At a time when digital technology makes it possible to cross borders without even leaving the office, international development is an opportunity not to be missed. However, just because a country seems suitable for you to develop your business there doesn’t mean that it really is. In fact, depending on your situation and your objectives, you will move to different countries. We take stock of the situation to help you make your choices.
1 – Market potential, a key criterion
Before launching your product in France, you have probably carried out a market study. Well, the same applies to launching in a foreign country. The idea is therefore to analyse whether the country has presented a need that your product or service meets. This can be done in-house or by a specialist consultancy, but in any case it should give you the opportunity to determine :
- The existing market: its size, its maturity, local trends…
- The offer already on the market: the existing products, the competitors, the price level?
- Potential customers: their profile, their needs, their expectations, their obstacles…
This study will not only enable you to decide whether or not to settle in certain countries, but also to go beyond the prejudices you might have about others. It is at this stage that you will refine your strategic choices:
- Whether or not to set up in a country where the competition is already very strong;
- Propose a different offer to reach customers whose needs were not satisfied.
2 – The economic and political situation: a framework to look at closely
Examining the economic situation in the target country will allow you to visualise the trends that will support or slow down your establishment project. Among the elements to be studied in order to have a good view of the economic situation are GDP growth, population consumption and inflation.
At the same time, it is essential to take into account the political climate of the country in question. Conflicts in the country are a problem, but you should also bear in mind the potential corruption of the public authorities, which could prove a real difficulty for the development of your business.
Studies to better identify risks
A few studies can help you gather important information to assess a country’s potential and the risks of settling there. These include Doing Business, Best Countries for Business and the GEDI (Global Entrepreneurship and Development Institute) ranking. The JIIC country fact sheets can also be very good resources.
3 – The cultural and legislative framework, sometimes a brake on exports
In some countries, the legislation in force can be a real brake on the development of certain products or services. Before attempting to integrate the market of a foreign country, it is therefore essential to find out about the regulations and standards in place. For example, while some countries voluntarily apply high taxes on foreign companies, others provide aid to encourage foreign companies to set up in their country.
On the other hand, cultural accessibility is a point not to be neglected. Indeed, each country has its own customs and certain cultural limits that should not be crossed. For example, while some countries are very tolerant of references to sexuality in particular, in others this can be shocking. So before you start, there are a few questions to ask yourself:
- Are there barriers in this country linked to culture, religion, consumer habits…?
- Is English acceptable as a language of communication? Will the language barrier be a hindrance?
- Is it necessary to have a local network to give credibility to the company?
Border countries, a good first experience
For a French company starting out in the export field, starting with one or more border countries can be a good solution. Indeed, they have a culture quite similar to ours and are also subject to European Union regulations. So it’s a good first step to get your hands on exporting.
4 – Time-to-market, or how not to miss out on a niche market
Time-to-market is an extremely important concept in product launches. It is about getting the right product on the market at the right time: because entering a new market with a product that is already outdated or too innovative is not the best way to get started. Thus, after having gone through the 3 previous points, you should be able to determine whether the target country is ready to receive your product, whether it is too early or too late.
Good time-to-market management is an essential point mainly for the most innovative sectors of activity, such as new technologies or certain branches of industry. Good quality monitoring is therefore essential to ensure that you do not miss any opportunities in your target country.
You now know how to identify countries that represent real opportunities for your company. You have also understood that it is important not to have preconceived ideas, but to be both patient and responsive to situations. With a good market analysis, your integration in the target market should be done in the best conditions.
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