How To Develop A Geographic Expansion Strategy
What Is Geographic Expansion?
Geographic expansion is a market strategy where an enterprise grows by expanding from its original location to additional geographic regions.
Geographic expansion is one of the preferred business growth strategies.
According to Frost & Sullivan, geographic expansion can help enterprises gain access to new markets and talent pools.
Geographic Expansion Key Takeaways
- Geographical expansion means a wider customer base and an opportunity to make more impact
- If your products or services is a success, you could enjoy increased revenues from the new customers
- Geographical expansion presents an array of risks and opportunities for your business.
Understanding How Geographical Expansion Works
Entering a new geographical market involves expanding a firm's business to new regions.
When expanding geographically, the business manager is confronted with the task of managing an existing business and the start-up at the same time.
Before venturing into new geographical regions, research the opportunities, the risks, and the overall costs involved.
Real-World Examples of Successful Geographical Expansion
Walmart, is one of the best examples of a brand that has expanded globally.
Walmart opened its first store in Rogers Arkansas in 1962, and crossed the borders in 1991, opening the first international store in Mexico.
Today, Walmart is a multinational company that has developed into the largest retailer globally. The Walmart example is
KFC is another great example of a brand that has successfully expanded its product geographically.
KFC opened the first shop in Salt Lake City, Utah, in 1952.
Years later, KFC became the first fast-food chain to expand internationally and opened outlets in Britain, Mexico, and Jamaica in the 1960s.
How to Expand Globally
Target research and high-level prioritization to whittle down all potential geographies to expand into
Conduct a business model research assessing the competitiveness of your value proposition and go to market strategy
Utilize a decision matrix and an insightful fact base to decide on the expansion geographies
Create robust plans to enter, grow, and ultimately win in the expansion geographies.
Evaluate if you have the funds and customer base needed
Expand to New Countries
Expanding your product into new countries can be a great way to gain a new audience and have an even bigger footprint.
Just like any market, it's important that you do your research and have a good understanding of what the process will look like:
You may want to ask yourself things like:
- Will my business be successful in another country? Have I done my research?
- What are the tax and immigration regulations?
- What will this cost me?
- How much time will this take from start to finish, and is it worth it?
- What will my hiring process look like?
Abeer Iqbal, founder of Remy Sleep conducted research and identified that his business would do really well in Germany:
This year we have plans to expand into new countries. 95% of our sales come from the UK. Our research shows Germany is an interesting market and worth getting into. The challenge with Germany is the language. Germany, like other European countries, prefers purchasing from local websites. This means hiring a German-speaking customer service rep, opening a German fulfillment center, and translating our website and email marketing.
Hey! 👋 I'm Pat Walls, the founder of Starter Story.
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