Background and challenge

A leading manufacturer and brand of vitamins, minerals and supplements had built a presence in various international markets, but had no or limited presence in many of the world’s largest and most vibrant economies, underscoring a significant upside for growth. The company asked L.E.K. Consulting to develop an international expansion plan that prioritized and sequenced the most attractive geographies for entry, and to develop detailed market entry plans for the highest-priority countries.

Approach and recommendations

The first step in the project was to work with our client to establish clear objectives for its international growth ambitions (e.g., size, speed, timing), as well as to define key characteristics (e.g., risk tolerance, appetite for investment) that would guide the prioritization and sequencing. We also evaluated the company’s current international footprint and past experiences to understand where the business did and did not create value, what did and did not work, and key success factors.

Our market prioritization phase identified the most attractive markets by utilizing a staged approach. In the earlier stages, we prioritized regions and countries based on various macro factors that elevated markets (and eliminated others) and that were fundamental to success; for example, attributes such as market size, growth, consumer health and wellness affinity, market stability, and ease of operating in-country.

In later, increasingly detailed stages of the prioritization, we developed deep insights on key dimensions that allowed further and more nuanced ranking of countries; for example, attributes such as consumer needs and preferences, channel structure, competitive landscape and intensity, and regulatory requirements. This required extensive market research, including in-country research and analysis. This phase culminated in various client workshops and iterations, in which we collectively built consensus around which markets to pursue, in what sequence, and the pathway to build regional scale and invest in a pragmatic yet deliberate way.

The market entry planning phase consisted of building holistic plans for how to enter and build a successful business in various high-priority countries. These plans comprised various components, including business model selection, consumer segment prioritization, value proposition positioning, product line mapping, price positioning, channel strategies, marketing plans and partner identification.

Results

Successful entry has been achieved in all near-term priority markets, with positive profit and a trajectory to achieving over $100 million in incremental sales. The international team has scaled substantially and is progressing on numerous regional and country-specific growth initiatives.