Establishing a global brand is complex. Companies looking to expand internationally must contend with significant challenges, including varying consumer behaviors, cultural differences, and economic disparities. These factors make maintaining a consistent brand identity complicated while adapting to local demands. However, the rewards for getting it right are substantial. Brands that successfully navigate these complexities can tap into new markets, increase their global presence, and achieve sustained growth.

Understanding Local Market Dynamics

Successfully expanding into a new market requires more than just introducing an existing product or service to a different audience. This requires a deep understanding of the local environment, where cultural nuances, consumer behavior, and economic factors are crucial for a brand’s success. Brands that fail to consider these elements often struggle to gain traction because what works in one region may not translate effectively to another.

Take McDonald’s as an example. The fast-food giant’s success in markets like India highlights the importance of adapting to local tastes and preferences. Recognizing that much of the population avoids beef, McDonald’s reimagined its menu, introducing vegetarian options like the McAloo Tikki, a potato-based burger that quickly became a local favorite. This adaptation wasn’t a simple change; it resulted from extensive market research that provided insights into local dietary habits, preferences, and cultural sensitivities. By leveraging this in-depth understanding of the Indian market, McDonald’s maintained its brand identity while catering to local tastes, leading to its widespread acceptance and success in the region.

Image credit: McDonald’s blog

Adapting Global Strategy to Regional Needs

Maintaining a global identity while adapting to regional markets is a delicate balancing act. Brands must ensure their core values and messaging remain consistent across all markets. Yet, they must also be flexible enough to meet the specific needs and preferences of local consumers. This balance is crucial for sustaining a coherent brand image while being relevant in diverse regions.

Coca-Cola exemplifies how a global brand can achieve this balance. The company has consistently maintained its brand identity through its iconic logo, packaging, and overarching messaging centered around happiness and togetherness. 

However, Coca-Cola also customizes its marketing strategies to resonate with local audiences. In Japan, for instance, Coca-Cola introduced a range of products that cater specifically to Japanese tastes, such as green tea-flavored beverages and smaller, more convenient packaging sizes. The brand also tailored its advertising campaigns to align with local cultural values and traditions, reinforcing its relevance.

This approach allows Coca-Cola to retain its global identity while remaining adaptable to regional preferences. The result is a brand that feels familiar and relevant to consumers worldwide, demonstrating the effectiveness of a flexible global strategy that accommodates local needs.

Image credit: Coca-Cola Japan

Leveraging Technology for Global Reach

Technology is a critical asset for brands aiming to expand their presence globally. Digital platforms, data analytics, and artificial intelligence (AI) offer the tools necessary to understand and engage with consumers across different regions. These technologies allow brands to collect real-time insights, personalize their offerings, and deploy targeted marketing strategies that resonate with diverse audiences.

Netflix exemplifies how technology can drive global success. The streaming service uses data analytics and AI to deeply understand viewer preferences in various markets. By analyzing viewing patterns, Netflix can tailor content recommendations to individual users, making the experience more relevant and engaging for audiences around the world.

Additionally, Netflix’s investment in local content further enhances its appeal in specific regions, demonstrating how technology can be leveraged to achieve global reach and local relevance.

Image Credit: Netflix

Building Brand Trust Across Borders

Building trust is fundamental to a brand’s success, particularly when expanding into new markets. Trust is not just about delivering a quality product; it’s about transparency, adhering to ethical practices, and forging strong local partnerships. Consumers across the globe are increasingly discerning, and they expect brands to act responsibly and authentically, especially when they enter their local markets.

Unilever is a strong example of a brand that has effectively built trust across borders. The company’s commitment to ethical practices and corporate responsibility is evident in its Sustainable Living Plan, which aims to improve health and well-being, reduce environmental impact, and enhance livelihoods worldwide. Unilever has successfully integrated these principles into its operations across different regions, tailoring its initiatives to address local challenges.

For instance, in India, Unilever has partnered with local organizations to promote hygiene and sanitation through its Lifebuoy soap brand. By educating communities about the importance of handwashing, the company not only enhances public health but also strengthens its reputation as a responsible and caring brand. This approach has earned Unilever significant trust and loyalty from consumers in diverse markets, proving that ethical branding and corporate responsibility are crucial to establishing long-term relationships with global audiences.

Image credit: Unilever

Navigating Regulatory and Competitive Landscapes

Expanding into new markets often means navigating a complex web of regulations and facing stiff competition from established local players. Regulatory requirements can vary significantly from one country to another, covering areas such as product standards, advertising restrictions, and data privacy laws. For global brands, the ability to adapt to these regulations while maintaining a competitive edge is crucial for success.

Apple’s entry into the Chinese market illustrates how a brand can overcome regulatory challenges to establish a strong presence in a highly competitive environment. China’s strict regulations on data storage, internet censorship, and local partnerships posed significant hurdles for Apple. To comply with Chinese laws, Apple made strategic decisions, such as partnering with local companies like China Mobile and setting up a data center in China to store user data locally. These moves ensured that Apple met regulatory requirements without compromising its product offerings.

Moreover, Apple’s approach to navigating the competitive landscape in China involved understanding and responding to local consumer preferences. Apple differentiated itself from local competitors by offering localized content and services and developing features tailored to Chinese users. Despite the challenges, Apple’s ability to adapt to the regulatory environment and stay attuned to local market dynamics has allowed it to maintain a strong foothold in one of the world’s most challenging markets.

Image credit: Apple Store China

Common Pitfalls and How to Avoid Them

Expanding into international markets presents numerous opportunities but comes with its share of risks. Many brands make critical mistakes that can hinder their success or even derail their expansion strategy. Understanding these pitfalls and how to avoid them is essential for any brand looking to establish a global presence. Below is a list of common mistakes brands often make during worldwide expansion and practical solutions to navigate these challenges effectively.

Underestimating Cultural Differences

  • Conduct thorough cultural research to understand local customs, values, and consumer behaviors.
  • Tailor your product offerings, marketing messages, and customer interactions to align with these cultural nuances.

Ignoring Local Competition

  • Analyze and understand the competitive landscape in each market.
  • Identify major local competitors and their strengths and weaknesses, and adjust your strategy to offer something unique that resonates with local consumers.

Failing to Comply with Local Regulations

  • Engage local legal experts to ensure full compliance with local regulations, including product standards, advertising restrictions, and data protection laws.
  • Review regulatory changes regularly and adapt quickly to stay compliant.

Inconsistent Brand Messaging

  • Develop a flexible yet consistent global strategy that maintains your brand’s core identity while allowing for regional adaptations.
  • Ensure all marketing materials and communications align with global standards and local expectations.

Overlooking Supply Chain Challenges

  • Plan for logistical challenges specific to each region, including shipping, distribution, and inventory management.
  • Establish reliable local partnerships and consider setting up regional hubs to streamline operations.

Inadequate Customer Support

  • Provide customer support tailored to the local market, including language preferences and cultural expectations.
  • Invest in training local customer service teams to ensure they can address issues effectively and empathetically.

Underestimating the Importance of Local Partnerships

  • Cultivate strong relationships with local businesses, distributors, and influencers who can help you navigate the market and build credibility.
  • Local partnerships can provide valuable insights and resources that enhance your brand’s market entry and growth.

Rushing the Market Entry

  • Take the time to conduct thorough market research and develop a solid entry strategy.
  • Avoid rushing into a market without fully understanding the local dynamics, leading to costly mistakes and setbacks.

Neglecting Long-Term Strategy

  • Don’t focus solely on short-term gains. Develop a long-term strategy that includes continuous market research, adaptation to evolving consumer needs, and investment in local relationships.
  • Regularly revisit and refine your strategy to ensure sustained success.

Case Study Deep Dive: Tesla’s Global Expansion Success Story

Image credit: Tesla

Tesla, Inc. is a prime example of a brand that has successfully navigated the complex landscape of global expansion. From its early days as a niche electric vehicle (EV) manufacturer in the United States to becoming a dominant global force in the automotive industry, Tesla’s journey offers valuable insights into the strategic decisions, challenges, and results that have shaped its international success.

Initial Strategy: Establishing a Strong Foundation

Tesla’s entry into the global market was built on a foundation of innovation and strategic foresight. The company’s initial focus on producing high-performance electric sports cars, such as the Tesla Roadster, helped establish its reputation as a pioneer in EV technology. This positioning attracted early adopters and generated significant media attention, laying the groundwork for Tesla’s future growth.

One of Tesla’s earliest and most critical decisions was its Initial Public Offering (IPO) in 2010. The capital raised through the IPO provided the financial resources necessary to fund the development of additional vehicle models, expand manufacturing capabilities, and begin entering international markets. This move was instrumental in positioning Tesla for global expansion.

Market Entry: Targeting Europe and China

Tesla’s first significant international push came in 2013 with its entry into the European market. The company began selling the Model S in Europe, strategically opening service centers and stores in key cities across the continent. Europe’s strong interest in sustainability and green technology provided a receptive market for Tesla’s vehicles. Tesla invested heavily in building its Supercharger network to further support its European customers, ensuring EV owners had access to reliable charging infrastructure across the region.

China represented another significant milestone in Tesla’s global expansion. Recognizing the growing demand for electric vehicles in China, Tesla entered the market in 2015 with the Model S. China’s strict regulations on foreign ownership and data storage posed challenges. However, Tesla navigated these hurdles by forming partnerships with local companies and committing to building a Gigafactory in Shanghai. This strategic move allowed Tesla to localize production, reduce costs, and better serve the Chinese market, quickly becoming one of Tesla’s largest sources of revenue.

Image credit: Business Insider

Overcoming Challenges: Navigating Regulatory Hurdles

Tesla’s global expansion has not been without its challenges. The company has had to navigate various regulatory environments, each with its own set of rules and requirements.

In China, Tesla faced significant hurdles in data localization and foreign ownership. To comply with local laws, Tesla established a data center in China and became the first foreign automaker to wholly own its factory, thanks to changes in Chinese regulations.

In Europe, Tesla encountered challenges related to manufacturing and logistics. The decision to build Gigafactory Berlin was a direct response to these challenges. By establishing a manufacturing presence in Europe, Tesla could reduce production bottlenecks and streamline the delivery of vehicles to European customers, thereby enhancing its competitiveness in the region.

Results: A Global Automotive Leader

Today, Tesla is a global leader in the automotive industry, with a presence in major markets across North America, Europe, and Asia. The company’s commitment to innovation, sustainability, and strategic market entry has paid off, with Tesla consistently ranking as one of the world’s most valuable automakers.

Tesla’s success in international markets is evident in its sales figures and market share. The company’s ability to localize production through Gigafactories in China and Europe has significantly increased its manufacturing capacity and reduced costs, making its vehicles more accessible to a global audience. Additionally, 

Tesla’s continued investment in its Supercharger network and local partnerships has strengthened its brand’s reputation for reliability and customer satisfaction.

Key Takeaways from Tesla’s Global Expansion:

  • Strategic Market Entry: Tesla’s careful selection of markets and timing of entry were crucial to its success. The company prioritized regions with strong demand for EVs and supportive regulatory environments.
  • Localization of Production: Tesla could localize production, reduce costs, and meet the specific needs of local markets by building gigafactories in China and Europe.
  • Regulatory Compliance: Tesla’s proactive approach to navigating regulatory challenges, such as data localization in China, ensured its continued growth and success in key markets.
  • Innovation and Adaptation: Tesla’s commitment to innovation, from its vehicle technology to its charging infrastructure, has allowed it to stay ahead of competitors and continuously adapt to changing market conditions.

Checklist for International Expansion

Expanding into global markets requires careful planning and execution. Below is a practical checklist to guide brands through the complexities of international expansion:

Conduct Comprehensive Market Research:

  • Analyze local consumer behaviors, cultural nuances, and economic conditions.
  • Identify the demand for your product or service and understand the competitive landscape.
  • Determine the local market’s potential for growth and profitability.

Assess and Adapt to Regulatory Environments:

  • Understand and comply with local regulations, including product standards, advertising laws, and data protection policies.
  • Engage with local legal and regulatory experts to ensure compliance and mitigate risks.

Develop a Flexible Global Strategy:

  • Create a strategy that maintains global brand consistency while allowing for regional adaptations.
  • Tailor marketing campaigns, product offerings, and messaging to resonate with local audiences.

