For companies looking to expand internationally, Europe is a natural first choice given its maturity and large consumer and B2B market.
But many fails to attack properly the European market as they assume taking a ‘copy-and-paste’ approach. However, as with any new market, there are idiosyncrasies and keys to success that needs to be taken into consideration to prevent from failing in seizing the huge business opportunities.
Here are some guiding tips to attack properly the European Market.
When targeting their next market, every company should assess three variables. One: check if the market is growing i.e. if the market is offering new and constant business opportunities. Two: check if the market is not saturated i.e. it all boils down to the size of the market and where the customers are located. Three: check if the market has needs that are not fully fulfilled. Hardly, you will find a "no" response on those three checks.
Where to Expand?
For the reasons listed above, all European markets have good business opportunities in nearly every sector. Some countries may have some areas where all 3 checks are met, others less. For instance, Water industry has nearly been without enhanced innovation in all countries for years. There are tremendous opportunities to be taken in nearly all European countries. Energy is booming in Spain, in France, Germany. Every kind of efficiency, productivity tools are necessary in all countries for all industries.
The fact is when it is time to put a first foot in Europe, it is important to assess correctly the market and prioritise according to how your company is able to match with what i call "commercial holes"; in other words business opportunities where you have an industry growing with competition that can be beaten and with needs from customers not totally fulfilled.
How to Win?
The real challenge in European expansion is doing so strategically. This means tailoring an expansion approach to selectively address gap areas. Here are three crucial points for any effective European expansion.
The first is what he referred to as “tropicalization of the sales approach.” Successful companies when developing overseas strategies have all adapted their sales processes, their local successful sales approach to the European way. Many aspects needs to be taken into consideration such as how to adjust your different processes, how to integrate different decision-making attitudes, how to move at the right pace.
The next crucial consideration is hiring or outsourcing —an area in which even the strongest companies falter. The reason hiring or outsourcing proves to be such a challenge is that for many businesses, the lack of local ressources i.e. the lack of cultural, business cultural knowledge may put in danger any potential convertion between a wonderful value proposition to the capacity to transform it into a wonderful local answer to the market. We are seeing too many companies that fail to expand into Europe because they sent their best overseas people and despite their excellent background, the local business adaptation has failed.
Finally, the last consideration should be that companies should not delay expansion too long, specifically as a result of uncertainty driven by the COVID-19 pandemic. Expanding into Europe can bring short to medium term pay-backs but not going (even more when the three criterias are fulfilled) may have a high opportunity cost. Companies that delay too long create vacuums that may be filled by local competitors.
Is Your Business Ready?
International expansion has proven itself to be a top growth lever—apart from selling an existing product to different domestic segments or developing new products, going international is a natural milestone for growth stage companies. Now that you have the tools for successful expansion, the only remaining question is how soon you can kickstart your company’s global ambitions?