6 Case Studies on Effective Expansion Strategies

Stepping into the international stage is a compelling aspiration for many companies. Broadening geographical reach offers a means to diversify business operations and reduce vulnerabilities stemming from overdependence on a singular region. It also presents the opportunity to attract fresh partnerships, elevate global brand visibility, and unlock novel revenue streams. Here, we delve into how strategic marketing research can streamline the process of venturing into foreign markets, making it comprehensible and actionable for startups.

When Business Goes Beyond Boundaries

Numerous companies approach us, having already established their presence within a particular market niche in a specific region and now being ready to take the leap into expansion. Their ambition is grounded in economic rationale. This drive could be triggered by shifts in geopolitical landscapes or macroeconomic conditions, such as economic downturns, the imposition of new trade restrictions, additional state regulations, and more. In such circumstances, businesses are compelled to search for potential markets in alternative regions where the business ecosystem seems more conducive.

To optimize scalability costs, retaining the fundamental components of the business model is prudent. However, adjusting products and promotional strategies to align with the cultural idiosyncrasies of new regions is imperative, and this adaptation process should be anything but haphazard. Deciphering the path of adaptation demands the validation of the preferences of new consumers and the testing of product hypotheses. Market research, country scoring, audience segmentation, behavioral analysis, and preference evaluations all serve as invaluable tools for these objectives.

Both standardized and innovative methodologies exist. Examples include the Customer Journey Map or T.R.A.P. (DUAMENTES company’s methodology for uncovering latent needs, motivations, and decision-making intricacies in the purchasing process within context). Research conducted using precisely tailored methodologies empowers the formulation of well-informed strategic decisions as companies navigate the road to international expansion. Drawing on recent business cases, let’s discover, how this translates into practical application.

Securing Investments

Hypothesis testing allows for the refinement of business goals and provides a foundation for securing additional investments. Market Finance, a company operating in the fast-paced realm, managed to approach investors with a well-founded concept for a “Buy Now, Pay Later” (BNPL) service tailored to B2B marketplaces in the UK.

To secure funding, it was crucial to showcase a customer base in this market. Leveraging the expertise, DUAMENTES experts conducted research to determine the alignment between the product and the market (Product-Market Fit). This effort yielded objective data for investors regarding the product’s prospects and its potential financially capable audience. As a result, Market Finance secured a long-term financing injection of £100 million from Deutsche Bank. Precision in assessing the product’s alignment with the market spurred a rebranding initiative. The transformed entity, Kriya, emerged as a fintech platform that, in 2022 alone, facilitated over £20 billion in business payments and extended more than £3 billion in credit to small and medium-sized enterprises across the UK.

Immersing into a New Culture

While intuition and general data play their roles in entering a new market, they alone are insufficient. Leveraging validated insights proves to be significantly more effective. For instance, the coffee shop chain Drinkit successfully entered the UAE market. Preliminary research encompassed market analysis, the search for product-market fit, and an exploration of consumer experience intricacies (UX) within the Arab world to verify the product’s positioning.

One of Drinkit’s key advantages lies in its user-friendly application. Therefore, DUAMENTES experts conducted a separate usability study among potential users, identifying areas for improvement. The team then made necessary adaptations. During this research, it was realized that the UAE market’s multiculturalism stood as a prominent trait. Consequently, an option for automatic language switching within the app was introduced, paired with the user’s phone interface language.

According to Ekaterina Borodich, CEO of Drinkit, the research revealed the fact that diversity of cultures and nationalities in new markets, especially in Dubai, presents both a significant challenge and a simultaneous opportunity. And is paramount to equip the team with concrete research-based recommendations for refining the product.

Discovering a Niche in an “Unexpected” Market

Exploring new niches within a single region can serve as a strategic avenue for scaling. Insurance company Mainsgroup, operating in Eastern European region, chose to delve into the reasons behind the lack of success of many insurance products and solutions, particularly health insurance on Eastern European market. This endeavor involved in-depth analysis and interviews with various segments of the target audience to comprehend how people make decisions regarding insurance matters. The outcome revealed two distinct audience segments, each harboring unique challenges and latent needs.

According to Mainsgroup, the research was imperative to dive into the industry’s prevailing issues, grasp the primary pain points of the audience, and make informed decisions during product development.

Leveraging these uncovered insights, Mainsgroup launched the online platform with one of its sections serving as an aggregator for health insurance. This platform empowers clients to assemble a necessary insurance program in real-time. Interestingly, one of Mainsgroup’s solutions ranked among the top 10 out of 320 startups from 42 countries in the MENA InsureTech Rising 2023 competition held in Qatar. The team is currently working on a pilot with leading insurers in Qatar, further solidifying their market presence.

Analyzing Markets by Country, Not Regions

Countries within the same region can significantly differ in the behavior and preferences of the local audience. For a renowned medium sized FMCG company expanding to the European market DUAMENTES experts delved into decision-making models and tested naming variations, designs, and primary messages on product packaging. When selecting countries to launch the product, they pinpointed the most promising ones based on the availability of local partners, expertise, and competitive landscapes.

In Germany and the United Kingdom, experts conducted in-depth interviews with elements of concept testing, where respondents were presented with various packaging options. The testing results revealed significant differences between the markets of the two countries. For instance, British respondents paid attention to whether the packaging was recyclable, whereas German respondents didn’t consider this at all. Instead, they were interested in seeing a vegan product composition. This research aided in defining the product positioning strategy.

Declining to Enter a New Market

Not every new idea deserves implementation, and a well-founded rejection based on objective data can be the only correct decision. The example of entrepreneur Alex Dvoeglazov, co-founder of the startup Ficus, highlights the importance of testing hypotheses before initiating product development.

Upon receiving research results in the entertainment and gift sector in the USA, the entrepreneur chose to abandon the idea of international expansion. It turned out that the initial concept of a monthly subscription for gifts and surprises did not find support among users in the USA. DUAMENTES experts conducted deep analysis of competitors and the original business model revealed that people simply weren’t willing to pay for the proposed product. Thanks to the research data, the company, by expert estimates, saved up to half a million US dollars and three years in terms of product development, launch, and promotion.

Another example involves the virtual mobile operator To The Moon Mobile, which opted not to pursue a new business idea in the UK market. The company sought research driven by international team of experts at DUAMENTES to delve more deeply into its users’ preferences and enter a new niche in the neo-banking sector. The initial idea didn’t resonate with potential clients: people were not inclined to entrust their savings to a mobile operator. Instead of venturing into a new niche, the team decided to enhance their existing product by refining its functionality and design.

In Place of a Conclusion

Choosing to expand into international markets is a pivotal decision that can offer a company fresh opportunity for growth and profitability. However, such a choice requires significant dedication and financial commitments. When devising an expansion strategy, it’s imperative to lean not solely on instinct and readily accessible information, but also on concrete data meticulously acquired through thorough market and consumer behavior research. Investments in research consistently yield returns—whether in the shape of a sought-after product and business expansion on one front, or in terms of conserving resources, time, and reputation on the other.

About the Research

The qualitative researches were conducted for the aforementioned companies by Global Research and Development company DUAMENTES. Over 20 methodologies, including the T.R.A.P framework, deep structured interviews, usability tests with respondents, and others, were implemented.

To get full reports, contact Duamentes.