Study The Global Context
As a Microsoft Partner expanding into the US seemed a natural and attractive proposition, but that doesn’t automatically mean it’s the right market for Compusoft, the panel counselled. Taking the time to analyse the global context is crucial.
Lisa advised Milton to step back and assess the company’s competitor matrix in the US, comparing this to a number of other markets, to affirm which is the best fit.
“Many companies end up being ‘accidental exporters’ as they respond to the first phone call they get, or work with a personal contact abroad. That’s how they start, but it’s not a carefully planned move that has been assessed and had a solid expansion strategy put in place.”
“It’s also important to look at the competitive landscape – you might find that you have little competition in Australia, but that this increases dramatically in another market.”
Some of the other factors worth investigating include the political landscape, regulation, tax and laws that might apply to your product or service in an overseas market.
“Everyone logically goes to the US with a tech company, but often because it’s the biggest market in terms of size - and they’re drawn by Silicon Valley’s reputation. I tell companies to look at markets that are smaller, or less obvious, because you have a significant advantage if you can trade in an uncrowded marketplace,” Lisa said.
This sentiment was echoed by Ross, who reminded Milton that higher population doesn’t only mean more opportunity, it can also translate into greater levels of competition.
Skander explained that OFX’s initial expansion from Australia was into the UK market in 2005. “Although still English speaking, you’re dealing with a financial services system that’s very different to Australia. In some ways, more highly evolved, and with that comes greater industry regulation and higher public expectations of product performance and service levels.”