Leverage Technology for Localization:

  • Utilize data analytics and AI to gather real-time insights on local consumer preferences.
  • Implement digital tools to personalize the customer experience in different markets.
  • Ensure your digital platforms are optimized for local languages and cultural contexts.

Build Strong Local Partnerships:

  • Collaborate with local businesses, distributors, and influencers to enhance market entry and brand credibility.
  • Consider joint ventures or partnerships to navigate local markets more effectively.

Prioritize Ethical Practices and Corporate Responsibility:

  • Uphold transparency and ethical practices in all markets to build trust with consumers.
  • Engage in corporate social responsibility initiatives that resonate with local communities and reflect your brand values.

Prepare for Operational Challenges:

  • Plan for logistics, supply chain management, and distribution networks tailored to local market needs.
  • Ensure your customer service and support are equipped to handle regional languages and issues.

Continuously Monitor and Adapt:

  • Regularly assess your performance in each market and adjust strategies as needed.
  • Stay attuned to global market trends and local developments that may impact your business.

Global Expansion ROI Calculator

The Global Expansion ROI Calculator provides a framework for estimating the financial outcomes of entering new markets, allowing brands to assess the viability of their global strategies. This tool considers factors such as market entry costs, expected revenue, and operational expenses, offering a practical guide to evaluating the potential profitability of international expansion.

Key Components of the ROI Calculation:

  1. Market Entry Costs:
    • Initial Investment: Include costs associated with market research, legal fees, and setting up operations (e.g., offices, supply chains).
    • Marketing and Localization: Factor in the cost of marketing campaigns, localization of products, and adaptation of branding to fit local tastes and regulations.
  2. Expected Revenue:
    • Sales Projections: Estimate potential revenue based on market size, target audience, and expected market share.
    • Pricing Strategy: Consider how local economic conditions and consumer behavior influence pricing and sales volume.
  3. Operational Expenses:
    • Ongoing Costs: Include expenses related to staffing, logistics, regulatory compliance, and customer service tailored to the local market.
    • Technology and Infrastructure: Account for investments in digital platforms, supply chain management, and local partnerships.

Simplified ROI Formula:

  • Expected Revenue: Projected income from sales in the new market.
  • Operational Expenses: Ongoing costs of running the business in the new market.
  • Market Entry Costs: Initial investment required to enter the market.

Conceptual Guide:

  1. Conduct Thorough Market Research:
    • Understand the size of the market, customer demand, and competition.
    • Use data to project realistic sales figures and potential market share.
  2. Estimate Costs Accurately:
    • Include all potential costs, both one-time and ongoing, in the calculation.
    • Consider possible variations in costs due to local economic conditions or regulatory changes.
  3. Adjust for Local Variables:
    • Tailor your pricing strategy to local consumer expectations and purchasing power.
    • Anticipate fluctuations in revenue based on seasonality, economic trends, or political stability.
  4. Calculate and Compare:
    • Use the ROI formula to estimate the potential return from each market.
    • Compare these estimates across regions to prioritize markets with the highest potential return.
  5. Review and Reassess:
    • Regularly revisit your calculations as market conditions evolve.
    • Adjust strategies based on real-world performance and emerging opportunities or challenges.

Final Thoughts

Expanding internationally is not a one-size-fits-all endeavor; it requires a deep understanding of local markets, the flexibility to adapt strategies, and the strategic use of technology to connect with diverse audiences.

Brands that succeed on the international stage prioritize local insights, ensuring their offerings resonate with cultural nuances and consumer preferences. They balance global consistency with regional relevance, leveraging technology to gather real-time data and personalize their approach. Trust and reputation, built through transparency and ethical practices, are equally crucial as they foster long-lasting consumer relationships across borders.

The critical lesson for brands looking to expand globally is clear: adaptability is key. As markets continue to evolve, brands must remain agile, continuously refining their strategies to meet consumers’ shifting demands and expectations worldwide. Success in global markets isn’t just about entering new regions; it’s about sustaining that presence by staying attuned to each market’s unique challenges and opportunities. Those who can do so will thrive today and be well-positioned for long-term success in an increasingly interconnected world.

Have you ever wondered why obtaining a bank loan isn’t as easy as shopping online? Or why selecting a health insurance policy isn’t as quick as booking a hotel?

The modern consumer has higher expectations and is increasingly asking these questions. Brands that cater to these expectations stand to beat the competition and garner customer loyalty. 

So, if you think you know your competition, think again. 

A senior executive at IBM once captured the modern consumer’s needs: “The last best experience anyone has anywhere becomes the minimum expectation for the experience they want everywhere.” 

This statement challenges most executives’ understanding of competition —that they’re limited to major players or emerging brands in their industry. However, what if the real competition extends beyond your industry? How do brands craft a winning strategy when they’re not just competing with industry peers but also with ever-evolving customer expectations shaped by their best experiences in other sectors? 

In the past,, brands gauged their competition based on rivals within their industry. A car dealership compared itself to other car dealers, a bank to other banks. This approach, while logical, is increasingly becoming outdated. In a connected world where consumers can instantly compare services and products across sectors, their expectations are no longer siloed within industry lines.

A coffee shop isn’t just competing with the café next door but also with the fast, personalized service of tech firms or the immersive experience of a luxury retailer. This broader perspective on competition compels brands to innovate continually, not just in their product or service offerings but in customer experience, convenience, and reliability.

The story of Amazon epitomizes this change. Once an online bookstore, Amazon became a colossal e-commerce platform, challenging bookstores and retailers across countless sectors. Their competitive edge? Understanding and setting new benchmarks in customer expectations.

Most recently, Dubai International Airport set new benchmarks in its sector by introducing a new biometric system that allows travelers to Dubai to travel without a passport, which makes the experience more pleasant. 

Rethinking competition means brands must now consider how they stack up against the best experience a customer has had anywhere, not just against their traditional industry competitors. It’s a move from industry-focused to customer-experience-focused competition, a transition that requires a deep understanding of customer expectations far beyond industry boundaries.

Role of Market Research in Revealing True Competitors

Market research is integral to identifying a brand’s opportunities. It helps companies understand who they compete against and their customers’ evolving expectations. For instance, a fast-food chain might find its real competition lies not only with other fast-food outlets but with the expected experience whenever or whatever they buy.

Chick-fil-A, a U.S. fast-food chain known for its chicken sandwiches, redefined its customer service by looking beyond its immediate competitors in the fast-food industry. This venture was initiated through a partnership with Horst Schulze, the COO of Ritz-Carlton at the time, as the hotel chain is synonymous with luxury and exceptional customer service.

The Challenge:

Chick-fil-A was already performing well against its direct fast-food competitors. However, Schulze’s assessment that they were the “best of a bad lot” challenged them to aim higher, to compete not just with other fast-food chains but also with sit-down and fine-dining restaurants known for their superior customer service.

Market Research and Strategy:

To bridge this gap, Chick-fil-A executives thoroughly analyzed these higher-end dining experiences. They conducted surveys and customer feedback sessions to understand the most valued service elements in these settings. The result was the creation of the “Core 4” principles of customer service, focusing on creating eye contact, sharing smiles, using an enthusiastic tone, and personalizing customer interactions.

Image Courtesy: Chick-fil-a

Further Consultation with Danny Meyer:

Chick-fil-A didn’t stop with the insights from Ritz-Carlton. They also consulted with Danny Meyer of Union Square Hospitality Group, who is renowned for his hospitality expertise. Meyer, who later founded the popular fast-casual chain Shake Shack, worked with Chick-fil-A to deepen their understanding of hospitality, emphasizing the importance of going the extra mile in service, a relatively uncommon fast food concept.

Impact and Results:

Implementing these strategies led to a significant transformation within Chick-fil-A’s service model. As a Chick-fil-A executive noted, the impact on sales, profits, and overall customer engagement was profound. The adoption of “second-mile service” became a hallmark of Chick-fil-A, noticeably differentiating them from their traditional fast-food competitors.

Competitive Analysis Across Industries

Conducting a competitive analysis beyond your immediate industry is crucial. This broader approach can uncover valuable insights and innovative practices from various sectors, offering a more comprehensive view of the competitive terrain.

brand-analysis

How to Conduct a Cross-Industry Competitive Analysis

Identify Key Competitors in Other Industries: Identify companies in other sectors admired for customer service, innovation, or efficiency. These could be organizations your customers frequently compare you to, even if they are outside your direct line of business.

Gather Information: Utilize public resources like company websites, press releases, case studies, and industry reports to gather information about these competitors. Pay attention to their business models, customer engagement strategies, marketing approaches, and operational efficiencies.

Analyze Customer Reviews and Feedback: Look at customer reviews and feedback for these companies. Platforms like social media, online forums, and review sites can provide insights into what customers value in their experiences with these brands.

Study Their Service Delivery and Processes: Examine how these companies deliver their services or products. What makes their process stand out? How do they handle customer service, and what are their operational efficiencies?

Benchmark Against Best Practices: Compare these findings against your practices. This benchmarking should cover customer experience, service speed, technological adoption, and innovation.

SWOT Analysis: Conduct a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for both your company and the companies in other industries. This comparison can highlight areas for improvement and potential opportunities for your brand.

Learning from Best Practices in Different Sectors:

  • Adopting Technological Innovations: Look at how tech companies use technology to enhance customer experience and consider how you could implement similar technologies in your sector.
  • Customer Service Excellence: Study the customer service strategies of companies known for outstanding customer care, like luxury hotels or high-end retailers, and integrate applicable elements into your customer service approach.
  • Efficiency Models: Analyze the operational efficiency of companies in industries like manufacturing or logistics. Their practices could offer insights into streamlining your processes.
  • Innovative Marketing Strategies: Observe companies’ marketing tactics in creative industries or those that have successfully tapped into new customer segments.
  • Sustainability Practices: Learn from companies leading in sustainability and environmental responsibility. For instance, even if you are a beverage brand, you can learn from Patagonia, a clothing brand that is leading in sustainability. This could improve your company’s environmental impact and enhance your brand image.

Using Market Research to Adapt to Market Conditions and Customer Expectations

  • Continuous Market Monitoring: Regularly monitor market trends and consumer behavior to stay ahead of changes and adapt strategies accordingly. Through constant market research and monitoring, Nike remains innovative with new product lines. In recent years, Nike introduced athleisure wear in response to the growing fitness and casual lifestyle blending trend.
  • Feedback Loops: Establish mechanisms for continuous customer feedback to gauge the effectiveness of the implemented strategies and make adjustments as needed. For example, Xiaomi, a Chinese consumer electronics brand, utilizes a unique business model that heavily relies on customer feedback. They regularly update their smartphones and other electronic products based on consumer suggestions gathered through online forums and social media, ensuring they stay closely aligned with user needs and preferences.
  • Agility in Strategy Execution: Be prepared to quickly alter or refine strategies in response to market feedback or shifts in the competitive landscape. Faced with unprecedented challenges in the restaurant industry due to lockdowns and restrictions during the pandemic, McDonald’s swiftly adapted its approach. They expanded contactless ordering and delivery options, simplified their menu to streamline operations, introduced promotions, implemented rigorous safety measures for employees and customers, and engaged in community support efforts. This rapid response allowed McDonald’s to maintain its customer base, ensure employee safety, and serve as a dependable source of affordable food during a crisis, showcasing its ability to pivot and succeed in a changing market landscape.
  • Incorporating Technology: Leverage technology to enhance customer engagement, streamline operations, and gather data for ongoing market analysis. For example, Amazon has continuously leveraged technology to improve customer engagement and streamline operations. From its recommendation algorithms to the use of AI and robotics in its warehouses, Amazon uses technology to improve efficiency and the customer experience.
  • Sustainability and Social Responsibility: Integrate sustainable practices and social responsibility into business strategies, aligning with the increasing consumer emphasis on ethical and environmental considerations. For instance, Toyota has long been a leader in sustainability, particularly with its development of hybrid and electric vehicles like the Prius. Their commitment to reducing environmental impact through sustainable practices is a core part of their business strategy, aligning with global concerns about climate change.
beauty-trends

Final Thoughts —Use Customer Expectations as a Competitive Benchmark

Working with global brands across industries and geographies, we have uncovered a critical insight: many brands may not fully realize who their competitors are. As we’ve seen through various successful brand examples, your competitors may sometimes be different from the ones you’ve traditionally considered. Instead, they could be any brand or service that sets the expectations for your customers, often from entirely different industries.

