When expanding internationally, there are a variety of ways to enter a new market. Basically, you have three options; you can decide to trade, collaborate, or create.
Exporting is typically the cheapest and lowest risk way to enter a new market. You don’t build a local presence in the new market, and you manage things from your home country. To sell and distribute your products or service, you can work with sales agents or local distributors.
There are different ways to collaborate with partners structurally. You can set up a franchise, license, subcontract, or build a strategic partnership with a local player. Collaborating with a local partner can be a great way to learn about the new market and quickly gain traction if done right.
You create a new venture through a merger or acquisition, set up a joint venture, or establish a new business, also known as greenfield ventures.
The more you move to the right on the above chart, the more you need to invest and take risks. However, it also means that you are showing a higher commitment to the new market. In my newsletter 'The Power of Commitment' you can read how showing commitment can open doors, build trust, and attract many good things to your business.
Choosing the right entry mode is not easy, and there are many things you need to take into consideration. Together with Floor Bergshoeff from TABS, I am organizing a roundtable series, during which you will discuss with like-minded entrepreneurs what your options are to enter a new market and if setting up a local entity is the right choice for you. This is a free event, but only eight spots are available per industry (Hardware, Services, and Software). If you want to attend, send me an email firstname.lastname@example.org . More info