Research. Research. Then research again. When looking to go global, those companies that have left no stone unturned have the best chance for success in international markets.
Starting your research can begin online, with EDC and the Trade Commissioner Service (TCS) offering excellent resources for Canadian exporters in the early stages of researching potential markets. EDC’s Market Entry Advisors can also connect you to in-country experts who can help you navigate the local business environment.
Once you’ve narrowed your research down to a short list of potential markets, there are other key elements of market intelligence to consider ensuring you can successfully enter a market and develop a global competitive advantage.
1. Internal company analysis
Internal analysis is the starting point for any company looking to go global. Identification of your company’s strengths and weaknesses, how they can be improved upon, and financial resources available for business development are key considerations. Most importantly, do you see a specific market niche that your company can fill in the market?
2. Markets with Free Trade Agreements (FTAs)
Canada has several FTAs with countries/regions around the world. In these markets, your company will be on a level playing field with local businesses and have a competitive advantage over competitors hailing from countries that don’t share an FTA with the local market. Global Affairs Canada has a list of Canada’s FTAs found here.
3. Importance of Market Potential
Is your product or service unique? Is there demand for it in the market of opportunity? What has been the industry trend in your sector of interest the past couple of years? Has the industry been growing and what’s the outlook for the future?
4. Customer Demographics Data
Who is your customer and more importantly, does your product or service offer a solution to a challenge he or she is facing? If it does, you have the foundation for creating a unique value proposition (UVP) in the market and a good chance at being successful.
Once you’ve figured out who your customers are, it’s crucial to research and understand who your competition is and how you stack up. Are you doing the same things they are? Is price the only differentiator, or are there other ways you’re different? Companies who base their export plans solely on price differentiation are less likely to be successful than those who have developed a UVP and, as a result, a global competitive advantage (GCA).
How easy is it to get your product to market and what will it cost? Where is the port of entry in relation to your major customer base? How will your product or service be marketed once there? What potential partnerships – distribution, marketing, agents – will you need to successfully operate in the market?
7. Regulatory Environment
Are there tariff barriers that you may face? What about non-tariff barriers like punitive government policies or slow bureaucracy? Are there different customs and language considerations that could pose challenges when trying to successfully navigate the market?
Alternatively, are there specific government incentives for international companies to enter the market?
8. Corruption/Political Stability
How stable is the political regime in the target market? Has there been a history of corruption? What threats does this pose to conducting business in the market? TRACE International has a Bribery Risk Matrix that measures the bribery risk in more than 200 countries.