Customers today are exposed to a wide range of services and products, from online retail giants to high-tech consumer electronics. The quality of service and efficiency they experience in one sector invariably shapes their expectations of others. This shift means a brand is no longer just competing within its industry but also against the best practices of sectors far removed from its own.

Market research emerges as a powerful tool in this scenario. It helps you understand what your customers expect based on industry standards and their best experiences in any sector. These expectations become your competitive benchmark. Whether it’s the seamless convenience of an app, the personalized service of a luxury hotel, or the efficiency of a tech giant, these are the standards against which your customers are measuring you.

Therefore, brands must engage in market research and competitive analysis continuously. This ongoing process will help you stay abreast of current market trends and customer expectations and allow you to anticipate future changes. Understanding and adapting to these evolving benchmarks allows your brand to remain competitive in a market reshaped by new players, technologies, and consumer behaviors.

Look beyond your industry, learn from the best in all sectors, and use these insights to refine and enhance your business strategies. This continuous market research and competitive analysis is essential for sustained success and growth in a rapidly changing market.

For more information on how to conduct a competitive analysis, contact us here.

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Sun Tzu once said, “Know thy self, know thy enemy. A thousand battles, a thousand victories.” While the quote from this ancient Chinese military strategist is about tactical warfare, it also highlights the importance of understanding your place in the market and the competition you face. 

In today’s world of global e-commerce, where sales amounted to over $5.7 trillion in 2022, businesses must conduct a competitive analysis to gain an edge. This article will delve into the essential steps of competitive analysis and show you how to leverage the insights gained to enhance your brand or product’s market position. Whether you’re a marketer, brand manager, or product manager, this post will provide the knowledge and tools to evaluate your business’s performance and stay ahead of the competition.

Identifying Competitors

The first step in conducting a competitive analysis is identifying your competitors. This includes direct competitors who offer similar products or services and indirect competitors who offer substitutes or alternatives to your offerings.

A direct competitor is a business that offers similar products or services and targets the same customer segments as another business. Direct competitors are often in direct competition for customers and market share. For example, Nike and Adidas are direct competitors in the athletic footwear and apparel market. Both companies offer similar products, such as running shoes, athletic wear, and accessories, and target the same customer segments, including athletes and fitness enthusiasts.

An indirect competitor is a business that offers products or services that are not the same as another business but still competes for customers in the same market. Indirect competitors can offer substitute products or services or cater to a slightly different customer segment. For example, Uber and public transportation services are indirect competitors. While they offer different products and services, they still compete for customers who need to travel from one place to another. In some cases, customers may choose to take public transportation instead of Uber, or vice versa, depending on convenience, cost, and availability.

One way to identify your competitors is to research your industry and market. Look for companies with similar products or services and a similar target audience. You can also ask your customers who they consider as alternatives to your brand or product.

Another method is to use online tools such as Google Trends, SEMrush, or SimilarWeb. These tools allow you to analyze the search volume and traffic of your competitors’ websites and their social media presence and marketing tactics.

Once you have identified your competitors, you must classify them and understand their strengths and weaknesses. This will help you gain insights into their strategies and how they are positioning themselves in the market. For example, if you’re a fitness app, your direct competitors may include other fitness apps such as Fitbit and MyFitnessPal, while your indirect competitors may include gyms or personal trainers. 

Understanding your competitors’ pricing strategies, marketing tactics, and features can help you differentiate your brand and attract more customers. A Harvard Business Review article emphasizes the importance of understanding competitors: “It’s not enough to know who your competitors are. You need to know how they think, what drives them, their goals and values, and their strengths and weaknesses.” By conducting a thorough competitive analysis, you can gain valuable insights into your competitors and use them to improve your business strategy.

Analyzing Competitors

Once you have identified your competitors, the next step is thoroughly analyzing their business strategy. This includes researching their products or services, pricing strategies, marketing tactics, and overall market position.

One way to analyze your competitors is to visit their websites and social media profiles. Look at the design and layout of their website, the features of their products or services, and their pricing strategy. Also, pay attention to their social media presence, including the type of content they share, how often they post, and their engagement with customers.

Another method is to purchase or use your competitors’ products or services. This will give you firsthand experience with their offerings and allow you to identify areas where you can differentiate your brand or product.

Additionally, you can conduct a SWOT analysis of your competitors. SWOT stands for strengths, weaknesses, opportunities, and threats. You can identify areas to improve your business strategy by analyzing your competitors’ strengths and weaknesses. Similarly, you can adapt your approach to changing market conditions by identifying opportunities and threats.

For example, let’s say you’re a restaurant owner, and your competitor is a nearby restaurant that offers similar cuisine. By analyzing their pricing strategy, menu offerings, and customer reviews, you discover they offer a more extensive menu and are priced slightly higher than your restaurant. You can use this information to differentiate your brand by providing a unique menu with higher-quality ingredients at a competitive price.

Evaluating Your Position

After analyzing your competitors, you must compare your position and strengths. This will help you identify areas where you can improve your business strategy and differentiate your brand or product from the competition.

One way to evaluate your position is to conduct a SWOT analysis of your business. This includes identifying your strengths, weaknesses, opportunities, and threats. By analyzing your strengths and weaknesses, you can identify areas to improve your business strategy. Similarly, you can adapt your strategy to changing market conditions by identifying opportunities and threats.

Another method is to analyze your customer feedback and reviews. Look for areas where your customers are particularly satisfied and where they think you can improve. This will give you insights into your strengths and weaknesses and help you understand how you’re perceived in the market.

Additionally, you can evaluate your pricing strategy and marketing tactics. Are you offering competitive prices for your products or services? Are your marketing efforts effective in reaching your target audience? By evaluating these aspects of your business, you can identify areas to improve and differentiate your brand.

For example, let’s say you’re a tech company that offers a productivity app. After analyzing your competitors, you may find that your app offers similar features to your competitors but at a lower price point. You can use this information to differentiate your brand by emphasizing the value of your app and targeting price-sensitive customers.

As business strategist Jay Abraham once said, “Your competitors can teach you everything you need to know about your own customers.” By evaluating your position and strengths compared to your competitors, you can gain valuable insights that will help you improve your business strategy and attract more customers.

Creating an Action Plan

Once you have conducted a competitive analysis and evaluated your position, it’s time to create an action plan leveraging the insights gained. An action plan should be a detailed roadmap of the steps you need to take to improve your brand or product’s market position.

One way to create an action plan is to prioritize the insights gained from your competitive analysis and evaluation. For example, if you’ve identified a weakness in your pricing strategy, you may prioritize adjusting your prices to be more competitive. Similarly, if you’ve identified an opportunity to target a new customer segment, you may prioritize developing a new marketing campaign to appeal to that segment.

Another method is to set specific goals and metrics to track progress. For example, if you’ve identified a weakness in your customer service, you may aim to improve your customer satisfaction ratings by a certain percentage within a specific timeframe.

It’s also important to allocate resources and assign responsibilities to implement the action plan effectively. This includes assigning tasks to specific team members, determining the budget required, and establishing timelines for each step of the plan.

A report by Forbes emphasizes the importance of having a concrete action plan, stating, “The key to success in competitive analysis is to turn insights into action.” By creating a detailed action plan, you can ensure that the insights gained from the competitive analysis are used to drive tangible results and improvements to your business.

The Importance of Regular Competitive Analysis

Competitive analysis is not a one-time event but a continuous process that should be conducted regularly. The market constantly changes, and new competitors and trends can emerge at any time. Regular competitive analysis can help businesses stay ahead and adapt their strategy to changing market conditions.

One way to stay on top of the competition is to set up a system for continuously monitoring and analyzing your competitors. This includes tracking their pricing strategy, product offerings, marketing campaigns, and customer feedback. By monitoring your competitors, you can identify changes in the market and adjust your strategy accordingly.

Regular competitive analysis also helps businesses identify potential threats and opportunities in the market. For example, if a new competitor enters the market, regular analysis can help you identify its strengths and weaknesses and adjust your strategy to compete effectively.

Additionally, regular competitive analysis can help businesses identify areas to improve their strategy. By analyzing your competitors’ strengths, you can identify areas where you may fall short and adjust your strategy accordingly.

A Real-Life Example of Competitive Analysis

Let’s take a look at a real-life example of how competitive analysis can help brands improve their market position:

Airbnb and Hotels

Airbnb and hotels are two accommodation options for travelers. Airbnb, founded in 2008, offers an online platform for people to rent out their homes, apartments, and other spaces to travelers. On the other hand, hotels offer traditional accommodation in a dedicated facility with various amenities and services.

SWOT Analysis of Airbnb

Strengths:

  1. Unique experiences: Airbnb offers unique and authentic experiences for travelers by allowing them to stay in local homes and neighborhoods.
  2. Low prices: Airbnb offers lower prices than traditional hotels, making it an attractive option for budget-conscious travelers.
  3. Innovative technology: Airbnb uses innovative technology, such as its search algorithm and messaging system, to enhance the customer experience.

Weaknesses:

  1. Quality control: Airbnb’s reliance on individual hosts can lead to inconsistent quality and standards across its listings.
  2. Legal and regulatory challenges: Airbnb has faced legal and regulatory challenges in several cities, which can limit its growth opportunities.
  3. Limited services: Airbnb offers limited services compared to hotels, such as room service and housekeeping.

Opportunities:

  1. Expansion into new markets: Airbnb can expand its offerings to include new types of accommodations, such as boutique hotels or bed and breakfasts.
  2. Partnerships with tourism boards: Airbnb can partner with tourism boards to promote local tourism and offer unique experiences.
  3. Personalization: Airbnb can use data and technology to personalize its offerings and customer recommendations.

Threats:

  1. Competition from traditional hotels: Traditional hotels are increasing their focus on offering unique and authentic experiences to compete with Airbnb.
  2. Safety concerns: Safety concerns like theft and vandalism can impact the customer experience and damage Airbnb’s reputation.
  3. Economic downturns: Economic downturns can impact travel and tourism, impacting Airbnb’s business.

SWOT Analysis of Hotels:

Strengths:

  1. Established brand reputation: Hotels have a well-established brand reputation and are a trusted accommodation option for travelers.
  2. Wide range of services and amenities: Hotels offer a wide range of services and amenities, such as room service and housekeeping, to enhance the customer experience.
  3. Consistent quality: Hotels offer consistent quality and standards across their properties.

Weaknesses:

  1. High prices: Hotels can be more expensive than other accommodation options, making them less attractive to budget-conscious travelers.
  2. Lack of personalization: Hotels can be less personalized than Airbnb, as they offer a more standardized experience.
  3. Limited local experiences: Hotels can lack the unique local experiences that Airbnb offers, as they are often located in tourist areas.

Opportunities:

  1. Focus on unique experiences: Hotels can offer unique and authentic experiences to compete with Airbnb.
  2. Partnerships with local businesses: Hotels can partner with local companies to offer unique experiences and enhance the customer experience.
  3. Personalization: Hotels can use data and technology to personalize their offerings and customer recommendations.

Threats:

  1. Competition from Airbnb: Airbnb’s unique offerings and lower prices can attract customers away from traditional hotels.
  2. Economic downturns: Economic downturns can impact travel and tourism, impacting hotels’ business.
  3. Safety concerns: Safety concerns, such as crime and terrorism, can impact the customer experience and damage hotels’ reputations.

When Airbnb entered the market, it disrupted the traditional hotel industry. Initially, hotels underestimated Airbnb’s impact and did not conduct a competitive analysis to understand the company’s strategy. 

However, as Airbnb’s popularity grew, hotels began recognizing the threat and adapted their strategy to compete. Hotels started to offer more unique and local experiences to attract customers, a strategy that Airbnb had successfully implemented. Additionally, hotels invested in technology to enhance the guest experience and offer more personalized service. 

Some hotels also started to offer short-term rentals and home-sharing services to compete with Airbnb directly.

One example of a hotel that successfully adapted its strategy to compete with Airbnb is Marriott International. In 2019, Marriott launched its Homes & Villas program, offering high-end home rentals in more than 100 destinations worldwide. By providing unique and local experiences, personalized service, and home-like amenities, Marriott was able to attract customers who might otherwise have booked with Airbnb.

Overall, the success of Airbnb has demonstrated the importance of conducting competitive analysis and staying up-to-date on industry trends and developments. By understanding the competition and adapting their strategy accordingly, brands can stay ahead of the curve and drive business success.

