Researching Foreign Markets
Some years ago, before the age of the internet – I worked with a company who made specialised rubber hoses for cars and lorries. The company was very successful and had a selection of very lucrative contracts with European car and lorry manufacturers. However these were very fixed and the company was almost wholly reliant on a few customers. In fact 90% of their business was dependent on just three specific customers. There were other problems, the product was not really unique, there was quite a bit of competition and worse of all there was only a small barrier to entry.
Everything in this company screamed that it was very vulnerable to outside forces, one well funded competitor could easily put it out of business. Of course it was more than just a business – the company employed lots of people who had worked there for years. The directors knew they were vulnerable and were always looking at moving into different markets. The options were difficult though and identifying new markets always very challenging.
In the end they did move into a new market, but the costs of expanding into Japan and China almost brought the company to it’s knees. The problem was for a small company in North of England – moving into China was extremely difficult to do and very, very expensive. Setting up a satellite office, new staff, new factories and researching all the implications about exports, taxes and regulations etc.
For the modern entrepreneur this is so much easier now with the internet as mentioned in an earlier post. Even the provisional stage of market research can literally be done from the comfort of your own desk and internet connection. There are restrictions on the internet to research the Japanese market properly for instance you’ll need some knowledge of the language and a paid vpn service. This is essential as it gives you access to localised web sites, for an American doing market research in the United Kingdom – he’d need a British IP address’ for example. Most internet entrepreneurs use proxy and VPN servers to allow them to switch their online identity when required.
Business isn’t necessarily easier nowadays but there’s no doubt that there’s lots more potential for expansion now than there ever was. We are increasingly a global market with potential customers anywhere in the world. Of course, we also have potential competitors also across the globe