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As global economies slowly recover from a tumultuous 2023, more and more businesses are looking at international expansion to fuel growth. With technology bridging geographical gaps, international business expansion has become a viable option for organisations of all sizes.

We recently surveyed a number of business leaders and heads of marketing to understand where they were at in their international expansion journey, which countries performed best and which markets were the most challenging.

This article delves into the trends our research uncovered, which are shaping the landscape of international business growth.

International expansion challenges

A lack of local market knowledge is one of the biggest challenges facing business leaders when they consider expanding into new markets. Most businesses tackle this problem by hiring talent in-market, partnering with local suppliers and resellers, and working with agencies that specialise in that market.

However, finding in-market talent is also a major challenge. This is especially true for the first few senior hires, which are critical to determining the success of market entry.

Budget constraints and significant competition are other common obstacles that most cross-border businesses face. The question of budget is often an interesting one that comes up for many SME brands considering exporting. Under-estimating the investment needed, especially in saturated markets or markets with one or two dominant competitors, often leads to frustration.

Cultural knowledge

Popular destination markets for exporters

Germany - US cultural differences

Germany & the USA are a paradox for international business growth. They’re both highly desirable markets, but are also the most challenging countries to break into!

The UK, Nordic countries, and Western Europe are considered desirable markets. However, these also tend to be the markets often cited as “problematic”, “competitive”, and “expensive”.

In contrast, brands see great performance in some Eastern European, South American and Asian markets – Bulgaria, Argentina, and Singapore in particular. Yet these were rarely cited as markets most businesses were considering for expansion.

Australia and the Middle East – UAE, Saudi Arabia – are rising in popularity as potential next-step markets, especially for businesses originating in English-speaking countries.

Market entry strategy trumps intense competition

More competition that’s increasingly sophisticated makes international expansion challenging for business leaders. Understanding product-market fit and identifying a truly unique value proposition is crucial for market entry, especially when breaking into countries like the USA, UK, Germany, France, Japan, India and China.

Competition doesn’t deter most business leaders, though. It is encouraging to see that most senior executives identified strategic planning as their number one priority when considering an expansion.

In fact, ahead of legal constraints and marketing concerns, identifying the correct strategy for new market entry was the single most important factor holding back business expansion.

Seen another way, business leaders are happy to take on significant competition if they believe they have the right strategy in place.

Defining a strong USP is critical for market entry

International marketing is critical, but few get it right

Cross-border teams face a haphazard journey

Concerns around marketing were cited as one of the biggest barriers to international business expansion.

Interestingly, most survey respondents rated their marketing effectiveness in overseas markets as just average or below average compared with the home market, and 93% did not believe their marketing team had sufficient experience in international markets.

Most medium and large businesses operate inefficient international marketing operations split haphazardly across local teams, working with numerous local agencies, and without central control over key points such as audience data, technology used, conversion tracking, or even marketing processes.

Small and micro businesses, on the other hand, by their very nature, operate far more efficient international marketing operations with central control over all business-critical marketing functions. This makes them much better placed for scale.

As global economies evolve, staying ahead of the curve requires developing a robust cross-border growth strategy powered by best-in-class marketing. The challenges of understanding new cultures and recruiting senior leaders in-market underscore the need for strategic foresight and innovation.

At AccuraCast, we understand the complexities of international growth. Whether you’re seeking comprehensive market research, a robust go-to-market strategy, or impactful international marketing initiatives, our team is here to help.

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