What is a Market Expansion Strategy and How Do You Build One? 

Eventually, every successful business is going to have to think about expansion. For many companies, it’s the only way to achieve continued business growth. For others, it’s the only way to stop them from stagnating in a saturated market. While there are multiple approaches to market expansion, all of them are doomed to failure without a solid market expansion strategy. 

A market expansion strategy can help you identify the most lucrative markets and business opportunities. What’s more, a strategic model can improve compliance, mitigate risk, and reduce costs. Are you new to the concept of market expansion strategies? Our guide breaks down everything you need to know. 

Market expansion strategies explained

Even if a company achieves market dominance in a particular territory, it might still be falling short of business growth objectives. A market expansion strategy is commonly deployed by businesses that have exhausted their current markets and existing sales channels, but still want to grow. 

There are many elements to a successful market expansion strategy, but one of the most important is that consumers in existing markets are satisfied. If products and services are falling short of expectations, there’s no point in even entertaining the idea of market expansion. 

Executing a successful market expansion strategy calls for plenty of planning and patience. It’s an in-depth framework that determines which markets you’ll be entertaining and outlines the reasons why. Along with these objectives, a market expansion strategy can also include detailed financial planning, preliminary team allocation, and exhaustive market research. 

The whole point of a market expansion strategy is that businesses can make smarter choices when selecting the most lucrative markets. As well as honing in on a particular market, an expansion strategy can identify the best possible time to engage with them, as well as which method is best to use. 

Key market expansion strategies 

Market expansion is often confused with globalization. However, many specific strategies avoid international expansion entirely. 

One such strategy is product development. This involves companies bringing out a new product in a market they’re already serving. There’s also market development, where an existing product or service is introduced to a brand-new market. 

Planning on bringing a new product to an untapped market? Now you’re dealing with diversification. Finally, there’s market penetration. This expansion strategy sees companies engage with existing markets in an attempt to secure a higher market share for their current crop of products and services. 

You don’t necessarily have to think beyond borders when it comes to market expansion. However, the meteoric rise of e-commerce has made international consumers an attractive prospect for businesses. Today, international reach isn’t just the preserve of enterprise-level organizations. While global expansion is far from easy, the rewards far outweigh any risks. 

Why explore new markets? 

While some businesses are happy enough staying put in a domestic market, expansion yields many benefits. For starters, it brings significantly higher profit margins. Increased sales are easier to secure in certain industries, such as the retail and hospitality sectors. Are you facing stiff competition at home? By expanding into a different market, such obstacles don’t have to be a hindrance to business growth objectives. 

Successful penetration into a new market can also put your company at a significant advantage. If you occupy a particularly saturated sector, an international presence can assert you over your competitors. Although it isn’t risk-free, market expansion is a more sensible bet than starting a venture from scratch. You’ll have already learned many of the basic lessons you’ll need to succeed, even if you’ll need to account for localization. 

What are the advantages of a market expansion strategy?

Expanding into new markets can seem like easy money. While there are plenty of revenue streams to reap, many businesses can fail during expansion. What sets apart successful businesses from the ones that fail? A market expansion strategy. 

A robust plan of action can dramatically reduce costs and prepare for pitfalls along the way. Need more convincing that a market expansion strategy is well worth your time? Below are just some of the reasons why it pays to invest in creating a well-considered expansion strategy. 

Lower costs 

Even if the venture proves successful, expanding into new markets comes at a considerable cost. Most outgoings are unavoidable, but you can avoid unnecessary expenditures by taking the time to create a market expansion strategy. Careful planning doesn’t avoid costly mistakes entirely, but it helps sidestep many of them. You can better control how much you’re spending on resources, minimize waste, and ensure you’re capitalizing on all the right opportunities. 

Do you have multiple products that you can potentially bring to a new market? With a market expansion strategy, you can identify which ones are going to prove the most lucrative in any given market. This yields significant cost-savings when it comes to market research costs, as well as outgoings on marketing and general overheads. 

Identify lucrative opportunities 

You might have a pretty clear idea of what you want to get out of expansion. However, a market expansion strategy can unlock opportunities you never considered before. These opportunities often become apparent during the market research stage, with many businesses choosing to take a different direction than previously planned. 

Ideally, you’ll want to identify these missed opportunities as soon as possible. There’s nothing worse than wasting countless resources on a venture, only to find you’d have been better off directing your energies elsewhere. With a market expansion strategy, you can quickly spotlight potential markets, rather than learn about them too late. 

Reduced risk 

A lot of businesses make mistakes when expanding into markets. With a thorough plan, businesses can better predict potential barriers and preempt risky scenarios. This foresight not only eliminates nasty surprises but avoids a situation where considerable time and money is wasted on resolving them. 

