European
Expansion

A lucrative way to achieving growth is to expand towards new geographical markets. This expansion requires organisations to adopt a new operational mind-set, knowing that the current product/market fit, go-to-market strategy and customer journey may well need revisiting to accommodate the new local market.

And if this is your first expansion towards a market with different language, time-zone and/or culture, your organisational structure will have to meet supporting the diversity of these new markets.

Diversity is undeniably real

The first step for any company expanding internationally is to recognise that each new market will in some degree differ from its current. Ignoring that fact, and not making a vital proper analysis, a company may end up substantially investing in a market with an unexpected low return.

Typically, the more specific your offering is and the smaller-sized your target prospects are, the more effect diversity will have on your existing operations. These SMB do tend to buy local, in their own language, expect local support, etc… A market study will indeed demonstrate revenue potential and best customer approaches/processes, both from a product/market and operational standpoint.

A same product for a different market

Once established if a new market holds enough potential to consider entering, a first approach should be to understand the local buyer personas:

  • Will a product still perfectly fit the needs of a same target audience?
  • Is a company prepared to [slightly] alter its product to fit that new market?
  • Will the existing go-to-market strategy still work?
  • Observing local early adoption, can a same customer journey be expected?

While this may seem as a long stretching entry-procedure, companies should realise they are better off investing properly in market research, than to waste time and resources entering a market not fit.

Centralised vs Decentralised

Coming from operating in a country-centric home market, first-time expanding companies tend to keep a centralised organisational structure.

“Our first sales guy in London will report to and follow procedures from his HQ-based VP Sales…marketing and support resources will be shared at HQ’s…budgets from one global P&L…”.

The big problem to this approach is inherently the lack of focus and dedicated support. Companies are generally better off waiting…until budgets allow for building regional teams with dedicated resources, with local customer-facing processes and autonomous decision-making. HQ’s role is primarily to build bridges between their geographical teams to monitor, compare, share and mentor best-practices, while allowing for operational diversity.

“Si fueris Rōmae, Rōmānō vīvitō mōre”
(When in Rome, do as the Romans do)

Aurelius Ambrosius,
Archbishop Milan, 374AD

Follow the locals

One way companies can see how their offer will impact on a local market, is to find and assess a local competitor or model partner. In many cases, there may also be a strong start-up community and/or a consulate with local-economy expertise present that will provide guidance about the specific do’s and don’ts of their market.

Remuneration that fit the talent

Another important aspect of a market analysis is to understand the local remuneration habits. A company choosing to ignore how the market rewards its workers while following its own HQ-policies, may find itself incapable of finding great talent, not optimising social security and taxes or simply paying too much…

Partners vs [virtual] office

Some companies opt to expand geographically by cooperating with local partners. While these partners potentially could bring value to the table in terms of market knowledge, co-marketing and co-sales activity, 1st line support, they will do so following foremost their own agenda, not necessarily the vendor’s. 

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