Lessons Learned

The case study of Airbnb vs. hotels provides valuable lessons for businesses in any industry. Here are a few key takeaways:

  1. Disruption can come from unexpected sources: Hotels initially underestimated Airbnb’s impact and did not conduct competitive analysis to understand the company’s strategy. As a result, they were caught off guard when Airbnb disrupted the industry.
  2. Adaptability is key: Hotels eventually adapted their strategy to compete with Airbnb, offering more unique and local experiences to attract customers. This shows the importance of adaptability and willingness to change your strategy when faced with new competitors or market conditions.
  3. Customer preferences are changing: Airbnb’s success is partly due to customers’ changing preferences, who are increasingly seeking unique and authentic experiences. This highlights the importance of understanding your customers’ preferences and adapting your strategy to meet their needs.
  4. Innovation can create new opportunities: Airbnb’s success has created new opportunities for other businesses, such as property management companies specializing in short-term rentals. This shows the potential for innovation to develop new business models and opportunities in any industry.

In conclusion, the case study of Airbnb vs. hotels highlights the importance of conducting competitive analysis, being adaptable, understanding customers’ preferences, and embracing innovation. By applying these lessons to your brand, you can stay ahead of the competition and drive business success.

Examples of Successful Competitive Analysis

Competitive analysis is a powerful tool that can help businesses gain a competitive advantage in their industry. Here are a few examples of companies that have successfully used competitive analysis to improve their strategy and gain a stronger market position:

  1. Coca-Cola vs. Pepsi: For decades, Coca-Cola and Pepsi have been locked in fierce competition for market share. In the early 2000s, Coca-Cola conducted a comprehensive competitive analysis of Pepsi, analyzing everything from its marketing campaigns to its pricing strategy. As a result, Coca-Cola developed a new marketing campaign emphasizing the brand’s history and nostalgia, which helped them gain a stronger foothold in the market.
  2. Netflix vs. Blockbuster: In the early 2000s, Netflix was a relatively unknown startup that offered a subscription-based DVD rental service. At the time, Blockbuster was the dominant player in the video rental market. However, Netflix conducted a thorough competitive analysis of Blockbuster, identifying weaknesses in its strategy and opportunities for growth. Netflix then shifted its focus to streaming video, which ultimately allowed them to overtake Blockbuster and become the dominant player in the market.
  3. Amazon vs. Barnes & Noble: In the 1990s, Barnes & Noble was the largest bookstore chain in the United States. However, with the rise of e-commerce, Amazon quickly emerged as a formidable competitor. Amazon conducted a thorough competitive analysis of Barnes & Noble, identifying opportunities to improve their online shopping experience and offer a wider selection of products. As a result, Amazon was able to outmaneuver Barnes & Noble and become the dominant player in the book industry.

Tools and Resources for Conducting Competitive Analysis

Conducting competitive analysis can be a complex and time-consuming process. Fortunately, many tools and resources are available to help brands conduct competitive analysis effectively. Here are a few examples:

  1. Competitive analysis templates: Many business and marketing websites offer free or paid templates for conducting competitive analysis. These templates provide a framework for identifying and analyzing your competitors’ strengths and weaknesses and opportunities and threats in the market.
  2. Industry reports: Industry reports provide valuable data and insights into the competitive landscape of a particular industry. These reports may include information on market share, pricing trends, consumer preferences, and more. They can be purchased from market research firms or industry associations.
  3. Online tools: Many online tools are available to help businesses conduct competitive analysis, such as SEMrush for analyzing online advertising and search engine rankings and SimilarWeb for analyzing website traffic and engagement.
  4. Social media analytics: Social media platforms offer valuable data on customer sentiment, engagement, and trends. You can gain insights into your marketing strategy and customer preferences by analyzing your competitors’ social media presence.
  5. Market Research Agencies: Hiring an expert market research agency can be a valuable investment for businesses that lack the expertise or resources to conduct competitive analysis in-house. Agencies can provide a deep understanding of your industry and competitors and insights into emerging trends and opportunities.

Tips for Staying Ahead of the Competition

Conducting competitive analysis is an essential part of developing a successful business strategy. However, it’s not enough to simply analyze your competitors – you also need to use the insights gained to stay ahead of the competition. Here are a few tips for staying ahead:

  1. Stay up-to-date on industry trends: Keeping up with the latest trends and developments in your industry can help you anticipate changes in the market and stay ahead of the competition. Subscribe to industry newsletters, attend conferences and trade shows, and follow industry leaders on social media to stay informed.
  2. Focus on customer needs: While it’s essential to understand your competitors’ strategies, it’s even more critical to understand your customers’ needs and preferences. Conducting market research and gathering customer feedback can help you tailor your products and services to meet their needs and gain a competitive edge.
  3. Invest in innovation: Innovation can help you differentiate your business and stay ahead of the competition. Invest in research and development, experiment with new technologies and business models, and encourage a culture of innovation within your organization.
  4. Build strong partnerships: Building strong partnerships with other businesses can help you expand your reach and offer more value to your customers. Look for opportunities to partner with companies that complement your own, such as suppliers, distributors, or complementary service providers.
  5. Embrace change: Finally, it’s essential to be flexible and adaptable in the face of change. The business landscape is constantly evolving, and it’s important to be willing to pivot your strategy when necessary to stay ahead of the competition.

Challenges and Limitations of Competitive Analysis

While competitive analysis is a valuable tool for businesses to evaluate their position in the market and gain a competitive advantage, it’s essential to approach this process with a critical and realistic perspective. Here are a few challenges and limitations of competitive analysis:

  1. Difficulty obtaining accurate data: Competitors may not always disclose accurate or complete information about their strategy or performance. This can make it challenging to get accurate data and insights about their strengths and weaknesses.
  2. Risk of focusing too much on competitors: Focusing too much on competitors can sometimes lead businesses to overlook the needs and preferences of their customers. It’s essential to strike a balance between understanding your competitors’ strategies and staying focused on your value proposition.
  3. Limitations of industry reports: While they can provide valuable data and insights into the competitive landscape, industry reports may not always be up-to-date or relevant to your business. It’s vital to supplement industry reports with independent research and analysis.
  4. Rapidly changing market conditions: The business landscape constantly evolves, and competitors may adopt new strategies or technologies that disrupt the market. It’s important to stay agile and adaptable in the face of change and to update your competitive analysis to reflect new developments regularly.
  5. Risk of overreliance on competitive analysis: Competitive analysis is just one tool in a business’s arsenal. It’s crucial to supplement competitive analysis with other types of research, such as customer feedback and market research, to gain a complete picture of the market and stay ahead of the competition.

Future Trends in Competitive Analysis

As the business landscape evolves, new trends and technologies change how businesses conduct competitive analysis. Here are a few emerging trends to watch:

  1. Artificial intelligence: Artificial intelligence (AI) is revolutionizing many aspects of business, including competitive analysis. AI-powered tools can analyze vast amounts of data and identify patterns and trends that human analysts might miss. They can also provide real-time insights into competitors’ pricing strategies, marketing campaigns, and more.
  2. Social media analytics: Social media platforms offer a wealth of data on customer sentiment, engagement, and trends. By analyzing this data, businesses can gain insights into their competitors’ marketing strategies and customer preferences. Social media analytics tools are becoming increasingly sophisticated, making it easier for companies to conduct competitive analyses on these platforms.
  3. Predictive analytics: Predictive analytics uses data, statistical algorithms, and machine learning to identify future outcomes based on historical data. This technology is becoming increasingly important in competitive analysis, allowing businesses to anticipate changes in the market and stay ahead of the competition.
  4. Big data analytics: The amount of data available to businesses is growing exponentially, and big data analytics is becoming increasingly important in competitive analysis. Big data analytics tools can help companies to identify patterns and trends in large data sets, providing valuable insights into competitors’ strategies and market trends.
  5. Collaboration and knowledge sharing: Finally, business collaboration and knowledge sharing are becoming increasingly important in competitive analysis. By sharing information and insights with other businesses in their industry, companies can gain a more complete picture of the market and identify opportunities for growth and innovation.

The Role of Market Research in Competitive Analysis

Market research plays a critical role in competitive analysis. By gathering data on customer needs and preferences, market trends, and competitor strategies, businesses can gain valuable insights into the competitive landscape and develop a strategy that sets them apart. Here are a few reasons why outsourcing market research to an external agency can be a good idea:

  1. Access to expertise and resources: Market research agencies specialize in gathering and analyzing data and have access to sophisticated tools and resources for conducting research. By outsourcing market research to an external agency, businesses can tap into this expertise and gain a complete picture of the market.
  2. Objectivity and impartiality: Market research agencies are independent from the businesses they serve, which allows them to provide unbiased and objective insights into the market. This can be especially valuable in competitive analysis, where an objective perspective is critical for identifying strengths and weaknesses in the market.
  3. Cost-effectiveness: Conducting market research in-house can be expensive, especially for small businesses. Outsourcing market research to an external agency can be cost-effective, as agencies can provide access to tools and expertise that might otherwise be prohibitively expensive.
  4. Time-saving: Market research can be time-consuming, especially for businesses with limited resources. Outsourcing market research to an external agency frees up time and resources to focus on other aspects of their strategy.
  5. Flexibility: Market research agencies can offer various research services, from online surveys to focus groups to ethnographic research. This allows businesses to choose the best research methods for their needs and budget.

Outsourcing market research to an external agency can be a good idea for brands looking to conduct competitive analysis. By tapping into market research agencies’ expertise, resources, and objectivity, businesses can gain valuable insights into the market and develop a strategy that sets them apart from the competition.

Key Takeaways

Competitive analysis is a valuable tool for brands seeking a competitive advantage in their industry. By identifying their competitors’ strengths and weaknesses, opportunities, and threats in the market, businesses can develop a strategy that sets them apart from the competition. However, it’s essential to approach competitive analysis with a critical and realistic perspective and use the insights gained to inform your strategy and decision-making effectively.

  • Competitive analysis is valuable for gaining a competitive advantage in your industry.
  • It’s essential to balance understanding your competitors’ strategies and staying focused on your value proposition.
  • Market research is critical in competitive analysis, and outsourcing to an external agency can be a cost-effective and efficient solution.
  • Businesses should stay up-to-date on emerging trends and technologies in competitive analysis, such as artificial intelligence and social media analytics.
  • Finally, businesses should be flexible and adaptable in the face of change and regularly update their competitive analysis to reflect new developments in the market.
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In today’s rapidly changing and highly competitive business environment, companies must remain vigilant to stay ahead of their competitors. This is where competitive intelligence (CI) comes into play. 

Competitive intelligence gathering is a systematic and ethical process of collecting, analyzing, and using information about one’s competitors, market, industry, and customers to gain a competitive advantage. 

CI involves collecting information about competitors’ strengths, weaknesses, opportunities, and threats, as well as their strategies and tactics. CI helps companies to anticipate market changes and to react quickly to new developments. It also helps companies to make informed decisions by providing them with the latest market and industry trends within the competitive landscape. 

Competitive intelligence research helps companies identify their brand’s opportunities and threats, understand customer needs and preferences, and develop strategies aligned with their competitive environment.

The history of competitive intelligence can be traced back to the early 20th century when companies began to use market research to gather information about their competitors. Over the years, the methods and tools used for competitive intelligence have evolved and become more sophisticated.

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Modern technology has dramatically impacted competitive intelligence market research by making it easier to gather and analyze large amounts of data. For example, the internet and social media have made gathering information about competitors and industry trends easier.

Competitive intelligence is also known as business intelligence, competitive analysis, and market intelligence.

The person or team responsible for gathering competitive intelligence in an organization can vary, but it is typically a combination of marketing, research, and strategy departments.

Methods of Competitive Intelligence Gathering

There are several methods of gathering competitive intelligence, including primary and secondary sources.

Primary sources include direct interaction with customers, employees, and suppliers, as well as online forums, surveys, and interviews. These methods allow companies to gather first-hand information about the market, customer needs and preferences, and the competitive landscape.

Secondary sources include publicly available information such as financial reports, news articles, government reports, and industry publications. This type of information provides a comprehensive view of the market, industry, and competitors.

Competitive Intelligence Framework

The competitive intelligence framework is the process by which companies gather, analyze, and use information to make informed decisions. The framework consists of four stages: collection, analysis, dissemination, and action.

The collection stage involves gathering information from both primary and secondary sources. This information must be relevant, accurate, and up-to-date.

