Choose a market to expand abroad

Ensure you understand the opportunities and the risks

IDENTIFY TARGET MARKETS

Research potential markets and explore target markets

CONDUCT CAREFUL RESEARCH

Find out what the risks and opportunities are

SEEK EXPERT EXPORT ADVICE

Get the right advice to make an informed decision

How to choose a new export market

globe map jigsaw

Working out where to export can be a puzzle

Sometimes, businesses start trading internationally almost by chance. A sales enquiry from abroad can kick-start a process which ends up in a substantial increase in growth and profitability.

More usually, however, companies tend to plan their move into international markets and seek to ensure that they understand the risks and the potential rewards of entering a foreign market.

Whilst it is recognised that those businesses who export have greater growth prospects, survive for longer and are generally more profitable, there are also risks and potential downsides which need to be considered.

It may be sensible to focus on one or two export markets initially and there are two main types of research that you can undertake.

Primary research

What information can you gather from first-hand experience, whether by actual visits or from talking to other companies who have experience in the particular export market you choose to start with.

Understanding your target export market is the key to developing a successful export plan. There is no real substitute for gaining first-hand knowledge about the processes, customs, opportunities, threats and local competition, as well as establishing reliable contacts or finding local B2B partners who can help you.

However, it can be very time-consuming and expensive so it needs to be carefully thought through, with a tightly defined set of objectives.

Secondary research

Country trade and economy statistics, competition analysis and market intelligence.

One of the most comprehensive sources of information about exporting to individual countries are the Exporting country guides produced by the Department for International Trade. They provide a wealth of information about individual potential export markets.

Shipping containers at container port

Find international opportunities for your business

With a wide range of sector guides and a comprehensive range of advice and guides to different export markets around the world, the Department for International Trade is an excellent source of advice for any business looking to find new opportunities in export markets abroad.
Explore the market guides and export advice
Find international opportunities for your business

Find international opportunities for your business

With a wide range of sector guides and a comprehensive range of advice and guides to different export markets around the world, the Department for International Trade is an excellent source of advice for any business looking to find new opportunities in export markets abroad.
Explore the market guides and export advice

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PESTLE - a framework to analyse an export market

A useful framework to help you understand how to analyse a particular export market is called PESTLE. It is a framework used to analyse the key external factors that can impact an organisation. In particular, it is useful for understanding and identifying the market risks associated with entering a new market or a new country.

Along with understanding what the key drivers and factors are, it is also important to relate them to, and analyse the impact on, your own company and its capacity for change and growth.

graphic small business can say hello to the world tag cloud

Understanding the level of political stability and freedoms around democracy, freedom of speech, security and levels of corruption.

Also, the degree of government intervention in areas such as tax policy, labour law, environmental law, trade restrictions and tariffs.

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Other Factors to Consider When Exporting to New Markets

Demand

Demand

How developed is the market for the type of product or service you wish to sell? Do the local customers (consumers or businesses) have sufficient purchasing power to create sustainable demand?

What are the demographics of the country: is it a predominantly young market; is it mainly urban or is there a large rural market to target?

Competition

Competition

Is the price that you calculate you need to sell for competitive in the export market and does it factor in an allowance for currency fluctuations? Have you fully costed the logistical and regulatory costs that you will incur?

Who is your competition and do they have local competitive advantages (scale, exclusive distribution channels, local brand recognition and loyalty) that would make it very difficult for you to break in to the market?

Route to Market

Route to Market

Do you understand what is involved in, and the costs of, getting your product to market and through customs and regulatory compliance? What distribution channels will you need and have you found reliable partners to help you?

Is the country's infrastructure reliable and up to the job of distribution or will it pose a risk (and add costs) to your market strategy?

Cultural

Cultural

Does your product serve a local need or will it need to be adapted to suit local requirements? Does your packaging and marketing material need to be changed to reflect a different local approach? Do the local payment terms fit in with your business model and can you accommodate them?

Location

Location

Where should you base a physical presence in a new export market? You may need a representative office or to set up a production facility, so how do you choose where to locate your site?

Capital cities still act as a significant draw. They tend to be the political, as well as the economic centre for many countries and they often dominate the economy of their country.

When assessing where to set up, you need to be aware of costs and availability of things such skilled labour, office or building space, local taxes, local energy costs, infrastructure, proximity to market centres and proximity to B2B suppliers and partners. It also worth checking out if there are any investment incentives, relocation or start-up packages.

Two business people shaking hands

Demand

How developed is the market for the type of product or service you wish to sell? Do the local customers (consumers or businesses) have sufficient purchasing power to create sustainable demand?

What are the demographics of the country: is it a predominantly young market; is it mainly urban or is there a large rural market to target?

View from above of pair of hands looking at charts

Competition

Is the price that you calculate you need to sell for competitive in the export market and does it factor in an allowance for currency fluctuations? Have you fully costed the logistical and regulatory costs that you will incur?

Who is your competition and do they have local competitive advantages (scale, exclusive distribution channels, local brand recognition and loyalty) that would make it very difficult for you to break in to the market?

Large Container ship fully loaded at sea

Route to Market

Do you understand what is involved in, and the costs of, getting your product to market and through customs and regulatory compliance? What distribution channels will you need and have you found reliable partners to help you?

Is the country's infrastructure reliable and up to the job of distribution or will it pose a risk (and add costs) to your market strategy?

Two business people standing shaking hands

Cultural

Does your product serve a local need or will it need to be adapted to suit local requirements? Does your packaging and marketing material need to be changed to reflect a different local approach? Do the local payment terms fit in with your business model and can you accommodate them?

Busy street scene in Asian city

Location

Where should you base a physical presence in a new export market? You may need a representative office or to set up a production facility, so how do you choose where to locate your site?

Capital cities still act as a significant draw. They tend to be the economic, as well as the political, centre for many countries and they often dominate the economy of their country.

When assessing where to set up, you need to be aware of costs and availability of things such skilled labour, office or building space, local taxes, local energy costs, infrastructure, proximity to market centres and proximity to B2B suppliers and partners. It also worth checking out if there are any investment incentives, relocation or start-up packages.

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