How Can Brands Enter New Markets (And Succeed!)

Friday 15th, July 2016

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It was the early 2000’s when the Chinese telecommunications giant, Huawei, decided to enter India.

There were multiple challenges to surmount:

  • The Indian supplier market was heavily saturated to make any significant impact.
  • Huawei needed to battle the perception that the Chinese products are subpar and inferior – as well needed to create a reputation for reliability.
  • To top it all, the diplomatic relations between both countries were shaky at best.

To overcome these challenges, Huawei made some smart moves and employed some carefully thought-out strategies:

  • To counter the market view of inferior products, Huawei launched high quality products and started channeling 10% of its yearly profits into Research & Development. It opened multiple service centers and R&D units to bring the production quality to international standards.
  • As a result of these efforts, India is Huawei’s second largest research base outside China.
  • 90% of the jobs went to Indians – creating a perception that Huawei is interested in value creation and not just value extraction.
  • Huawei worked with local producers at its manufacturing plants in Chennai. Sourcing components locally is cheaper and also allows local companies to raise their manufacturing standards to become more competitive and skilled. This way Huawei saves valuable dollars at the same time boosts the economy.
  • To brand itself as an attractive employer, Huawei developed a strong culture of rewarding talent and promoting talent to managerial positions.

This way Huawei successfully integrated with the Indian market and continues to expand rapidly.

Today Huawei’s strategy is considered as a great reference point for any company looking to expand its business.

So how can you learn from Huawei and successfully gain foothold in a new market?

Let’s find out.

Choose a Favorable Region

If you’re planning to branch into a new territory, identify the regions where the demand for your product is strong and the supply weak.

Pick the favorable country and come up with a strong strategy. If it’s a particular region, ensure it’s the one with similar culture and traditions.

Be Conscious of the Economics of Doing Business

Stay updated with the economic policies of the target market.

Find out if the target market charges exceptionally high taxes.

Enquire about the import duties and any hidden charges that can be stumbling blocks.

All the factors need to be considered to decide if you’ll be able to have a competitive pricing strategy.

Analyze the Competition

Do a SWOT analysis of your local competitors. Find out who is successful and who is merely present.

Learn from their success and failures to avoid repeating the mistakes.

In case, there are too many players, analyze which one would be the best to partner up.

Choosing the Right Partner

If you have to draw up a business model that requires partners, ensure they put in the same amount of effort as you do.

You should evaluate if they can be trusted, and if you can rely on them to do your business.

Recognize the Challenges

Given that you’re entering a new market – proceed with caution.

Never assume that you’ll find a similar consumer behavior or a friendly environment to do business – even if the geographic cultures are similar.

Approach with utmost caution and have an open mind to solutions.

Do the Due Diligence

Work with the local experts and understand the laws that govern businesses in the target market. You need to be cognizant of the laws, personnel laws and custom duties.

A well planned approach is needed to ensure the risk is minimized.

Research on your focus group and identify a well-balanced cross section of the target audience and approach them in person or through online surveys that will be helpful to make any changes before you commit to a full market entry.

Final Note

The key to succeed in a new territory is to have a thorough understanding of the market and a solid action plan that will satisfy the needs of the customers.


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