The analysis stage involves the interpretation of the collected information. This is where the information is evaluated and compared to the company’s current position and objectives.

The dissemination stage involves the distribution of the analyzed information to key stakeholders. This includes senior management, department heads, and employees.

The action stage involves the development of strategies and tactics based on the analyzed information. This stage also involves the implementation of these strategies and tactics.

Legality and Ethics of Competitive Intelligence Gathering

While competitive intelligence gathering is a valuable tool for companies, it is important to note that there are legal and ethical considerations.

Companies must ensure that the information they collect and use is obtained legally and ethically. This includes avoiding the use of insider information or confidential information obtained through unethical means.

Gathering Competitive Intelligence 

Competitive intelligence research analyzes various sources, including financial reports, news articles, and company websites. The quality of the competitive intelligence gathered is determined by the information’s relevance, accuracy, and timeliness.

When gathering competitive intelligence, it is essential to research various areas, including the products and services offered by competitors, their pricing strategies, marketing tactics, and distribution channels. Researching the competitive landscape, including industry trends and market conditions, is also important.

The number of companies or brands included in competitive intelligence research can vary depending on the size and complexity of the industry. Generally, it is important to have the top competitors and any new or emerging players in the market.

When gathering competitive intelligence, it is crucial to be aware of legal considerations, such as antitrust and intellectual property laws. It is also important to consider ethical issues, such as using confidential or proprietary information.

Due to language barriers and cultural differences, gathering competitive intelligence in international or foreign markets can be more challenging. However, tools and resources are available to help with this, such as translation software and market research firms with international expertise.

To determine if the information gathered in competitive intelligence is correct and trustworthy, it is essential to verify the data from multiple sources and consider the source’s credibility.

Several types of competitive intelligence exist, including customer, product, and competitor intelligence.

The frequency at which brands and companies conduct competitive intelligence can vary depending on their industry and business objectives. Some companies may conduct competitive intelligence regularly, such as monthly or quarterly. In contrast, others may only conduct it occasionally, such as when preparing for a product launch or entering a new market.

If a company is in a rapidly changing industry, such as technology, it may be beneficial to conduct competitive intelligence more frequently to stay up-to-date with the latest developments. On the other hand, if a company is in a more stable industry, such as consumer goods, it may be sufficient to conduct competitive intelligence on a less frequent basis.

Using Market Research Firms

Many companies work with third-party market research firms to gather and analyze competitive intelligence. These firms have the expertise and resources to provide companies with comprehensive and up-to-date information about the market, industry, and competitors. They can also provide valuable insights and analysis to help companies make informed decisions.

Working with a market research firm also offers several benefits. These agencies have the resources and expertise to gather and analyze large amounts of data, and they can provide a comprehensive view of the market and competitive landscape. They can also provide objective and impartial insights, as they are not influenced by the company’s internal biases or preconceptions.

A market research agency can help brands with competitive intelligence in several ways. Some of the services they may offer include:

  1. Competitor analysis: A market research agency can help brands gather and analyze information about their competitors, including their products, services, pricing, marketing, and distribution strategies.
  2. Industry trends: A market research agency can help brands stay informed about industry trends and changes in the competitive landscape.
  3. Customer insights: A market research agency can help brands gather and analyze information about their customers, including their needs, preferences, and purchasing behaviors.
  4. Consumer research: A market research agency can help brands conduct consumer research to gather feedback on their products and services and identify areas for improvement.
  5. Custom research: A market research agency can help brands conduct custom research to gather information on specific topics or issues relevant to their business.

Whether it is better to conduct competitive intelligence in-house or by using outside resources such as a market research agency depends on the resources and expertise available within the organization.

Conducting competitive intelligence in-house can be beneficial because it allows organizations to control the research process and keep the information confidential. However, it can also be more time-consuming and may require specialized expertise.

Using a market research agency can be beneficial because it allows organizations to tap into the expertise and resources of the agency, as well as access a broader range of data collection and analytical tools. However, it can be more expensive and may require sharing some confidential information.

Overall, it’s important for brands to carefully evaluate their own resources and needs before deciding whether to conduct competitive intelligence in-house or by using outside resources like a market research agency. Both options have pros and cons, and the best approach will depend on the organization’s specific circumstances.

Just like reaching an unknown destination without a map is difficult, so is building a business strategy without competitive intelligence. 

Competitive intelligence helps brands shape their product development, distribution channels, pricing, messaging, positioning, brand promotions, and features. It allows brands to identify their challenges and opportunities in the market in relation to their competition, so they can see what their competitors are doing and differentiate themselves from them. 

What is competitive intelligence (CI)?

Competitive intelligence refers to any intentional research where brands collect, analyze, and utilize data and information gathered on their competitors, customers, and other external factors, potentially providing brands with a competitive advantage.

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When brands ethically and legally collect competitive intelligence, it can help boost the organization’s decision-making capabilities. The goal of any competitive intelligence study is to create a business plan and strategy so organizations can make well-informed decisions based on market considerations.

Competitive intelligence goes beyond knowing the competition; the process is designed to take a deep dive to unravel the finer points of the competitor’s target markets and business strategy. 

The Japanese auto industry carried out a compelling competitive intelligence study in the 1970s. The Japanese automobile industry analyzed the U.S. automobile market to discover a need for smaller, more fuel-efficient cars in a country where gasoline prices were rising. Using competitive intelligence across its borders, Japanese automakers identified a critical trend to beat their competition in the U.S. 

Competitive intelligence plays a vital role in all major departments of an organization and can take on a different meaning for each department or function. For instance, for a product development team, competitive intelligence may mean new features being added to products. For a sales executive, it may be helpful to know how to create a winning proposal. For leadership, it may be understanding the competitor’s marketing strategies so they can craft a plan to gain more foothold in the market.

Competitive Intelligence studies and exercises can be tactical (shorter-term) or strategic (longer-term). The goal of tactical competitive intelligence studies, for instance, can be to obtain insights into increasing revenues or gaining market share. At the same time, strategic or longer-term reporting focuses on significant risks, threats, and opportunities, present or emerging. 

A competitive intelligence study typically includes a wealth of information and insights from various sources, like government records, online mentions, social media, trade shows and journals, customer data and interviews, and traditional news media, to name a few. These sources are easily accessible and form the starting point for the studies. More in-depth information from distributors, suppliers, competitors, and customers is needed to make truly informed decisions. 

What are the key benefits of competitive intelligence?

There is no substitute for Competitive intelligence research when it is undertaken with care and diligence. It is a powerful tool for brands to gain market share, boost revenue, and continue to build the right products at competitive prices.

Here are some key benefits of using competitive intelligence for brands:

#1. Ability to predict patterns and emerging trends

As brands excavate an enormous amount of data and insights related to their competitor’s activities, they begin to identify and foresee emerging trends in the industry. This allows brands to gain deep foresight to make informed decisions and strategic business plans. 

#2. Aids in brand positioning

As brands gather insights and data about the competitive landscape, they also gain clarity on their activities and messaging. It helps them understand what works and doesn’t and cement their marketing. 

#3. Helps make more informed decisions.

When brands unearth information, they gain critical insights into how the customers feel about their brand and the competing brands. This gives brands a better view of their customers’ wants and how their competitors are meeting the needs of the target markets. 

#4. Boosts returns and profits

When you have a good understanding of the strategies and tactics employed by your competition and how they are performing, you will be better able to invest in areas that bring the highest returns, reducing risks and boosting profits.

Going back to the definition of Competitive Intelligence, we can see three necessary steps: “collect, analyze, and use competitor and market information to make informed decisions.”

Collecting data

There are many ways of unearthing relevant competitor data legally and ethically. Searching for information online may seem rudimentary, but it can provide invaluable information about the competitors and their activities. This information is readily available and accessible on the internet and is considered low-hanging fruit. With a few simple web searches, you can find great information on what the competitor is doing and what it has done in the past. You can also learn about product features, pricing, innovations, leadership, and important news and announcements relevant to your competition. There are tools that provide insight into the competitor’s search engine optimization activities and their online advertising efforts. 

From here, brands often go deeper and beyond the internet to analyze target markets and customer segments. Brands use quantitative and qualitative market research to gain more market insight. 

Brands use data to analyze their competition beyond the simple search process. This entails going through endless data and making sense of it all can become cumbersome. This is where data mining comes into play. Besides gathering data from third-party sources, brands also gather human intelligence by interviewing relevant people, including customers and past suppliers. This is a time-consuming process and must be undertaken by experts in market research to ensure it is done ethically and legally.  

Analyzing data

Analysis of data is a crucial step in the competitive intelligence process. Once brands collect data, it needs to be analyzed carefully to provide actionable insights. This allows brands to understand the patterns and separate them from the outliers. 

The analysis aims to uncover strengths, weaknesses, opportunities, and threats as they relate to the competitive landscape. Therefore, collecting and analyzing information from disparate sources is essential in verifying their authenticity and validity. This helps us move away from making assumptions and gaining real insights from more accurate pieces of data. 

Crafting a strategy 

Once a brand has enough verified data and information on its competitors and strategies, it can utilize it to differentiate itself and make informed decisions regarding product, price, messaging, and other essential aspects. It allows brands to weigh the competitor’s strengths, weaknesses, and opportunities in relation to their own to gain a competitive advantage.

For instance, pricing is an important area for differentiation but can only be done right if everything is studied and taken into account to find the right price that is profitable and aligns with the customer’s perceived value of a brand or product offering. Therefore, a successful price is not about pricing your product at the same or lower price than your competitor but positioning your brand as the choice that provides the greatest value. And to make that happen, you need to know the price of competing products and their perceived value in the buyer’s mind. This calls for a thorough study and analysis of the competing products, markets, and consumers. 

Today, e-commerce companies use sophisticated software for competitive pricing due to the market’s highly competitive and dynamic nature. Read more on how e-commerce brands utilize price monitoring software technology to track competitor pricing here.

To get the complete picture, brands may conduct competitive intelligence surveys. They can define their target audience and use various demographic and psychographic questions to identify consumer behavior. These also include questions about competing products and services. You may also use ranking and rating type questions and identify any unmet needs or gaps in the marketplace or use open-ended questions to get a more in-depth view of the consumer’s mind. Brand recall and recognition surveys are also helpful in gaining consumer perception of various brands. For instance, a sparkling water brand may ask: “When you think of bottled sparkling water, what brand comes to mind first?” This can help brands discover how frequently their brand is mentioned compared to competing brands in the category.

When armed with the powerful insights gained through competitive intelligence, brands can be more strategic in all aspects of business, from product development to pricing and distribution. By differentiating themselves from competitors, they can gain valuable market share, grow brand value, and brand equity, and boost their return on investment (ROI).

Like virtually all aspects of modern life, the market research industry has undergone an explosive change in our COVID-19 pandemic era. While most of the principles of market research remain intact, brands worldwide have had to refine and modify their research methods as part of this “new reality.” 

Generally speaking, market research starts with a “wide-angle” look at the spheres of influence upon a market (including new and changing customer behaviors, emerging industry trends, etc.), then zooms in on specific nuances within a target audience. 

The data collection and analysis gained from in-depth market research offer brands “a clear and detailed understanding of what your customers want, what they already like, where they conduct their own research, and much more.” Understanding the broader context of a market enables companies to:

  • Gain insights into how customers use their products or services
  • Differentiate their offerings from competitors
  • Lay the groundwork for successful product upgrades or launches
  • Identify new opportunities for growth

These insights gained can set the tone and messaging for a brand’s marketing efforts both now and in the year to come. 

Here’s a look at key trends in the market research industry today and what lies ahead on the horizon for 2022.

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Trend #1: Agility and Technology

Despite the changes wrought by the pandemic and other global forces, one factor remains constant: the continual evolution of technology underpinning advanced market research.

Advances in artificial intelligence (AI) and machine learning, for example, enable researchers to gather information from an increasingly wide range of distinct sources. These advances also contribute to a new emphasis on agile research and speed of insight. Various elements include:

Automation of routine research practices. Automating the more routine facets of research facilitates a speedier analysis and interpretation of findings. This helps researchers save considerable time and effort while winnowing down to what’s truly essential in their work. 

Shorter and smarter polls and surveys. Employing surveys that can be positioned and distributed quickly (and which take respondents only a short time to fill out) are a further boon to the speed of analysis and insight. This approach involves identifying a “mobile-reliant” population that will actively engage in a poll or survey upon request, and within a brief period of time. 

