How does a firm choose a foreign market for its products or services?
If only there was a way to logically “grade” a foreign market to sell into. Many US firms get very confused and intimidated when they try to choose which country to work with overseas, when entering an international market.
Many times CEO’s will say: “let’s go to England, because they speak English over there” or “China is the world’s largest market, lets sell there.” I always ask: China is the world’s largest market for what? And will entering a British market be relevant to other markets around the world? If we need an English speaking market, why not enter Canada, Singapore or the Philippines?
After 30 years, there is finally, now, a standard way to compare one market to another. The importance of WHY a market is selected, HOW it is entered and WHAT other opportunities flow from your choice is relevant and necessary. It is also fundamental to understand the size of the task being undertaken. Firms will essentially “marry” an overseas market. Great amounts of money, time and effort will be required. Often the entire business model will have to change to accommodate the needs abroad. Finally, the answer is here: The Market Entry Toolkit.