Identifying new markets can be exciting and overwhelming at the same time. It’s exciting because your organization has the opportunity to grow the business, and it can be overwhelming because strategically establishing new markets takes time and effort by your senior leadership team to define the right new markets.
In order to determine and define your new markets, you and your leadership team need to take the time to create a well-defined plan that takes into account external and internal factors, which will have an impact on the newly defined market(s). Let’s take a closer look at what external and internal factors really are.
BusinessDictionary.com defines external factors as outside influences that can impact a business. Various external factors can impact the ability of a business or investment to achieve its strategic goals and objectives. These external factors might include competition, social, legal and technological changes, and the economic and political environment.
When identifying new markets, your organization must have a clear understanding of the potential client population in order to determine if a newly defined market is the right market for your organization. In line with this, you will need to understand what these new potential customers want and if they have any special decision-making concerns in order to determine if there is a need for your product or service in this area. Additionally, you need to understand who will be your competition and how does their product/service compare to yours. Another critical piece is understanding the emerging trends and how they will impact your business both short and long term. If you haven’t taken the time to perform an external analysis for your organization, now is probably a good time to do so.
In addition to evaluating the external factors, internal factors need to be considered as well. BusinessDictionary.com defines internal factors as inner strengths and weaknesses that an organization exhibits. Internal factors can strongly affect how well a company meets its objectives, and they might be seen as strengths if they have a favorable impact on a business, but as weaknesses if they have a deleterious effect on the business.
When evaluating your internal factors, there are really three elements you need to consider. The first is your structure. Your organization needs to be structured, so you can serve new markets and customers without compromising your vision and values. The second are your resources. It is critical you have the resources available to service new markets and customers. Finally, you need to understand your areas of strength and opportunities as well as your areas of limitations and threats. If you haven’t taken the time to perform an internal analysis for your organization, now is probably a good time to do so.
Strategically understanding and evaluating all external and internal factors are important steps in making the best decisions when looking to embark on a journey into new markets. Take the time necessary to make the best decision for your organization.