Domestic markets are always changing, and sometimes you have to look beyond international borders to find new business opportunities. But doing business in another market (even the U.S.) is always different from doing business in Canada, possibly requiring a change in competitive approach or value proposition. Here’s how solid research helped two companies make the leap to a new market and succeed.
New market puts more business in the pipeline for Automatic Coating Ltd.
Jocelyn Bamford not only took a crash course in the importance of market research, she believes she earned a graduate degree from the school of necessity during the Great Recession.
The Vice-President of Toronto’s Automatic Coating Ltd. (ACL) saw a lot of business evaporate virtually overnight at the peak of the recession in 2008. The family-run powder coating company lost much of its core clientele of metal fabricators, many of whom moved offshore. One of its largest customers relocated to Mexico, which took away approximately $1 million in annual revenues from ACL.
“We had to reinvent ourselves and fast,” says Bamford, who operates the company with husband Brad. “That included looking at markets out of necessity.”
Dealing in U.S. market not the same as Canada
In what she labels a mad scramble, ACL saw an opportunity to carve out a powder coatings niche for the pipeline industry. While Western Canada offered a lot of opportunity, the company also set its sights on the oil-producing states in the Southern U.S. – and they quickly learned the Canadian and U.S. markets are different.
“We discovered that labour is much cheaper in the U.S., so there’s no way we could compete on price alone,” she explains. “We had to focus on quality and a complete, end-to-end solution to be competitive. Our play there is longevity and cost savings over time. That’s the basis of our value proposition.”
That insight was gained through in-market visits and a number of conversations with potential customers, as well as conversations with competitors.
“As a result, we learned that to be successful, we have to continually reinvent ourselves and stay ahead of the competition,” Bamford says. “That means constantly talking to customers and figuring out how to solve tomorrow’s challenges today.”
Bamford’s advice to SMEs looking to expand their global footprint is don’t underestimate the value of research, but also trust your instinct.
Research is crucial and often happens in real time, she says. Successful entrepreneurs follow their gut feelings – they see an opportunity and then make it happen.
Bladetech carves out a niche in the NHL
Anthony Morra and Jeff Azzolin believed they had a solution for hockey players worldwide. Their challenge was getting their product into the right hands, or on the correct feet.
Their Toronto-based company, BladeTech Hockey, manufactures the world’s only flexible skate blade, using a proprietary Flex-Force technology. The blade improves skater acceleration while easing body strain.
The duo’s in-depth market research unveiled some critical challenges – the hockey world is very close-knit and breaking into an export market beyond Canada, including the U.S., would be difficult. New competitors from Korea and Finland were also forcing them to think creatively.
“Like any business, success hinges on the ability to establish and strengthen relationships, so we needed to figure out a way that we could do that,” says Morra, Bladetech CEO.
Taking a shot on a new value proposition
Their solution was targeting the equipment managers of NHL teams with a value proposition that Bladetech blades would make their jobs much easier.
We were instantly solving a problem (for them) by demonstrating our blades only need to be sharpened half as much as traditional blades, Morra says. That definitely got their attention.
The overall goal, however, was to enable the players to put this new innovation to the test and literally buy into the technology. More than 30 National Hockey League players on eight teams are currently using the Canadian invention, in addition to many of the league’s referees.
Targeting the NHL first was a little unorthodox, but necessary, Morra says.
“It’s like we put the cart before the horse, but our market research dictated that targeting the NHL had to be part of our business plan if we wanted to gain an edge and be successful in other markets,” he says. “It was the easiest way for us to get into the U.S. Now, having NHL players using our blades will definitely help us in new markets.”