International and Global Expansion
In a time of globalization, an international footprint is increasingly important. Expanding internationally can allow retailers and brands to extend their customer bases, prolong the life of existing products, diversify risk and combat seasonality. But successful international expansion is complex. Distinct consumer preferences, competitive and cultural differences, and increased management and operational challenges require companies to make tough choices as they define their international strategies. But with L.E.K. Consulting’s deeply rooted international culture and experience in assisting companies across multiple consumer sectors expand globally, we have the right resources to help you get there.
Fundamentally, establishing an international growth strategy requires the answers to two questions: Which markets do you target, and how do you enter each market?
Which markets do you target?
We employ a prioritization process that typically begins with major markets based on GDP and other macroeconomic factors, and then winnows down these markets to a smaller set of candidates organized by market type, region and other clustering factors. The key to this exercise is using an organization’s strategic corporate guidelines to identify a short list of the most attractive markets. To further prioritize, we evaluate a series of trade-offs across the final list of countries being considered. These might include:
- Market size vs. market growth
- Market growth vs. market risk
- Global brand consistency vs. tailoring to local appeal
- Speed to market and cost efficiency vs. control
How do you enter each market?
Once the markets are selected, proper market entry planning requires a solid foundation of knowledge about the myriad factors that can affect consumers’ perceptions about a new brand and access to products or stores. This requires in-country research to address key questions that consider:
- Business model
- Consumer demand generation
- Competitive positioning
- Channel strategy
- Regulatory compliance
- Supply chain and organization infrastructure
Forging the Right International Expansion Path
This Executive Insights delves deeper into the critical issues to consider when expanding globally and highlights how a number of world-leading companies have addressed key trade-offs.