Choosing the Right Market for Expansion | MrJoe - Coach to CEOs
Summary
TLDRThe speaker discusses the challenges of expanding a business into new markets, emphasizing the importance of considering both the potential and the effort required. They suggest evaluating markets based on two dimensions: the potential for growth, which can be high in large markets with significant populations, and the effort needed, which may increase due to language barriers, regulatory challenges, and the need to educate or change consumer behavior. The key takeaway is that while a market might seem promising, the actual success of a business depends on a careful balance between these factors.
Takeaways
- 🤔 The speaker often gets asked about the best market to expand into and whether it should be a market with the same language.
- 🌍 They mention the example of Spanish and Latin America as a potentially large market to target, suggesting that language can be a significant factor in market selection.
- 📈 The speaker emphasizes that while language can be an easy consideration, there are many other factors that contribute to the success or failure of a business in a new market.
- 🇬🇧 They point out that even if a market shares the same language, such as English-speaking markets like the UK or Australia, business growth may not be guaranteed.
- 📝 The speaker suggests starting by evaluating existing markets and hypotheses about why a market might be a good fit for expansion.
- 🔍 Two key dimensions to consider when evaluating a market are the potential of the market and the effort required to enter and operate in that market.
- 👥 The potential of a market can be assessed by factors like population size and the total addressable market.
- 💼 The effort required includes considerations such as language barriers, regulatory compliance, and the need for market education or behavior change.
- 📉 High potential markets may not always correlate with low effort, and vice versa, indicating that a balance must be struck when choosing new markets.
- 📚 The speaker recommends an exercise to map out these two dimensions to help visualize the effort versus potential of different markets.
- 🚀 The transcript highlights the importance of strategic planning and careful consideration when deciding on which markets to target for business expansion.
Q & A
What is a common question people ask regarding expanding to new markets?
-A common question is about where to start and which market to go to next, especially whether to choose a market with the same language for ease of expansion.
Why might someone consider expanding to a market that speaks the same language as their current market?
-Expanding to a market with the same language can be easier due to the reduced need for translation and the potential to leverage existing language skills, such as expanding to Latin America if the current market is Spanish-speaking.
What are some factors that contribute to the success or failure of a business in a new market?
-Factors include the ease of language translation, market size, population, addressable market, and the potential for growth, as well as the effort required in terms of adapting to local regulations and market behaviors.
Why might a business have a hard time growing in a new market even if the language is the same?
-While language can be a barrier, growth in a new market also depends on other factors such as market acceptance, competition, and the business's ability to adapt to local preferences and regulations.
What is the importance of considering the effort level when expanding to a new market?
-The effort level is crucial as it involves the time and resources needed to adapt to a new market's regulations, cultural differences, and potential language barriers, which can significantly impact the success of the expansion.
How can a business evaluate the potential of a new market?
-A business can evaluate the potential of a new market by considering factors like population size, total addressable market, and the market's growth potential.
What does the speaker suggest as an exercise to help decide on a new market to enter?
-The speaker suggests thinking about two dimensions: the effort level required for the market and the potential of the market, which can help in mapping out and deciding on the new market to enter.
What are some challenges a business might face when entering a new market with a different language?
-Challenges include the need for translation, understanding and adapting to different legislations, and potentially having to educate or change the behavior of the new market to align with the business's offerings.
Why is it important to consider both effort and potential when deciding on a new market?
-Considering both effort and potential is important because a market with high potential might also require significant effort and investment, and not all high-potential markets may be feasible or profitable for a business to enter.
How can a business assess whether a market has a large addressable market?
-A business can assess the size of the addressable market by looking at the market's population, the number of potential customers, and the demand for the products or services offered.
What does the speaker mean by 'serviceable addressable market'?
-The 'serviceable addressable market' refers to the portion of the total addressable market that a business can realistically serve and capture, considering factors like logistics, distribution, and customer reach.
Outlines
🌐 Exploring New Markets: Language and Potential
The speaker discusses the common dilemma of deciding which new market to enter, emphasizing the importance of considering both language and market potential. They suggest that while entering a market with the same language can be easier, it's crucial to evaluate the growth potential of any market, including factors like population size and the addressable market. The speaker also mentions the need to assess the effort required to penetrate a market, such as overcoming language barriers, navigating different legislations, and potentially educating or changing consumer behavior in the new market.
Mindmap
Keywords
💡Market Expansion
💡Language Barrier
💡Potential
💡Effort Level
💡Regulation Compliance
💡Market Education
💡Investment
💡Growth
💡Profitability
💡Market Hypothesis
💡Strategic Evaluation
Highlights
Common question about identifying the next market to enter.
Consideration of whether to expand to a market with the same language for ease.
Example of targeting Spanish-speaking markets, including Latin America.
Challenge of ensuring business growth in a new market despite language similarities.
Importance of evaluating the potential and effort required for a new market.
Assessing the size of the addressable and serviceable market for potential.
Need to consider the level of effort in terms of language translation and market understanding.
Examining the impact of different legislation and regulations on market entry.
The necessity to potentially educate or change the behavior of a new market.
Balancing the high potential of a market with the high effort required for success.
The concept of mapping out markets based on potential and effort.
Discussion on the hypothesis of why a market might be a good choice.
Approach to working with clients to evaluate and select new markets.
Highlighting the importance of market research and strategic planning.
Understanding that a website's presence in a market does not guarantee success.
The difference between potential and actual growth, profits, and revenue in new markets.
The need for significant investment and time when entering a new market.
Transcripts
and then back to your questions about
like where do you even start like I
think a common questions I always get is
like okay where's the next Market I
should go to like like should I go to
the same language um it because easier
um and even if I go same language for
example Spanish then that is that's me
sorted because I'm covering Spanish and
also Latin America like that would be a
big market so I kind of like that is one
thing that always like stop stop stop
for a second and think about that um to
start with sure language things is kind
of quite easy to think about but there
are so many different things that um
will contribute to the success or not
when you're in the you could have the
language translated easily or you say
it's English Market I can easily go to
the UK or Australia because it's English
you will get there but whether or not
your business is going to grow um in the
way that you want that is another matter
like you could have a website exist you
can have a the products exist in the
market but you your your subs your your
subscriptions um or your growth or your
profits Revenue probably not going to be
kind of equivalent to what you have in
in in your home market so one thing that
I normally will do with um client
sometimes or or our management it's like
okay let's send back a bit like see
which Market we have in my sure you have
a few markets and then you have the
hypothesis as well like why you think
that market would is a good one to go
for so but then one exercise to do is
think about two dimensions for me is one
is like think about the effort level
that you have to put in for the market
and then also if you want to say that
it's more on potentials of the market so
then you can mop it out um so for
example you can say um this is a big
Market this is good in the potential
side because uh it has a very huge
populations um my time my total
addressable Market or um in my
serviceable addressable Market is going
to be big because um then that means
it's a good thing so there's high
potential also you need to think about
um efforts what efforts it's going to be
like for example is that going to be a
lot ofs because it's a different
language so you need to figure out you
need to invest a bit more time on that
but it's also the legislation is very
different in that market like um you
need to go through a lot of regulations
um and everything to kind of be approved
or certain things or you need to think
about actually do you need to
educate or change the behavior of that
market so that it will come to you and
use of it so then the effort level will
go really high and that means you need a
lot more Investments even the potentials
the time is really high but that you
know that might not go together
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