Ongoing research. Agile research equals ongoing research. In a global marketplace that’s continuously in flux, the insights garnered from one survey can dramatically change by the time a new survey is undertaken. In the same respect, researchers can expand on findings garnered from one survey to craft a new, more specialized survey that focuses on changing factors in the marketplace.

As we have stated before, “when you know your offerings suit current and emerging customer needs, your business will develop a reputation for being wholly customer-centric that your competitors can’t match.”

Trend #2: AI, Machine Learning, and Emotion

If 2021 is any guide, we can expect the avalanche of raw data to keep increasing in the year to come. The vast array of sources promises to generate more information than researchers can ever hope to compile and analyze on their own. That’s why AI and machine learning are invaluable for research purposes.

Emotion AI, for example, seeks to “decode” human emotion by analyzing voice patterns, eye movements, facial expressions, and a range of non-verbal cues—all designed to generate data that enhances a brand’s capacity for linking emotion to consumer behavioral patterns. By evaluating consumer responses to a proposed upgrade or new product launch, emotion AI can more precisely “read” human feelings and gauge the success or failure of a new venture.

As MIT Sloan notes, “New artificial intelligence technologies are learning and recognizing human emotions, and using that knowledge to improve everything from marketing campaigns to health care.”

Trend #3: Social Listening

Interacting directly with customers often yields the most pertinent data for marketing trends. But engaging in social listening can be an equally effective research method.

Social listening involves analyzing social media conversations and trends related to your brand to your industry. This extends beyond monitoring basic metrics such as “likes” or “mentions” or “followers,” with a focus instead on the buyer’s mood behind the data.

Customers frequently express their sentiments about products and services on popular social media platforms (Twitter, Facebook, Instagram, etc.). Market researchers can look at this as real-time feedback about customer preferences, brand awareness, the inroads made by competitors, etc. 

In this respect, social listening offers a beneficial way of gauging customer sentiment (what they like and don’t like about the purchasing experience, preferences regarding how a purchase is made, and so on). 

For effective social listening, research methodology can include the following actions:

  • Search on the most popular social platforms for branded keywords, phrases, or product names.
  • Explore customer review sections on platforms. 
  • Learn about customer sentiments regarding competitors.
  • Anticipate potential new trends using Google Trends or other social media listening tools.
  • Identify relevant or industry-specific social media influencers.

Social listening should be “a critical component of any company’s marketing strategy, as it allows you to react and respond to customer sentiment — and gather data to make improvements in the way your business runs,” notes Reputation.com. In essence, social listening is like “your very own perpetual focus group, rich with constantly updated and actionable business intelligence.”

Trend #4: Longitudinal Studies

There has been a steady increase in longitudinal studies for long-range market research, and the trend will continue in 2022. This approach works most effectively when a brand wishes to continuously monitor a fixed sample of its target audience over a pre-determined timeframe.

Longitudinal studies, also known as continuous research, tracks consumer and market attitude trends over extended periods. To do so, researchers gather information from the same sources through a long-term methodology that yields insights into buying habits or consumer response to a new product or service launch. 

Trend #5: DIY

Another emerging trend is the do-it-yourself (DIY) approach to market research. The proliferation of agile or smart research tools enables in-house teams to conduct surveys and other research activities, often using a centralized online platform. Types of DIY market research include:

  • Interviews with existing and potential customers through surveys, questionnaires, or focus groups
  • Segmentation of the target audience into clearly defined groups (demographic, behavioral, psychographic, and geographic)
  • Product testing, in many cases, before a brand reaches the initial production stage
  • Measuring satisfaction with loyal customers

DIY research should aim for gaining “insights into how happy your customers are and any specific areas they like or dislike.” This enables brands to:

  • Identify any areas of current (or potential) concern.
  • Drill down to core issues by identifying (and then interacting with) dissatisfied customers.
  • Determine what’s needed to improve customer attitudes and experiences. 

One caveat worth mentioning regarding DIY marketing. As Forbes notes, “if you go to a third party [for market research], you’re going to likely get a different perspective than what you would get from your own team. There’s also a greater chance that the perspective you receive is an unbiased one, which is healthy” and potentially more insightful about what a target audience truly cares about.”

Trend #6: Aligning Brand Mission and Values with Customers

In 2022 and beyond, market research will continue to explore the value of aligning a company’s mission statement and the values of its customer base. 

Gone are the days when a brand could tell consumers what it stands for and leave it at that. Today’s savvy customers do their research to determine if a brand “walks the walk,” particularly concerning those values consumers hold dear—be it the environment and sustainability, income inequality, racial harmony, and so on. 

Consumers who prefer brands aligned with their values often become very loyal once they identify that brand. However, if and when customers detect a lack of consistency between what’s expressed in a mission statement and what actions a brand takes, they may abandon that company and seek out more compatible businesses to support.

In 2022, brands are encouraged to take a fresh look at their mission and values and how these are communicated to a target audience. Monitoring social media conversations around these values can illuminate the process of refining a company’s mission statement. It’s also an excellent opportunity to look into making a fresh commitment to support the causes and initiatives that a brand’s audience considers most valuable in their own lives.

Market research trends come and go, but the end result remains consistent from the past to the future. The primary objectives are always:

  • Improving products or services
  • Generating more sales
  • Delivering expected results
  • Enhancing customer service
  • Boosting customer retention

Market research supports the need for brands to maintain agility in an ever-shifting marketplace. Customer needs never remain static. If a brand meets current needs—and, better yet, anticipates future customer needs—its place in the global market will be stronger and more durable than that of its competitors.

Big data and advanced analytics are hot. Voluminous sets of data can be processed automatically using technology. But the data becomes useful only when it is converted into meaningful information. While Big Data has become the buzzword today, it is of little use if it’s not profitably analyzed.

The global Big Data and Analytics market is worth USD 274 billion. Around 2.5 quintillion bytes worth of data is generated each day. There are currently over 44 zettabytes of data in the entire digital universe.

So what is big data exactly, and how does it impact companies?

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Big data refers to large sets of data obtained from multiple sources, like medical records, government records, customer databases, mobile applications, search engines, business transactions, social networks, and other massive data sources. Big data may be structured or unstructured, allowing brands to manage large amounts of data more efficiently. Many organizations are moving away from legacy systems and consolidating data to make the research process seamless, cost-effective, and efficient. 

Technologies like text analytics help market researchers examine large amounts of information and data in real-time to track consumers’ sentiments and detect potential brand reputation issues before they become serious. 

Big data market research is invaluable for brands as it combines consumer and behavioral data with advanced analytics to enable faster decision-making that yields improved business outcomes. When big data and market research converge, everyone wins because it results in better, more relevant products and services for the consumer and a competitive advantage for the brand.

Big data and market research convergence allow brands to dig into data to uncover the “why” behind the numbers. Let’s say, for instance, a brand uses data mining to discover a sudden decline in the market share for a high-end product in a specific market. Using market research methodologies, it studies a sample of consumers that have exhibited a change in buying behavior to unearth what led to the change. Was it a new product that entered the market, or did they reduce spending due to the economic climate?

These reasons are not presented in the data, and market research can help uncover the “why” behind a data set. 

Today, the digital consumption of information, products, and media makes everything measurable on a large scale. Social media analytics is an example of big data used on a massive scale globally. 

How does big data impact business?

A 2020 study showed that around 94 percent of organizations believe data and analytics are essential to growing their brand and supporting digital transformation. The study also found that the financial, hospitality, telecoms, and retail industries invest the most in big data and analytics. 

Big data in the Banking and Financial Services sector

The application of big data analytics has allowed financial services companies and banks to become more efficient, customer-centric, and competitive. This industry utilizes big data to make transactions, trading, and financial activities seamless for their employees and customers.

Retail and eCommerce

The eCommerce and retail industries collect data through their Point of Sale (POS) systems, loyalty programs, and website browsing behavior. It also helps with inventory replenishments. 

In the eCommerce industry, knowing your customers can unlock conversions and profits. Big data on real-time consumer behavior, purchase history, and consumer preferences can help online stores recommend the most relevant products and offer them to consumers at the right time. Big data enables e-stores to conduct competitive analyses and pricing to lure consumers. Above all, technology allows online retailers to offer personalization, superior customer service, and experience.

While these industries invest heavily in big data, they are not the only ones. Many sectors like manufacturing, logistics, media, oil and gas, and healthcare are investing large sums of money in adopting this technology to manage their data efficiently. 

Big Data analytics for the healthcare industry is expected to reach USD79.23 billion by 2028. 

For most companies, data is fragmented, and brands are looking for people who can analyze and use data to optimize all business processes and functions. 

Big data impacts not only the private sector but also the public sector. For governments, big data has many applications, including health-related research, financial markets research, fraud detection, public safety, transportation, and environmental protection, to name a few. 

Advantages of Big Data 

Massive organizations like Google, Facebook, and Amazon have proved how big data can build big brands. These organizations have capitalized on big data mining and analytics to grow their brands and boost market valuations. 

One of the most significant advantages of big data is the ability to make informed decisions based on hard data and facts. 

Big data is valuable for consumers too. In the information age, the consumer can access ratings, product reviews, and an easier means of providing instant real-time feedback. This allows consumers to make informed choices. 

What are the challenges with big data and analytics?

As recently as last year, Facebook’s Mark Zuckerberg, Google’s Sundar Pichai, and Jack Dorsey of Twitter had to testify before Congress about the steps they have taken to deal with data privacy. 

Consumers have become more data savvy and are concerned with privacy issues and breaches. <add stats on #s ready to share data for more relevant messaging)

Business outcomes are only as good as the data; high-quality data (link) is of utmost importance. Researchers and brands must be cautious about the data sources and methodologies to obtain the most accurate, reliable, and relevant data. 

The big data market is poised for phenomenal growth in the coming years. With the development of technology penetration across all areas of life, digitization, and the widespread use of smartphones globally, large amounts of data are produced every second. This has led to the need for data analysis and big data. 

As brands apply big data, they make data-driven decisions faster and can respond quickly to market changes. This has a direct impact on their bottom line. But data is not enough; there has to be a fusion of data science with marketing science to help market research become more effective.

Kadence International helps leading brands make game-changing decisions. If you are looking for a research partner to help better understand your customers, we would love to help. Fill out our Request for a Proposal here.

How do you enter a new potential market?

Expanding your business to new markets allows you to reach potentially vast numbers of new customers and grow your revenue massively. However, the process can be difficult and filled with complications.

A market entry strategy maximizes your chances of success when moving into a new market. In this article, we’ll look at some reasons to consider when expanding your company, the differences between domestic and international markets, and some strategies you can use.

Why move to a new market?

Now, let’s delve into the reasons why entering a new market is a strategic move worth considering. Although it can be demanding and entail significant expenses, the following factors make it a worthwhile endeavor:

  1. Expanding customer base and boosting revenue: The primary motivation behind entering new markets is to expand your customer reach and increase profitability. By accessing untapped customer segments, you can sell more products or services and achieve higher revenue streams.
  2. Exhausting growth opportunities in the domestic market: If your business has reached its maximum revenue potential in the local market, exploring new markets becomes imperative for sustained growth. Expanding into new territories allows you to tap into fresh customer segments and unlock additional sources of revenue.
  3. Diversifying business and reducing risk: When you venture into multiple markets, you decrease the risk associated with relying solely on one market. By diversifying your operations across different markets, you can mitigate the impact of market fluctuations, economic downturns, or unforeseen circumstances that may adversely affect one market but not others.
  4. Leveraging competitive advantages: Entering new markets provides an opportunity to capitalize on your competitive advantages. These advantages can include unique product features, technological expertise, brand recognition, or operational efficiencies that give you an edge over competitors. Expanding into new markets allows you to showcase and leverage these strengths to attract customers and gain market share.
  5. Accessing new resources and talent: Expanding into new markets can grant you access to valuable resources, such as raw materials, production facilities, or distribution networks that may not be readily available in your current market. Additionally, entering new markets may enable you to tap into a diverse pool of talent, fostering innovation and driving business growth.

What are the signs that it might be time for your brand to enter a new market?

