In the brief period since my last post, levels of global uncertainty have continued to increase together with the likelihood of a tariff war. It may therefore seem counter intuitive to consider expanding into new markets. But there is a persuasive case for considering such an approach. Crucially, it enables businesses to diversify their revenue. Relying on a single or small group of markets can be risky. Expanding to new markets helps reduce dependence on any one economy, which is important in uncertain times. This leads to improved business resilience.
When the domestic economy faces slow growth, inflation, or recession, exporting can provide access to markets that are still thriving Moreover, if the domestic market becomes oversaturated, competition can become intense. Exporting can provide access to markets where demand for your products or services is higher and competition may be lower. This can be particularly true of emerging markets where, while the risks may be higher, there are often opportunities to tap into rising domestic demand and high rewards.
It is worth remembering too that most governments provide advice and support to help companies that are considering entering new markets. Much has already been written on the importance of good market research, developing a clear market entry strategy and export plan and understanding the logistics of exporting.
However, I would highlight the importance of strong partnerships. Collaborating with local distributors, agents, or joint venture partners can ease market entry. These partnerships help SMEs navigate local business practices, cultural nuances, and regulatory requirements. Choosing reliable and experienced partners is crucial for long-term success. Verificators offers a full range of services to enable due diligence on potential partners both here and overseas.
Let me briefly introduce a final topic: business diplomacy. This involves the positive engagement of executives with a range of political, economic, and social entities (including NGOs ) both domestically and in other countries. The goal is to identify, create, and leverage new business opportunities; prevent potential conflicts with stakeholders and minimize political risk; and utilise all available channels, including media, to build and protect the image and reputation of a company operating at home and abroad. Most companies have reasonably strong networks in their home market. It is important to develop similar networks overseas. I will talk more about this in my next post.
Author: Robin Barnett – Strategy and Business Intelligence Adviser
