Why global expansion fail...reason #239

There are many reasons why brands going global fail. I've experienced and seen some of them first-hand, and I have learned about some of the many pitfalls. I wish to tell you about the one that I believe will make the most significant difference for your brand.

We have all gotten over that time when people don't research the market they enter. They check out the market numbers, make sure the culture fit, and see if there are behaviours they need to adapt to. One thing that doesn't seem to cross their minds is adapting the problem they are solving to the market. 

For brands in a small market like Norway, global expansion is considered a 'must' if you wish for greatness for your brand. However, this eagerness for global expansion and dominating market shares in domestic markets have made it challenging to actually adapt their marketing and communication to the region they're entering. And I'm not talking about the cultural stuff - people know that. 

People seem to be unaware of the different market functions happening in the different markets. One of the most striking mistakes I see brands make is using market plans for their existing market and adapting them to the new market's culture and behaviour. People think it's enough to adapt to the culture and behaviour, but they don't consider that the problem they solve in their domestic market is already solved by another solution in another market. 

I'll give you an example: A Norwegian clothing brand will have big success domestically. While they started off with niche products, they keep expanding into new verticals to sustain growth. They manage this successfully, and they can acquire a great market share. Soon they need to enter new markets to grow.

This is where a company make mistakes. When entering a new international market, they behave like a market leader, a strong owner of the solutions to several problems. Because that's what they are in the domestic market. The problem for companies in smaller countries is that they'll most likely find many of the problems that their products have been solving domestically already have a solution abroad. The Norwegian clothing brand makes great jackets, pants, shirts, t-shirts, etc. They have many strong associations, but entering the new market without clarity and specificity makes it hard for the consumer to grasp what really makes them different from the competitor.

Even with superior products, the company will find it challenging and expensive to penetrate the market because someone else is owning the solution of their problems in the mind of the customer.

So what to do?

There is a very 'simple' solution to this. You just have to look back. When you enter a new market, you have to behave as if you are new to the market. Even though you have benefited from the existing organization and some spillover-effect. If someone else owns the solution to the problems your product or service solves domestically - you should find a new problem and create a new category where you can become the category king of that market. You have to be different. Even if you find just a small unserved niche, you can achieve great market penetration with category expansion through effective use of Superconsumers, and over time, your category will take over the existing category.