Glocalization 

Adapting Your Business to a New Market

Expanding internationally is something many companies want to do but do not know how. There are many options for international expansion and what works for one company may not necessarily work for another. In addition, just because your company is successful in its current market and country does not mean that it will be a success another country. So, when looking to take your business abroad, it is important to make sure that you conduct market research and learn about that country’s laws and regulations.

To get a better understanding of this, lets take the example of a successful chocolate company looking to expand into the United States. In the US, there are four main actors in this market (Hershey, Mars, Lindt and Nestle) that account for 89% of the total market value. You analyze these companies but still think that you offer something they don’t. Through your market research you also learn that the chocolate market experienced a 2.1% in volume and totals $19 Billion. Now you definitely want to enter this market. However, upon further research, you realize that the US FDA has high food safety regulations which means your company will be tied up trying to get FDA approved. Then, perhaps you realize that this market is very concentrated and it might not be that easy to just open a store and be a success.

So, how do you successfully expand into the United States?

If the market is concentrated by big corporations, like the four mentioned that are also global brands, you need to get creative. Look to see what the market is missing but people want and need- be innovative. Another option is partnership. Partner with an already established, large, successful brand. Offer your product to be paired with theirs; so, when people buy their product, they get something of yours as well. This builds brand awareness through a strong partnership with major brands. Or, for example, in your market research you find out that the global chocolate industry has rising demand but, by 2020, it’s expected to run out of cocoa… Perhaps your company grows its own cocoa beans, leverage that and help improve the cocoa supply. Maybe this is not exactly how you wanted to expand but, it is a way to get your company known and enter the US market.

It is important to remember that markets vary, especially when you’re expanding internationally. What works in your current market or country will not necessarily work in another. You may have to change your business model to be successful or change your product offerings. When expanding, make sure you do a thorough market analysis to learn the best mode of entry and minimize the risk of failure.

Soaring Your Product into a New Market

With the ever evolving technological advances, the consumer drone market is growing rapidly. So, it is important that you make sure your company is developing products that match the applications and marketing those products to the correct customer segments. There are three different customer segments in the drone market: military, commercial, and consumer drones. All three of these markets are extremely different. Knowing your target segment is imperative in order to be able to succeed in a booming industry.

Drones can be used by everyone and for almost everything; agriculture crop monitoring to surveillance to sporting events. As a result, the photographic equipment market is declining; 11% over just four years, because it does not offer the same multi-use functionality that drones have. This decline in photographic equipment offers a unique partnership for your company with this suffering industry because they are so closely related.

While there are many alternative ways to take photographs and videos, none pose a serious threat to drone manufacturers because their offerings are not even comparable to the complex and technologically advanced equipment that drones provide. In addition, there is no market leader yet recognized by the general public. So, consumers have low brand attachment which allows for market penetration. However, there is a lot of competition. This means that your company will have to have a competitive advantage in order to stand out and gain brand awareness.

Tea-ing Off Into America

Shift towards a healthier lifestyle opens the market for international companies looking to expand 

Health and wellness is quickly becoming more and more of a concern for people. One small step people are taking towards this healthier lifestyle is drinking more tea and less coffee. The gourmet coffee shop market has been steadily declining for the past five years. This provides a gap that needs to be filled and is being done so by the high quality tea market.

In the United States, over 22% of the population drinks tea. In general, tea consumption increased with age; however, this trend is shifting. The largest tea consumer groups are now urbanites and hipsters under the age of 34 years old. While women still consume more tea than men, this new consumer group in comprised of more men than women. This shows a shift in tea consumption and broadens the market.

Despite the US recession, the sales of tea did not slow down. Instead, the positioning encouraged consumers to learn more about what they were paying for. This led to the opening of boutiques and artisan teashops.

Premiumsation trends tend to anchor tea consumers to higher quality teas. Manufacturers use a health and wellness image of tea from exotic countries and use perceptions of high-end quality to justify these higher prices. The entry barriers for this market are quite low because of the low capital intensity of the market. Also, this market has risen close to 9% in the past four years. Companies need to leverage these health and wellness and premiumsation trends for added value.