International Market Entry Strategy
Today is a world of global markets and global competition. Those technology organisations that wish to survive in this environment must quickly rise to the challenge and there are significant benefits in doing so.
When we look at the global market for Information Technology spending we see that the US represents 40%. This means that 60% of the entire market opportunity lies within other international territories. It is interesting that when viewed from the perspective of an international vendor the US market represents a huge opportunity in just one country. These markets represent massive opportunities for rapid growth.
Increased Market Valuation
Since market valuations are based on revenue any significant increases in revenue will positively impact the market value of the organisation. For those that get their strategies right, revenue from International markets can often represent more that 40% of the total. This represents a very significant increase and can often be achieved in a very short time. The ability to grow rapidly will result in a much higher valuation than a similar organisation in the domestic market.
The infrastructure needed to generate these increases is much smaller than they would be to create the same increases in the home market. Thus the pressure to drive sales through international channels happens at a much earlier stage of the organisations growth than used to be the case.
The Internet Effect
The nature of the Internet has changed the competitive landscape dramatically. These days the moment you bring a product or feature to market in any territory anyone can see it and in many cases run and test it. This has spawned a new type of competitor where local companies specifically target new technologies to replicate their functionality for sales in the local market. Arrive in a market too late and you could find yourself competing against these local ‘clones’.
The Internet drives demand by increasing awareness. New technologies are sought out by leading companies in the drive to remain competitive. These companies will sometimes buy from a foreign organisation, but more usually they want to know that they can receive local support and services. Those organisations that are quickest to establish themselves in these markets will immediately grab market share.
Since the pressure is on to expand into International markets as soon as possible, it is most often done through partners. The use of a carefully designed and managed channel of partners can result in much stronger net margins on sales through these organisations. Whilst a margin is given to the channel for each sale, much of the cost associated with selling, marketing and technical support is absorbed by each organisation.
For US companies their international channel business can be very
profitable. Studies have shown that many of these organisations produce
as much as three times as much profit as their domestic business.
So the question is not, should you expand or even when, the question is how?
Through years of practical International channel development experience, ProSecta management are acutely aware of the challenge many Technology organisations face when confronted by the need to expand into International markets.
Our shared goals are to minimise your risk, keep costs as low as possible, achieve an early ROI and create a sustainable and profitable business for you.
ProSecta has developed an approach based on our ‘Four Cornerstones of Channel Success’, allowing us to create processes that satisfy your unique requirements. These can include:
We have access to the very latest market research through industry respected sources. We have a constantly updated and extensive database of International Partner information. This has been created for specific technology markets and allows us to significantly speed up the recruitment of your partners.
In many cases, and in particular for those organisations that understand the need to create an International presence at the earliest time, ProSecta can offer a fully managed outsource service. We do this on a shared risk and reward basis giving you the security of knowing that we are motivated to achieve your goals.
Why a Channel Strategy?
Look at any market sector and you will see clear winners. These winners are defined by their ability to ‘buck the trend’ when markets are weak and by being able to supremely capitalise on markets when conditions are good.
The Four Cornerstones of Channel Success™
Defining the Channel Mix
All successful channel strategies are built on a foundation of customer to channel alignment.
Designing and building your channel
Our goal is to help you create an organised, motivated, market-focussed, high performance channel engine.
Developing a highly leveraged direct sales team
Direct sales teams are an indispensable part of the channel mix for many organisations. These assets represent a significant level of historical and ongoing investment and need to be leveraged to achieve the greatest return.
Getting the Best from your channels
Multiple channel systems can be highly complex and managing them to gain optimum performance is not a simple process.
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