Venturing into a new market is more than just a new marketing channel. It should be subject to a sound decision-making process and decided by the person who makes all high-level investment decisions, such as the CEO or MD.
Decision-making: should a company expand internationally?
The basis for a market entry should be these steps described by Ronald W. Hilton in his interesting read Managerial Accounting – Creating Value in a Dynamic Business Environment:
Clarify the decision problem:
What problem or effect do you want to solve with going international? A possible motivation can be, for example, being less depended on the home market.
Specify the criterion:
What is the target in the new market? Increase market share, maximize profit, minimize costs? Define the framework here. Some of the targets will conflict with each other. Therefore it is important here to define the main target and add constraints. For example: the decision criterion is to gain market share, but the CPO cannot exceed € 50 or profitability needs to be achieved within x months.
Identify the alternatives:
How are we going to do it? Central or decentral? Assign a project team? Hire new people? Getting support from an agency?
Develop a decision model:
This is a simplified representation of the choice, the criterion and all the constraints. We call this the business case.
Collect the data:
This is the most important task of the marketing analyst: selecting the required data to make a decision model.
Select an alternative:
The investment decision can be evaluated properly against other opportunities.