Competitive intelligence gathering for international markets
This post is part of a series offering guidance to companies considering international expansion. Today’s theme is competitive analysis: it’s an introductory view, and a theme I’ll return to again in future posts.
Marketing planning (also, a future theme) is a crucial tool for any company, irrespective of size. Think of it as the blue print around which all decisions surrounding your operational and strategic planning will flow. Competitive analysis or competitive intelligence is one strand of this planning process.
Not All Customers Are Alike
Whilst success within a domestic setting may point to overseas expansion as a natural next step, management should not simply assume that it can supplant its current business model within a new setting and run with it. For the purposes of this post, I am assuming that firm decisions have already been made as to which specific country or region to enter, and if English is not widely spoken, that this is will be accommodated. Undoubtedly some form of information gathering (formal or informal) will have been conducted to back up your geographic and market targets, pointing to a demand base for your products or services. However, regardless of whether we are considering either a B2C or B2B environment, the old adage of “think global, but act local” remains very true. Not all “consumers” will think and act alike.
The make-up of your prospective customer base is an area we will consider in a separate post, but crucially you need to tap into how it perceives the concept of value-add, and how high a premium this can carry. Customers today are spoilt for choice, with the Internet enabling even more immediate access to products. Investment in marketing is expensive; a poorly executed campaign which bears little relevance to the market’s needs, is a wasted opportunity. Therefore, creating a sufficiently strong brand image through which to generate demand for your portfolio is crucial. Differentiation is key here, and ideally, not based purely around competitive pricing.
Learn From Your Rivals
Gaining as much insight into your competition will better equip you to position yourself appropriately. By learning how a local market is shaped and is evolving, you can then decide your USP, product offering, target vertical markets, pricing model, and appropriate channel partners. Learn from those out there already doing it.
Typically any market comprises:
International competitors: You may already be competing with some of these names and feel you understand their tactics. However, you need to confirm whether they are offering their complete portfolio; what types of channel partner they are working with; where they are positioned, pricing wise. They may only be dealing with the international branches of existing companies for instance.
Local competitors: these can be large and very dominant, creating some form of market entry barrier. They may be afforded preferred supplier status in e.g. public sector contracts; Some may manufacture locally, generating better economies of scale; Their quality of service and products may or may not be on a par with international standards (increasingly, senior management comprises personnel with significant international experience). They may be strong in particular market sectors.
Low cost imports (from Asia, Middle East) and/or “me toos”/grey market. Whilst you may not rate them as serious competitors, they do form part of the whole market. Their actions may impact on your ability to offer some higher value services e.g. fully certified warranties. The level of activity within this sector may fluctuate from year to year. With the global economy still largely in downturn, many sectors will be flooded with cheaper goods. Your channel partners, acting as your eyes and ears on the ground, can best keep track here.
So, where to start…
- The Internet is a great tool to find top level data for free. Global analysts such as Datamonitor, Euromonitor, Forrester Research, Gartner, IDC, and Mintel, will typically publish summary data for free, outlining a market’s value, average annual growth rate, and perhaps the top 5 suppliers and share ranking.
See example of Competitor Analysis grid prepared by Gartner (and in the public domain) on GRC platforms for instance:
- EI provides excellent support including country analysis, local market competitor analysis: if you have an export orientation you can tap into EI’s support infra structure including Business Advisors and its library of information.
Check out EI’s First Flight Programmes:
- Competitors’ web sites will provide valuable insight. They may have a separate web site for each country, or at least a listing of their channel partners, which you can then search separately for clues on market positioning. Press releases will announce major contracts secured, upcoming customer seminars or attendance at trade shows. White papers will reveal potential gaps for you to exploit. Follow your competitors’ international blogs, follow them on Twitter.
- Identify relevant local trade publications and subscribe. Often the core publishing houses will have sister magazines in various countries, and businesses can subscribe for free, electronically. Track competitors’ ads, interviews with suppliers, channel partners and/or key customers. This is an invaluable way to keep abreast of market developments, more so than individual web sites.
- Whilst travel budgets may have been slashed, identify the principal local trade show, and aim to attend for some of its duration. This will definitely fast-track your intelligence gathering in a more informal setting. You can see first-hand how the market operates, visit competitors’ stands, attend presentations, connect with local trade associations, and meet prospects. Within the technology sector, there is an increasing tendency to exhibit at shows with a specific vertical market focus, rather than a more generalist show such as ‘Cebit/Hannover Fair and WITSA’s 17th World Congress on Information Technology in 2010 in the Netherlands
Only once you start to appreciate the dynamics of your target market, can you start to assess the level of opportunity open to you, the cost of market entry, the implications for your branding , and how best to support and motivate your resource base.
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