During market expansion, a lot of companies commit the cardinal sin of sinking good money into a doomed venture. However, throwing good money after bad is no way to win an uninterested market. A market expansion strategy provides you with a clear framework and underlines when it’s ultimately time to accept your losses and tap out. 

How to create a strong market expansion strategy 

With those kinds of benefits to look forward to, market expansion seems a no-brainer. However, you’ll need to carefully consider your strategy before diving in. Navigating market expansion can be a minefield, but you can increase your odds of success by keeping the following points in mind. 

What are your goals and objectives?

Before an expansion strategy can take shape, you’ll need to ascertain what your overall goals and objectives are. Why are you thinking about entering a new market in the first place? Are you solely focused on growth and see this as the best way forward? Perhaps you want to slash your overheads by establishing a base in a more budget-friendly market. You may also want to capitalize on markets before competitors move in. 

There’s no such thing as being too particular here. The more specific you are, the easier it will be to measure the success of your expansion efforts. Now that you’ve established your goals, you can start thinking about how you’ll actually realize them. Whether it’s business growth or market share dominance, make sure you’re setting specific benchmarks to quantify success. These aren’t static, and you’re free to adjust them later. 

Perform market research 

One of the most important parts of any strategy is market research. It can be a fairly involved process, but one where you can’t cut corners. What’s the spending power of local consumers in a target market? Do you need to adapt your messaging when marketing to a new audience? You’ll also need to determine what cultural differences drive buying behavior in any given target market. 

Market research will heavily inform your localization efforts, making it far easier to connect with consumers in a way that feels familiar. Don’t rush market research. The more time you spend getting acquainted with a new market, the more your products and marketing will resonate with them. 

Make localization an early priority 

While you can internationalize products retroactively, this approach is complex and time-consuming. By focusing on internationalization and localization from the start, you’ll enjoy a much smoother ride when you come to enter new markets. 

Many businesses assume that localization involves little more than translating content from one language into another. While translation is a key part of the process, everything from color choices to associated imagery will need to be adapted to accommodate local norms and cultural requirements. 

Successful market expansion strategies tend to include multiple localization workflows. The most obvious is product localization. Translation alone isn’t enough, so make sure you’re implementing localization as early as the development stage. 

You’ll also need to consider marketing localization. Here, your aim is to create compelling content that strikes the right note with native users. You’ll need a firm grasp of cultural nuances, so market research is vital. What’s more, you’ll need to partner with local talent to ensure marketing content is as engaging and relevant as possible. 

There’s also sales localization to think about. At a minimum, this can include translating sales collateral. However, most businesses benefit from providing sales staff with extensive training on how best to engage and interact with customers from a new market. 

Analyze the competition 

Competitor analysis is a key aspect of market expansion planning. They might be your competition, but those rival businesses have a lot of things to teach you. By evaluating the strategies they have used, you’ll be able to brace for any hurdles or pitfalls that might derail your own efforts.  

Key things to observe here at the segments that rival companies are targeting. Next, look at the messaging used by your competitors to see if there’s anything you can lift to entice your own customers. However, the most important thing to determine is how well your competition has fared in a new market. If consumer feedback has been positive, you have plenty of valuable insights to mine. If feedback was negative, you can still learn from the mistakes of others. 

Finding new markets 

Before you can start work on an expansion strategy, you’ll first need to identify new market opportunities. To begin, start looking at your existing customers and how they’re engaging with your product or service. Any changes in customer behavior can be used to make adaptations to your product or create entirely new ones. You can also capitalize on the increasing appetite for sustainability. Is there a way you can reduce waste or make your product more eco-friendly? If so, you’ve just unlocked a brand new market. 

Here is how BLEND can help 

Although the potential risks can be intimidating, the rewards offered by market expansion are hard to resist. However, you can’t progress without proper planning. A market expansion strategy takes due diligence to the next level. Here, you’ll outline your goals and objectives, nail down insights gleaned from market research, and conduct a thorough analysis of your competitors. Whatever market you’re moving into, it’s also crucial that you remember to implement localization from the off. 

Looking for an experienced localization partner? Here at BLEND, we make it easy to grow globally with a full slate of localization services, including professional translation and multilingual voice-overs in 120+ languages, transcription, subtitling, interpreting, data enrichment, and more. Combining the power of AI with industry-leading tools and human insight, it couldn’t be simpler to localize all of your assets. 

Ready to learn more about how BLEND can help you with your market expansion plans? Get in touch today.

Corinne Sharabi

Corinne is the Social Media and Content Lead at BLEND. She is dedicated to keeping global business professionals up to date on all things localization, translation, language and culture.

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