Among the main challenges for the exporter, however, certainly emerges the process of identifying markets with the greatest potential. How to select priority foreign markets?
The goal is not simple. The factors to consider are indeed multiple, and identifying the key elements is fundamental:to understand why it is necessary to develop an action plan consisting of several phases.
The determinants that cross-directionally guide the decisions of all exporting companies are generally common regardless of the sector of origin. The first step is indeed a business analysisWhat are its strengths, weaknesses, potential, and more generally, its value proposition? In other words, in this initial phase, the goal is to understand how the company differentiates itself from the competition, and why potential buyers should choose its products over those of others.
The second step is the definition of some economic variables: in this it will be possible to understand the export potential of that product in one or more foreign target markets.
In detail, the first indicator in importance is often a country's economic growthThe more dynamic the growth of the Gross Domestic Product, the more likely that market is, or is preparing to become, an interesting destination for your company's exports. This is the example of ASEAN countries (Vietnam, South Korea, Indonesia, above all), or India, countries that present a high rate of economic growth.
A second criterion of choice may be proximity, understood as both logistical distance and cultural distance. In the first case, if we consider countries very far from Italy, we must take into account the Greater economic effort required in terms of transportation, as well as the related timelines. If, for example, an Italian company exports to China, it will have to consider the cost of sea freight and the related shipping times. Conversely, if an Italian company exports to France and Germany, transportation will most likely be by road, with very different costs and times compared to the first case.
In addition, cultural differences in the country of destination must also be considered.For example, a company engaged in the food and beverage sector will have to carefully consider which products and ingredients it sells and uses before undertaking a commercial action in the Middle East, given the large presence of citizens who do not consume pork and its derivatives.
Another element of fundamental importance is then the presence of customs duties, and more generally the legislation of the country of destination. Considering product requirements, required certifications, and any associated costs are necessary steps before undertaking any decision on the final target market.
After evaluating the initial elements presented so far, it is important to sharply skim the potential alternatives. To narrow them down, you can start with a series of operational steps listed below.
Even if you are exporting for the first time, you are still likely to have dealt with customers from other countries. If such experiences were positive, even if occasional, why not use them as a starting point? If you are already operating abroad and aiming for expansion, it makes sense to start with nations that are similar – for economic, political, historical, or cultural reasons – to those in which you already operate.
Or, it may happen that there is an employee in the company who comes from a foreign country or has worked abroad: even starting from one person's background can be a sensible idea. In any case, it is necessary to try in every way to leverage the available knowledge base.
Often, investing in markets where competitors already operate pays off more than desperately searching for new areas. The internationalization choices of other companies have, in most cases, been preceded by analysis and studies. The degree of success of those who moved first can be a valid criterion in identifying target countries. This criterion is certainly the least scientific: there is nothing that guarantees that the success of others is replicable.
And then not being first also means giving up many advantages at the outset. But, on the other hand, following an already blazed trail is often safer than venturing where no one has gone before. In the latter case, the risk of taking a leap into the dark is real. If you decide to follow the competition's path, it's a good idea to develop a thorough understanding of their internationalization strategies, deeply analyzing the reasons for success and/or causes of failure.
Another ace in the hole for quickly becoming competitive abroad can be offering training.. Foreign partners, especially in emerging markets, greatly appreciate being trained on the use of new technologies, and often business abroad (a commercial representation, a joint venture, a production agreement, etc.) is “snatched up” by dangling the possibility of professional growth to potential new partners through attending courses directly within the company. There's nothing better for a small entrepreneur from a foreign country, and for their technicians and workers, than to directly experience the environment of Italian small and medium-sized enterprises and their production districts.
There are nations brought together in free trade areas, customs unions, common markets regulated by regional agreements. Focusing on groups of countries in such agreements can become cost-effective, especially since it means securing broader access than a single nation.
To produce in a springboard market, meaning strategically positioned within a broad economic chessboard In rapidly growing countries, it can exponentially multiply the number of potential customers. Examples include Vietnam for the ASEAN region, Chile for Latin America, or the NAFTA region (Canada, USA, and Mexico), or Mercosur (Argentina, Brazil, Bolivia, Chile, Paraguay, and Uruguay).
Pulling the strings of the analysis, this insight firstly allowed the company to come to know, with the help of data, how it was distributing its business energies.
In this context, Octagona provides Italian companies with the Radar of Internationalization, a service aimed at assessing the countries with the greatest potential for a successful internationalization process.
Radar is the compass for Italian businesses that want to approach international markets. To sell abroad, you need to define WHERE to go and HOW to tackle the market. Time and resources cannot be devoted to unsuitable or unprofitable destinations. Through the study of the variables we reported above, the Radar will indeed provide a clear hierarchy of markets with the greatest potential for the company.
One of the main difficulties SMEs face in dealing with growing globalization is understanding/evaluating their capacity for internationalization. The INTERNATIONALIZATION RADAR is a service created to meet the growing needs of Italian companies regarding internationalization: this service involves the preparation of different models, adaptable according to the type of company and its specific needs, in order to evaluate its capabilities for an internationalization path.
Through the identification of strengths, weaknesses, points of improvement, points of non-compliance and competitive advantages of the client company in the internationalization process and the construction of targeted analysis in terms of market positioning, product and potential counterparts, Octagona is able to provide a detailed framework aimed at the selection of foreign markets in which to direct its activities.
Thanks to the INTERNATIONALIZATION RADAR, the client company will be able to understand its possibilities and peculiarities, with a view to accessing new markets.
Are you interested in learning about the Internationalization Radar in detail? Then You have no choice but to rely on Octagona's experience.. If you truly want to develop your business abroad and build a Quality Export Project, So this is your unmissable opportunity. Contact us by clicking below:
READ ALSO.:
What strategy for international markets? The importance of the right decision
XI Internationalization Steering Committee: all the news for Italian exports in 2023
Benefits of business internationalization: why should your company expand abroad?
Are you interested in our service?
Fill out the form or contact us at
+39 059 9770184
Copyright © Octagona. All rights reserved. P.I. 02646871208
Italian Italian 
English