What Is the Recipe for Success?

“Two footsteps do not make a path.”

Nnedi Okorafor

In a recent dialogue with a European business looking to enter the US market, we reviewed the different options available. Some of the low-cost options seemed more like dipping a toe or baby steps and anything but a deliberate and purposeful market entry.

So, what is the best way to enter a new market?

Dawn Bevier writes: “We are often warned when facing decisions or milestones to simply "dip our toes in the water." Many times, we follow this seemingly solid advice, saying to ourselves, "It's such a small step. What can it hurt?" Small choices are safe, we say to ourselves.”

J.R. Garrett provides the counterpoint relative to starting a new business: “The pros of diving right in are largely centered on the forward progress and momentum that come with tackling your idea head-on. Being able to focus solely on your idea can create movement quickly. According to The Startup Genome Project, founders that don't work full-time on their startup have four times less user growth and end up raising 24 times less money from investors. Putting all of your efforts into your startup gives you a strong chance for success.”

Whichever path you choose, there are always those fundamentals that need to be addressed first: e.g., define the problem you are solving, research that it is relevant to potential clients, understand the competitive situation, define your messaging, … In short, do your due diligence, your homework. Once you have put a checkmark on those, success often is the result of focus and momentum, making mistakes and adjusting, and the right scaling.

Scaling is a strong factor in a successful new market entry strategy. 65 percent of all startups fail because of premature scaling. If you don’t have a strategy in place that allows you to scale effectively, you’ll quickly become overwhelmed and have to backtrack.

In order to avoid this, make sure that you have a solid plan in place that helps you move forward with your goals and predictions without risking surprises that could put your business out of business or harm your reputation.

Start by forming partnerships or collaborations with local companies or individuals. This will give you access to existing infrastructure and market know-how that will better enable you to scale.

The choice of entry mode in foreign markets is an important strategic decision with major consequences for success. It is generally accepted that firms choose relatively low-commitment entry modes to operate in foreign markets. Nevertheless, there are insights on antecedents of international new ventures’ choice of higher commitment entry modes in foreign markets.

The results of this work encourage international entrepreneurs to look beyond the explicit value of experiential market knowledge to realize the potential value of global market orientation as an antecedent to higher commitment entry modes. The model proposes a positive effect of entrepreneurial orientation and early international entry on international market orientation, which, in turn, is positively related to higher commitment entry modes. 

It's important to remember that succeeding internationally takes the same level of devotion as it did when your company was first starting out and building its core business. If your organization takes this same zeal and attitude into new markets and be willing to adopt the market's requirements to meet a particular need, success is imminent.

Contact us to find out how a fractional commercial leader may just be the right step to expand into new markets.

__________________

Dawn Bevier - The Dangers of Dipping Your Toes

J.R. Garrett - Diving in vs. dipping your toe: How do you tackle your business idea?

BusinessBlogs - Dipping Your Toe in the International Business Pool

Multiple Authors - Higher Commitment Entry Modes in International New Ventures: The Influence of Strategical Orientations

Photo by Anne Gosewehr