Understanding the local market and competition is vital to succeed on the international stage
International expansion can be incredibly challenging for any business, whether it’s a startup or SME. Overcoming the obstacles surrounding company growth can not only create a dedicated and motivated workforce but will also strengthen your business presence in the local area.
One of the key challenges that continues to crop up when it comes to international expansion is purely to do with knowledge of the local area. Having a substantial understanding of the local market and competition is crucial, especially when it comes to foreign laws and regulations which, if ignored, can be extremely costly.
Some key laws and regulations to consider include labour, customs and employment laws, importing and exporting restrictions and regulatory requirements. Complying with these is one of the most important aspects of global expansion, especially when it comes to employees. It’s recommended that you seek experienced legal advice so nothing catches you off guard. Businesses face fines, work stoppages or lawsuits if they’re not compliant with local labour laws. Fortunately, legal support can flag potential barriers and prevent such situations occurring, so it’s crucial to have in place.
When considering the local competition, it’s also vital to realise you cannot simply replicate your current company strategy in a new market as this is unlikely to work as successfully. Often, businesses will rely heavily on tried and tested models, which ultimately lead to unrealistic expectations for the growth of your company and employees. Modify your strategy or consider creating a bespoke approach as this will ultimately enable you to gain a competitive edge in a new environment, all while utilising the local expertise of your new staff members.
A lot of startups have huge ambitions and grow rapidly once they gain traction in their home market but very often they struggle to do so beyond that because they’re exporting the same business model internationally. This demonstrates the importance of local talent and market knowledge because this is what will help build better products and services for customers.
As an example, at Hostmaker we’ve recently experienced our first non-European expansion into Bangkok. Before this, we opened in eight of Europe’s key travel hotspots, so a launch into the Asian market was a completely new experience for us. Due to my hospitality background, where I had previously worked in Dubai, I knew we had to be flexible in our approach to our business strategy and that which worked in Europe wasn’t guaranteed to work in Asia. Some business practises that were accepted and widespread across Europe did not conform to Asian standards, particularly in Bangkok, so it was key to adjust our mindset and consistently consider what was expected of us as a growing business.
Overarchingly, companies must develop, expand and grow in order to survive in today’s highly competitive business environment. Being aware of the local landscape you’re expanding into may sound elementary but it’s absolutely crucial. Expansion can appear glamorous from the outside and of course presents huge opportunities for the growth of an organisation but building deep market knowledge really is king. Showing that you have a core understanding of the key laws, regulations and local competition is just one part of a successful expansion but won’t go unnoticed and ultimately may be what enables your business to thrive.