Latin America, I can tell you that it’s no small undertaking! It requires a lot of work from all teams, especially the core operational folks. Many things can go wrong along the way that are completely out of your control. It’s even harder if you’re running more than one process at a time.
For example, if the local government delays your entity application process, your entire launch timeline could be at risk! That could actually prevent you from hitting your financial targets and hitting certain windows for the outlay of expenses, which can have global impact on your financial plan. This is why it’s critical to have local legal support who can advise you on the best timeline range for planning, although they too can be surprised sometimes. You just never know what surprise might await when you’re dealing with setting up an office in a new country. Often, you’ll have sales targets in your plan that are built around specific start dates, and you can’t actually hire employees until you have an entity, benefits, and payroll set up. This can mean that a single delay, early on in the process, can derail many of your plans and cause you to incur huge costs that you would have liked to avoid.
However, once you have set up a local market presence, and especially if you run a launch process, you may have the incredible joy of getting to see it blossom and grow into hundreds or even thousands of employees someday, and knowing that you played a key role in laying the foundation for it to happen. You’ll go from trying to convince employees to visit the new office in the early days to seeing regular exchanges between people in that office and your HQ location.
Along the way, you’ll get to witness an amazing evolution, from where your local office was basically just a plan and a timeline in your head (or in a spreadsheet), to a team of talented colleagues on the ground who understand both your company and the local market. Your local founding team will build out a full set of people who are generating revenue, relationships, and value for your company, both connected to global goals and autonomously empowered in their local market. You’ll see it go from a twinkle in your eye to a constellation that shines brightly on its own.
And that, in spite of all the hard work, is a truly beautiful sight (and site) to behold.