Five Strategies for Businesses Entering a New Market

Exploring a new market, especially one that has strict rules and regulations, is a very challenging task. Growing businesses have an aim of going international, but are not quite sure where to start their journey from.

We understand that breaking your way into a foreign market can be difficult. Hence, here are five strategies that can help your business achieve success overseas.

These strategies will help you establish a strong foothold in a new country. Below there is a list of five strategies that will help your business while entering a new market. Choose the one most suitable for your business. We hope that after reading this you will surely know where to start from.

Strategy 1: Franchising Your Brand

One of the most effective strategies for any business deciding to expand overseas is to transform into a franchise. In case you are not familiar with franchising, here’s how it works.

  • Start by creating a successful brand identity
  • You then let young entrepreneurs or well-established business owners open their own branch of your brand (which is known as a franchise).
  • Your recruited franchisees pay you the decided fees and sometimes even a cut of the profits per year. The remaining amount is kept by them.

The single most benefit of turning your business into a franchise is that it is one of the simplest ways to enter a new market. All it requires is for you take your existing business model, find a worthy franchisee in your intended market, let them build your franchise there and open your doors to the intended audience.

The only disadvantage of franchising is that you as a franchisor have to always compromise. Financially speaking, the majority amount of profits is kept by the franchisees.

You can target any foreign market when setting up your franchise, but you need to have a strong brand identity in that country. Otherwise, you will end up being just another business on the side of the street.

However, there are several businesses that have gained popularity despite having zero brand identity in the new market. What business needs to know is that franchising is a suitable strategy for certain businesses.

Strategy 2: Direct Exporting

Direct exporting is one of the most common strategies on this list. First thing first, direct exporting is very simple. You sell directly into the market which you are trying to break in.

Consider this example, if you wish to sell your goods and services in Japan, you get your product and services in appropriate Japanese stores and see how it performs in the market.

The people you know through direct exporting are the agents and distributors. These people are the link between the stores and you. You will not be able to establish a strong foothold in the new market all by yourself. For this purpose, you need reliable agents and distributors to explain you the new market you are entering in.

With the agents and distributors by your side, it becomes easy to establish a foothold as they have most of the contacts that you need to succeed in the new market.

However, it is your duty to work out shipping logistics and everything else related to it. Overall, direct exporting is similar to selling the products and services in your local market.

Strategy 3: Partnering Up

If you go to see, partnering itself is a complete vague term. It can mean anything. You can either partner up with a company in a foreign country which simply helps you in marketing (which receives a deserving cut from your profits) or you can get a partner company in a foreign country who is just as invested in all facets of your business as you are.

But partnering up is another big strategy for business looking to enter a new market. But before you finalise your partners, ensure that you are doing business with someone who is willingly ready to help you and not slow your business activities down.

Once you find a worthy partner, it becomes easy to get a strong foothold in the new market, especially when your partner is familiar with the new market you decide to establish your business in.

In some countries (most Asian countries), partnership is a borderline necessity. It is difficult for a foreign business to establish a foothold without a partnership. They need a partner in each industrial market they wish to enter which would help them get through the rules and regulations and establish their strong presence in the market.

Strategy 4: Joint Ventures

A joint venture is a partnership between two companies or people. They join together to invest in a business project. Usually, the investment is equal (50-50) and the profits made are split among the two equally.

The two companies that invest function independently in their own fields. But they tend to work together on a particular business project or venture and try to succeed in it.

Although the initial investment is equal, with the course of time, both the companies need to keep investing for the success of your venture. Having to run your own business along with a joint venture can disrupt your cash flow management.

You may start to face cash flow issues and find it difficult to invest in your joint venture or run your own company effectively. Hence, to be on the safer side, cash flow finance is a funding solution that helps companies in need of extra cash or the companies facing cash flow issues.

Seek more information on this funding solution and many other from your finance advisor and choose the one suitable for your business.

Strategy 5: Just buying A Company

Buying an entirely new company in you intended market is by far the easiest way to enter it. Here are some advantages it offers:

  • You can immediately claim the market shares
  • You have a well-established customer base and a brand identity
  • Although the government there has imposed new regulation on the newcomers in that industry, you can easily bypass them. Moreover, these imposed rules and regulation provide you a competitive edge in the new market.
  • The government there treats you as a local firm in most scenarios, especially when it comes to licensing and more.

However, buying a new company altogether has its own downfalls as well.

  • This will be another company that you will be operating separate from your own brand. Also, your operations in the new market will be a little different from the rest of your brand’s image.
  • It can be very expensive, especially when the company you intend to buy is thriving.


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