New Markets, Part I: Establishing Your Unique Presence in New Markets and Overcoming Barriers to Entry.
Navigating a new market can be difficult, but both the process and the end results can be rewarding. Companies hoping to introduce products and services into new markets have begun to find unfamiliar, unexpected obstacles. To use American idioms, it’s difficult to “put your best foot forward” while you’re tripping over your “two left feet.”
The customary strategy for opening up a new market has been to research and advertise in-country, perhaps gain some exposure for the brand, but then to service that new market remotely—over the phone or via video-conferencing from strategically-located metropolises hundreds or thousands of miles away, from regional offices in other countries, even from other continents.
Remote-Control Approaches Do Not Work
For various reasons, the remote-control approach has not been a successful way to establish a unique presence for a company. The dilemmas are many, and they are progressive—especially as we grow businesses in an increasingly globalized world.
One hiccup, just one negative experience, can trigger a small shift with large ramifications. Hiccups do happen—and many of them can be traced back to a shortfall of intercultural experience and understanding.
There are miscommunications. There are misaligned expectations. There might be a general lack of knowledge of conventional contracting processes and procedures. Both parties may have different understandings of industry standards or what constitutes a “reasonable amount of time” in one or the other country. More hassle or prerequisite paperwork may be required of people on one end of the deal to push it to completion than is expected or even imagined by the people on the other end.
For example, take an American technology corporation that wants to put its “best foot forward” in a new market: They have conducted careful research and they really believe that it will be a strong opportunity, one that would bring value to all parties involved. They work hard to prepare proposals for potential clients.
But what if they do not realize that the cycle time for a contract to be signed in their target market is actually much longer than in other parts of the world? Few American firms would know that the amount of up-front time required to acquire new clients in their industry takes two to three times longer on average in the United Arab Emirates than it tends to take in other markets.
When client acquisition representatives are accustomed to investing three months into persuading a client to sign a contract, they tend to write the contact off if they do not get a signed a contract in that time frame. They may eventually infer the wrong idea about whether their new market is viable.
The Hands-On Approach Is Still Difficult
If the company acknowledges that the long-distance interaction is not working, they could decide to just give up and scrap the contract. Or they might decide to open up an office in the region and hire some client representatives that have regional experience. That would be a smart move.
Barriers to Entry
Of course, there would still be potential challenges. Setting up an office in a new market area is expensive. Systems and processes for setting up a new regional office may not exist, and those that do may be cumbersome. In some emerging market economies the most basic logistics of office setup can be a stumbling block.
Ambitious targets for development might need to be mellowed in order to accommodate the intercultural transitions. Plans may need to be postponed in order to create a timeframe better-suited to the new market environment.
The Successful Hands-On Approach
New market entry has never been an easy undertaking, and in a globalized economy, it requires innovative new approaches—as well as an openness to learning and being coached by people who are seasoned in the new market region, and who are interculturally competent.
Seasoned hires should understand what works in the new market context. However, if they do not understand your company’s context, then miscommunication and misaligned expectations will simply crop up with the seasoned hire and the client.
People with intercultural competency know where to look for miscommunication and misaligned expectations and how to build processes to solve these problems. But they may not know what works in the new market.
A new market entry needs both competencies to be successful.
KnowledgeWorkx has stepped into these situations—not merely to act as a crutch, but to join companies on this journey. KnowledgeWorkx comes alongside your initial core team in the form of an executive coach, and helps you to engage your new market successfully. Contact Us for more information.