Timing is everything when it comes to expanding your brand’s reach into a new market. But how do you know if the time is right to expand? The list below is just some signs that your brand might be ready for this move:

  1. Strong demand: The brand has received positive feedback from customers in other markets and has a solid reputation.
  2. Market saturation: The brand has reached its maximum potential in its current market and is looking for new growth opportunities.
  3. Positive market trends: The market you are considering is experiencing growth and presents a favorable economic environment for the brand.
  4. Competitive advantage: The brand has a unique selling proposition or advantage over competitors in this market.
  5. Resource availability: The brand has the financial and human resources needed to enter and succeed in the new market.
  6. Market fit: The brand’s products and services align well with the needs and preferences of the target audience in this market.
  7. Appropriate market entry strategy: The brand has a clear plan for entering the market, including a tailored marketing strategy and an established network of partners and suppliers.

What are the different frameworks for entering a new market?

  1. Market development: This involves expanding the brand’s presence in existing markets by offering new products or services. Pros include leveraging existing customer relationships and brand recognition and being less risky than entering completely new markets. Cons include potentially limited growth potential in existing markets and increased competition.
  2. Market penetration: This involves increasing the brand’s market share in existing markets through promotions, advertising, and other marketing efforts. Pros include leveraging existing infrastructure and relationships and being relatively low risk. Cons include limited growth potential and increased competition.
  3. Market diversification: This involves entering markets with existing products or services or developing new products to meet the demands of the new market. Pros include reducing dependence on a single market and product line and increasing growth potential. Cons include increased risk and the need for significant investment in product development and market research.
  4. Product development: This involves introducing new products into existing markets to replace existing products or meet new customer demands. Pros include the potential for increased sales and revenue and the ability to remain competitive in existing markets. Cons include the need for significant investment in product development and the potential for failure if the new product does not meet customer demands.
  5. Geographic expansion: This involves expanding the brand’s presence into new geographic regions through exports or new operations in the target market. Pros include access to new customers, increased market share, and the ability to diversify revenue streams. Cons include increased cultural and regulatory challenges and the need for significant investment in infrastructure and relationships.
  6. Mergers and acquisitions: This involves acquiring or merging with another brand or company to gain a foothold in the new market. Pros include the ability to enter quickly and access to established customer relationships and market share. Cons include potential cultural and operational challenges and the risk of overpaying for the acquisition.
  7. Joint ventures: This involves partnering with a local company or brand to enter and succeed. Pros include access to local expertise and resources and reduced risk and investment compared to going it alone. Cons include potential disputes over control and revenue sharing and the need to find a compatible partner.

Each framework has its advantages and disadvantages, and the choice of which one to use depends on the brand’s goals, resources, and the characteristics of the market you are entering.

The choice of the framework will depend on various factors, such as:

  1. Company goals and resources: The brand’s overall goals and the resources it has available, such as financial resources and human capital, will play a significant role in determining the best framework.
  2. Market characteristics: The size, growth potential, competition, and regulatory environment of this market will also be important considerations.
  3. Industry factors: The state of the industry, including trends and technological advancements, will also play a role in determining the best framework.
  4. Company strengths and weaknesses: The brand’s strengths and weaknesses, including its existing infrastructure, brand recognition, and reputation, will be important factors in choosing the most appropriate framework.
  5. Customer preferences and needs: Understanding the target audience and their preferences and needs will help the brand determine which framework best suits them.

By considering these factors, a brand can determine which framework best suits its goals, resources, and the characteristics of the new market. It is also necessary to adjust the framework over time as the brand gains more experience and insight.

Questions to ask when considering entering a new market?

  1. Is there a strong demand for the brand’s products or services in the target market?
  2. Is the target market growing and presenting a favorable economic environment for the brand?
  3. Does the brand have a competitive advantage over other brands in the target market?
  4. Does the brand have the financial and human resources needed to enter and succeed in the desired market?
  5. Is the brand’s product or service offering a good fit for the target market and its customers’ needs and preferences?
  6. Does the brand have a clear and well-defined market entry strategy?
  7. Has the brand conducted thorough market research and competitor analysis in the target market?
  8. Does the brand have the necessary local partners and suppliers to succeed?
  9. Does the brand have the necessary infrastructure, including distribution and customer support, to support its entry into this market?
  10. Does the brand need support from key stakeholders, including employees, investors, and board members?

10 questions a brand should ask itself when considering the feasibility of entering a new market or “can I enter?”

  1. Are there any regulatory barriers to entry in the target market?
  2. What is the level of competition in the target market, and does the brand have a competitive advantage?
  3. What is the cost of entry into the target market, including setting up operations, marketing and advertising expenses, and distribution costs?
  4. Does the brand have the financial resources and funding to enter and succeed?
  5. Does the brand have the necessary human resources and expertise to support its entry into the new market?
  6. Does the brand have the necessary distribution channels and partnerships to reach customers in the target market effectively?
  7. Does the brand have the necessary marketing and advertising capabilities to promote its products or services in the target market effectively?
  8. Is the brand’s product or service a good fit for the target market and its customers’ needs and preferences?
  9. Does the brand clearly understand the target market’s cultural and language differences, and is it prepared to accommodate these differences?
  10. Does the brand clearly understand the target market’s economic and political landscape, and is it prepared to navigate any potential challenges?

Domestic markets vs. international markets

Are you planning to enter a new domestic market or take your products overseas to sell in a foreign country? The approach for each of these will be very different.

Domestic markets

Typically, this will be much easier than entering an overseas market. The culture will be the same, everything will probably be geographically closer, and things will likely be very similar to your existing markets.

International markets

This is where things become more complicated. You’ll have to factor in a number of differences compared to how you currently run your business. These include:

  • Cultural differences
  • Administrative differences
  • Economic differences
  • Logistical challenges involved in transporting goods abroad

Things to consider

Before you enter any market, it’s crucial to take some time to confirm whether you can afford the move. Can you afford the costs of exporting, working with intermediaries, tax, and all the other expenses involved? And what proportion of the market can you realistically expect to be able to serve? 

You must also consider if the product or service will work in your intended market. Market research (both online and offline) plays an important role here — ensuring demand for your product justifies the export cost.

Steps to consider when entering a new market

  1. Conduct market research: Determine the size and growth potential of the market, as well as the cultural and legal factors that may affect the brand’s success.
  2. Identify target customers: Define the demographic and psychographic characteristics of the target audience.
  3. Analyze the competition: Evaluate the strengths and weaknesses of competitors in the market and determine how to differentiate the brand.
  4. Develop a tailored marketing strategy: Based on the research findings, create a marketing strategy specific to this market and addresses the target audience’s unique needs.
  5. Establish partnerships and networks: Build relationships with local suppliers, distributors, and other partners to help the brand enter and succeed.
  6. Plan for cultural adaptation: Take into account cultural differences in the market you are considering and make necessary adjustments to products, marketing materials, and other business practices.
  7. Prepare for any regulatory requirements: Research and understand any legal or regulatory requirements that may impact the brand’s operations.

Risks of entering new markets

There are also numerous risks involved in expanding, including:

  • Country risks, like the possibility of political unrest, sudden changes, or financial issues that could impact your business
  • Foreign exchange, such as the possibility of currency exchange rates changing drastically, could seriously affect your bottom line
  • Cultural risk, which essentially means the possibility of your new business venture running into challenges due to major differences in culture and customs
  • Weather unpredictability. Are you moving into a market where natural disasters and weather conditions could cause damage to your facilities and cost money?

Once you have carefully researched your desired market and weighed the potential risks, you may decide it’s worth entering. If so, there are a number of different strategies you can employ, each with its own pros and cons.

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Different market entry strategies

Direct exporting

This is where you export your products into the new market directly. You’ll have to handle all the aspects of the process independently, from transport to payments to operations.

This method requires more resources and time compared to working with an intermediary. You’ll need to create an exporting infrastructure, train employees, and make and receive international payments among many other challenging tasks.

On the plus side, this approach maximizes your profits as you don’t need to pay any third parties. You’ll also have complete control over your sales and marketing processes.

Indirect exporting

Indirectly exporting involves working with an intermediary. It has a number of advantages, such as:

  • Much lower risk. An experienced third party will take care of the exportation process, minimizing the risk of failure.
  • You can focus on your own business and domestic markets without being occupied by your new ones.
  • Fewer resources are required on your part

On the other hand…

  • Profits are lower since you have to pay your intermediary
  • You’ll be disconnected from your customer base, so you’ll miss out on important insights and lessons
  • You’ll lose full control over sales and marketing abroad

There are a number of different options when it comes to indirect exporting. Here are some of the most common ones.

Indirect exporting with buying agents

Buying agents are representatives of foreign companies that want to buy your products. You’ll work through them when selling your products.

They’re usually paid by commission and will try to negotiate the lowest possible price. Sometimes, buying agents are government agencies.

Indirect exporting using distributors

You can sell your product directly to distributors or wholesalers, who will then take care of distributing the product to retailers.

Indirect exporting through management and trading companies

Export Management Companies (EMCs) exist to take care of all your export and sales processes in your desired market.

It’s worth taking some time to research and find the right EMC, as most specialize in a particular market and region. They’ll help you identify markets, find customers, handle all shipping and logistics, and much more.

Indirect exporting through piggybacking

Piggybacking is where you allow another, non-competing company to sell your product. This can work extremely well if your target market already has an existing customer base and distribution infrastructure.

You’ll get immediate access to your market but for a fee.

Producing products in the target market

Another option is to manufacture your products in the target market. This saves you the cost of transport and the many logistical challenges involved in exporting your product abroad.

However, you’ll also need to consider the many challenges in manufacturing your product abroad, legal issues, costs, possible risks, and more. Depending on your situation, this could be a good option.

(For more information on the most effective strategies for entering an unexplored market, check out our top four marketing strategies article).

Entering an unknown market can be extremely rewarding and can allow your business to move to the next level and achieve new growth. It’s important to research all the options and ensure the export strategy you deploy is the safest and most effective for you. You’ll also need to thoroughly research the market to understand its potential and position your product for success, something we cover in our Ultimate Guide To Market Entry.


Kadence can help you do that. We have extensive experience helping businesses carry out research and create effective strategies for market entry. To find out more, learn about our market entry services or get in touch.

Many global economies are defined by stagnant growth, falling populations and saturated markets, making growth for brands a tricky proposition. In many ‘emerging markets’ there are still big opportunities grow… if you keep your eyes open.

Many businesses are looking to fast-growth, high-energy markets outside the so-called ‘developed’ economies to fuel their expansion. Unlike congested and sometimes shrinking economies in ‘the west’, many parts of the world are seeing rapid population growth, fast-rising incomes and are adopting transformative technologies without the burden of legacy investments. The result? Vibrant new opportunities for businesses.

But while entering any new market is a challenge for brands, moving into these more dynamic economies – often with very different cultures, business practices and consumer expectations – can be particularly tricky. Berlin isn’t the same as Birmingham, but many of the norms in both markets are recognizably similar. Head to Beijing or Bamako, and the assumptions you make about brand, product and business practices will be challenged.

Take a phased approach to understanding the opportunity afforded by new markets

The best way to understand your opportunity in different markets is to take the traditional phased approach to research. This involves the following considerations.

  1. Which markets might we look at? Consider the number of consumers, the country’s income levels and the stability of its economic and political structures. You can also examine the maturity of business practices and think about geographic location, transport links and accessibility in-market.
  2. What’s the macro environment like in a market we want to enter? Revisit all the above, in more detail. Focus on specifics – such as the transport and tech infrastructure; and business support networks (such as accounting firms or legal protections on IP) – and how the trends are evolving in those areas.
  3. How does the competitive landscape affect its attractiveness? Pay attention to other outsider brands and how they’re doing; but also domestic rivals and potential competitors poised to move into adjacent markets.
  4. What are the practical issues for market entry? In new markets further afield, transport links, language barriers, different cultural norms and local regulations can throw up roadblocks.
  5. How do we adjust our product, service or messaging to optimize our offer there? As above, but remember that very different cultures and climates can challenge even the most basic assumptions about how a product will perform.

Step away from the generalizations

It’s vital to acknowledge that ‘emerging markets’ aren’t as uniform as the term suggests. Far from it. There are so many variations by region or category that talking about common features of ‘emerging markets’ is a dangerous over-simplification. And there are as many differences within countries as between them. This particularly true in countries where rapid urbanization has seen a break with traditional cultures outside cities.

(That’s true for any generalization, of course. Alcohol brands, for example, can’t even treat the US and Canada the same. North of the border, there are drinking-age laws set province-by-province, massively complicating online alcohol sales. They might look the same in terms of development and even geography and demographics. But they’re not.)

