What are some of the ways businesses can move into new markets?Jul 11
When considering new markets, one has to keep in mind whether the market in question is a new local market or a geographic expansion for the business. Both types of new market pose its own set of challenges and opportunities. New local markets are tricky because they tend to involve new business models – moving from product centric to service centric for example – while geographic expansion might involve the same or similar business model but in a physically distant or culturally different environment.
There are a number of ways businesses can move into new markets: partnerships, acquisition, iteratively and targeting a niche – among others.
It seems to me though that all the aforementioned strategies are means to the same end. For a business to move into a new market, that business needs new capability and most if not all that capability lies in people. Acquisitions and partnerships are ways for a business to bootstrap itself with new capability for the new market it wants to operate in.
The key – in my opinion – for a business to successfully move into a new market is having, hiring or partnering with the right people. Which human resources strategy a business should follow depends on the timeframe for moving into the new market and each strategy again has its own advantages and disadvantages. Training existing resources for example, could take longer but might be worth the investment in the long-term as it promotes stability in the organisation while hiring new resources might be the quicker path but could be more risky and have more unpredictable results. Depending on the new market – especially if it’s radically different or if the business model is radically different – hiring new resources or partnering might be the only viable option.
Regardless of the strategy a business employs to move into new markets, getting the best people is the best recipe for success.