4 Questions a CEO Must Ask Before Entering a New Market

Construct a viable plan to expand to a new geographic market by considering four fundamental factors.

To expand or not to expand – that is the question.

Scaling your business beyond the borders of your existing territory is a prospect that is at once full of potential, and full of danger. Many companies’ fortunes have been won or lost through a successful or disastrous decision to expand their business to a new territory. As such, the decision to expand is one that is never to be taken lightly. To make sure that your decision is grounded in business logic and confidence, it is crucial that you consider the following four factors.


  1. Which Market Should I Enter?


Deciding on which specific market you will want to enter will require a considerable amount of analysis. You will need to develop a granular understanding of the market’s potential, growth, competition, and potential barriers to entry. CEO of American Global Logistics gives an excellent insight into determining which markets are best for you to compete in during an interview here.


SBI has created a tool to help companies evaluate their overall readiness to have their brand perceived positively in a new market.




  1. Who Will Be My Target Customers?


While this may seem obvious, your market must be clearly defined. Important things to consider are aspects of your target customers – including their common traits, needs, and propensity to buy. This market segmentation will allow your reps to hit the ground running and provide you with both quick wins and lay the foundations for future growth and success.


SBI CEO, Matt Sharrers, covers this topic and more in his detailed blog about the classic pitfalls facing market entry attempts here.


  1. How Should I Enter the Market?


Determining your method of entry for the new market is a critical question that will need to be sorted early into this process. There are three main methods of entry, each with its own advantages and disadvantages:


Build from Scratch:

  • While a daunting prospect, building up your capabilities inside a new territory will allow you to retain all of the profits from your enterprise. Additionally, this will ensure a smooth transition as the new enterprise will essentially be an extension of your existing processes. However, the sunk costs and risks associated with it are wholly owned by yourself as well.

Buy out an Existing Player:

  • Acquiring an established organization in the market essentially enables you to cut out a large portion of the administrative burden of building from scratch. This will allow you to quickly enter a market through an organization with pre-existing knowledge, systems, and processes. However, large numbers of acquisition efforts fail each year due to poor integration efforts and process conflicts between the acquirer and acquired. It is crucial that you perform an in-depth due-diligence of any organization you plan to obtain to ensure you are buying something that is of legitimate value.

Partner with an Existing Firm

  • An alternative option for the more risk-averse would be the choice to partner with an existing firm, thereby sharing any sunk costs and risks that are prevalent with this new entry. However, as a result of this partnership, profits will be shared with your partner organization, and integration efforts between organizations can prove costly.

When developing your GTM strategy, SBI’s Revenue Growth Diagnostic will also provide you with an invaluable perspective on positioning yourself against the competition as well as using external insights to answer the key questions of strategic advantage development and overall competitive market selection.


  1. Do I Have the Right Capabilities for This?


Expanding into a new market will depend on your assessment of your current capabilities, while you are assessing these, you need to ask yourself:


  • Do I have the right talent on my team to execute my market entry strategy?
  • Do I have access to a suitable local sales talent pool to allow me to effectively scale up once I have entered this market?
  • How much of my existing core competencies can be leveraged?

While asking yourself and your team these questions might seem a monumental task, there are ways to make the process easier and more accurate, enter SBI. SBI’s bespoke revenue growth methodology can partner with you to:


  1. Identify the markets with the most potential for you to achieve both quick wins and long-lasting success.
  2. Conduct a granular segmentation of your chosen market, highlighting customer segments that have the most significant value and the highest propensity to buy from your sales team.
  3. Identify the optimal route to market for your overseas expansion.
  4. Facilitate an in-depth analysis of the current talent within your sales and marketing organization and help to identify the areas that can be leveraged and the crucial areas of opportunities for success.
To help get you started, use SBI’s Company Self-Evaluation Tool to help identify areas you need to invest resources and to provide your team with a framework for an annual review of brand perception.

Go to our website:   www.ncmalliance.com

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