That’s not to say there are no rules that apply to entering markets that share particular attributes. The pace of economic or population growth, or the expansion of middle-class consumers with disposable income, might always be a feature of your selection process for target markets.

But in many categories, consumption is growing so quickly that only the real beneficiary of a ‘toe in the water’ market entry is likely to be knock-off brands and domestic substitutes able to adjust output more responsively to local conditions, especially where legal protections for intellectual property are less secure for global players.

All these caveats mean that in-depth research into new-market consumer appetites, infrastructure and competition is just as important in growth areas as it is in more mature markets.

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Assessing new markets – 5 key considerations

All that being said, knowing the likely biggest points of difference when entering markets with strikingly different fundamentals is still important. Five things to consider:

1. Affordability 

In many emerging markets, disposable income may be much lower for large parts of the population. For global products, that means understanding the more affluent segments better and targeting marketing appropriately. For localized or commodity products, the question is cost. Can you use local manufacturing, logistics and even branding to deliver your product to a mass market?

2. Distribution 

Getting product to consumers might be more challenging. For brands that rely on developed economy logistics partners, understanding infrastructure constraints, developing local contacts and ensuring quality of service is crucial. When Haagen-Dazs first entered China, it set up its own warehouse and delivery network to ensure the product reached consumers correctly.

3. Localized branding and marketing 

What works well in Boston, may not succeed in Beijing. Cultural understanding is key to ensuring that your marketing and branding hit the spot further afield. Caveat: remember the urban/rural split. Many urban consumers are ‘world citizens’ and expect to be treated as such.

4. Watch for local rivals

The cachet of being a global brand can help enter emerging markets. But cost, customization and the risk of ‘brand colonialism’ can make more assumptive Western brands seem out of touch and vulnerable to local alternatives.

5. Native teams

As a global market research agency, we benefit from having local teams in the markets we evaluate for clients. This means we understand the cultural context, consumer trends and broader macro situation. It is possible to enter emerging markets at arms’ length. But having local people in decision-making positions is the surest way to avoid clumsy cultural or operational missteps.

Look for leapfrog opportunities

There are plenty of upsides to emerging markets, too, beyond simply vast numbers of new customers. In some cases, our research will throw up opportunities that just aren’t available in mature markets at all.

Look at the way different platforms have developed to cater to the nuances of local markets, for example. In many fast-developing economies, traditional channels have been leap-frogged by the adoption of newer technologies. This often happens where older tech infrastructure has attained much less penetration, allowing a newer tech to fill a void.

In many African countries, for example, low population density and long distances between conurbations means traditional copper or fiber telecoms can be limited. But mobile telecoms are more practical and affordable. They offer a plethora of additional over-the-top services that have led to an e-finance and e-commerce boom. Entering those markets will require different thinking about distribution – as well as marketing and payments using creative local solutions.

Remember, e-commerce is not the same everywhere

The Philippines is another good example. In other countries, Facebook might be just part of your online marketing toolbox. But there, Facebook has attained an absolutely dominant position in e-commerce – for one simple reason. With lower average incomes, Facebook and local mobile companies realized their penetration was constrained by the cost of network data. So almost every plan has free Facebook data regardless of contract status. For market entry success in the Philippines, Facebook is going to play a big role.

But we need to distinguish between being available on those platforms on the one hand; and entering a market on the other – which involves boots on the ground. Yes, that’s more investment. But you’re also surrendering less of your margin to platform owners and logistics providers.

A staged approach to entering less well-understood markets, starting with the more popular local social networks or e-commerce platforms, allows you to refine the consumer profile. Companies also get time to get to grips with the legal and financial frameworks that might shape future involvement; and see how local fulfilment clarifies their operational options.

Don’t assume that tried and tested e-commerce strategies from the US and Europe will work everywhere in the world, however. Amazon, for example, simply doesn’t have a presence in some markets. In others, consumers can use the site, but limitations on distribution and other logistics mean delivery times, cost and availability are prohibitive. Local research about the best platforms for reach and fulfilment is a must.

Lazada, Shopee, Zalora and Carousel, are some of the top e-commerce sites in South East Asia. These names may not be familiar to firms outside the region. But they can play a crucial role for testing in these markets. Again, it’s worth working with people who understand how to optimize those platforms, as well as interpret the effectiveness of marketing on them; and what the results say about the potential for deeper market entry.

Understand the technicalities of new markets

Even online entry into a very unfamiliar market can be daunting. Moving in for formal distribution, licensing or agent agreements or even setting up locally or buying into a native business brings with it additional issues that need to be researched.

European companies with experience of entering new markets in the EU can find the regulatory and legal considerations in countries farther afield a challenge. Even in the US there are federal laws and individual state regulations over companies and property to contend with. This can make establishing a new business relatively tough. And that’s considered a ‘developed’ market.

In parts of South East Asia, many European companies report lengthy delays in registering businesses. Others discover that in some markets domestic firms have particular benefits. This could be a form of protected status, or reserved access to certain kinds of contract. This is worth exploring in due diligence especially if you plan to sell to government agencies that are often required to ‘buy local’.

Don’t make any assumptions

Most of the key factors for market entry will depend on exactly which market you’re looking to enter. There are very few hard and fast rules that apply across the generalization ‘emerging markets’.

But there is a common theme from this guide that should frame your thinking: these markets change – fast. Before committing to entering any market – and especially ones evolving so rapidly – it really pays to research the opportunity fully. This is something that Kadence has helped many clients with, allowing companies to succeed in lucrative emerging markets. Find out more about our market entry services, or get in touch to discuss a project.

How you enter a market often dictates whether you’ll be successful there. Different approaches have pros and cons – deciding which to choose is as much about market insight as financial logic. So what are the four market entry strategies?

Export? Licensing? Franchising? Partnering? Joint Venture? Merger or Acquisition? There are many ways to get into a new market. What situations typically suit each variety? What do you need to know about the market to select the most appropriate options? How do we assess the strengths and weaknesses – and their long-term effect on your business? Here’s our brief overview of your options for an entry strategy into a new market.

Early exposure: the passive way in

E-commerce and social media mean brand exposure in new markets has become relatively easy. Social media shopping, for instance, is becoming an increasingly popular entry point for brands into new markets, particularly if social media influencers jump on board. 

(Caveat: many global influencers, and those within markets, may need an inducement to feature products or services. While ‘accidental’ market exposure is possible, you’ll still need some strategy for this introduction).

Early exposure could also be by traditional media outlets (like fashionable magazines) or web-based trendsetters (such as popular tech review channels on YouTube). Most markets have local versions of social media channels, with popular global channels like Instagram, Twitter, or Facebook being prominent.

But online retail can be a double-edged sword. Yes, consumers might get exposure to your brand online. But they might buy the next best thing available if it’s unavailable locally. Your brand could be doing an excellent job building the category for local rivals.

It’s also worth looking out for platforms that are not global. In many markets, local e-commerce platforms have emerged. Any attempt to exploit the market will rely on having access to it. (We take a closer look in our guide to entering emerging markets).

In addition to working with local platforms, brands must carefully consider how to fulfill orders and handle customer relations. Managing all these elements through third parties in a commercial relationship can work well. 

That said, there’s a massive gulf between entering a market virtually via e-commerce with third-party fulfillment services and having ‘boots on the ground’. This is not only about visibility and commitment. Each third party you work with is taking a chunk of your profit margin. And in some cases – particularly with perishable or heavyweight products, and especially with services – the arm’s length approach won’t work. 

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To access that pool of consumers, you will need a local presence. Here are some main routes.

Direct exporting

Direct exporting is often considered the default choice for new market entry. Direct exporters often sell directly to a consumer (B2C), a business (B2B), or a distributor in a foreign country. Direct exporting allows consumers or businesses in new markets to easily buy your products wholesale, where you handle the shipping logistics. Or if using a distributor in a foreign country, they will typically take care of fulfillment and local marketing. 

International shipping has become increasingly easy for most products, allowing brands a passive market entry strategy. But assigning a local trusted distributor to conduct transactions with your buyers, and better still, partnering directly with major wholesalers or retailers, is an equally promising strategy to capture new markets.

Working with the right partners can be a make-or-break decision. So thoroughly researching the key players, their terms of trade, and their local reputations is vital. Even seemingly innocuous business practices can greatly affect how products are handled, sold, and supported.

Having local agents doesn’t mean you can ignore the nuances of the local market. It still pays to get under the skin of local retail, for example, understanding consumption patterns and thinking about local tastes and behaviors that might shift how a product is presented. Even in an arms-length distribution agreement, it pays to tailor a product to local preferences. Chocolate brands, for example, must cater to local preferences on their product’s flavor and texture – and the local climate. We’ve supported many businesses with getting under the skin of target consumers in new markets as they’ve entered new territories.

Licensing and franchising

Licensing gives in-market parties legal rights to use your company’s name and other intellectual property. Any licensee can produce and sell products under your name or offer services using your brand. In exchange, you get royalties or other payments. It can be an effective light-touch way of entering a market, especially if you’re a service business that needs a local workforce; or your products would benefit from local manufacturing.

Franchising is similar to licensing but requires much more heavy lifting upfront. In addition to researching any new market before entry, brands looking to franchise should think about how they will structure their franchise agreement. This will require additional research into legal structures, potential franchisee audiences, competitor brands, and franchise fee structures. Working out what the franchisee gets for their investment (for some business models, it’s little more than a license; for others, it’s a suite of processes, marketing support, and even hardware that come with the deal).

But it’s not all plain sailing. How a licensee or franchisee behaves towards customers, the quality of their output, and the local spin they put on your product can affect the brand. That means thorough due diligence on potential partners and brands with detailed research on their new market are much more likely to tie down any important factors affecting those decisions into a contract.

Direct investment

For many companies, setting up a fully-fledged operation in a new market is a big commitment – but it also brings enormous advantages. This kind of ‘greenfield’ investment – ‘greenfield’ meaning the establishment of new facilities – means complete control over the operations in the new market. Many countries welcome and incentivize foreign investment of this kind.

Some companies will choose only to enter new markets where this kind of investment is possible – for a variety of reasons. Direct investment provides a reassuring level of control if the product is sensitive to different handling or needs to be manufactured to particular tolerances or standards.

If a direct investment is the preferred method for new market entry, the legal and regulatory burden of different potential markets should be a factor in the due diligence process right at the outset. In addition to in-market research expertise, local legal and financial advice is essential.

Buying a business

Buying an existing business is a genuine fast track for foreign companies to enter a new market. According to Statista, in 2021, global Mergers and Acquisitions (M&A) deal value reached approximately 5.9 trillion U.S. dollars, with over 63,000 deals completed.

Market research is even more critical in the due diligence required when buying a business in unfamiliar territory. Due diligence is challenging on domestic M&A deals; it’s much tougher abroad. The traditional metrics you might assess – and even the gut feel of key decision-makers – must be translated through entirely different cultural and market norms lenses. 

There can also be a benefit in setting up a joint venture­ (J.V.) – a new partnership between your company and one or more parties where the ownership is shared. You get the benefits of a greenfield start-up; a lower investment than M&A or setting up on your own; local expertise baked in; and legal status as a native in the new market. Many businesses see a J.V. as a turnkey project: each party brings existing knowledge and capabilities for fast deployment.

But be warned: joint ventures only thrive when the contractual commitments of each partner and the beneficial ownership structures are crystal clear. And some big brands have come unstuck in joint ventures where the local partner’s vision for the product or service deviates from their own. Conflict resolution mechanisms are a must. Unsurprisingly, joint ventures are more common in time-limited projects where several contractors need a legal entity to collaborate on a specific mission – and have precise terms for the joint venture’s dissolution.

Building your intelligence network

The choice of entry route will be dictated by many factors, including consumer habits, culture, legal status, taxes and tariffs, local business practices, the transparency you can attain around potential partners, and more. As a rule of thumb, the less exposure you have to cost and risk, the less control and margin you can secure.

Arms-length surveys and analysis can only tell you so much, however. Working with international agencies who have their own people on the ground in a new market not only means better access to the nuances of consumer behaviors and local trading rules – it also means dealing with people who have first-hand experience of running a business in that market. This approach has enabled us to successfully support clients entering new and lucrative markets.

You can learn more about our market entry expertise, or get in touch to discuss a potential project.