Simon Sinek’s “Start with Why” has been one of the most inspirational TED Talks and ideas ever since the publication of his book “Start with Why: How Great Leaders Inspire Everyone to Take Action” back in 2009. This idea is universally applicable and the language services industry is no exception. Understanding why you’re entering a new market should come first. This should then shape your go-to-market and localization strategies, and help define “how” and “what.” So let’s talk about the six most common business reasons for entering a new market, and how companies make the go/no-go decisions.
Reason 1: Financial
This is obviously the most straightforward reason. Your company believes that there’s a good reason to enter this new market, so you will need a localized service or product. You’ve listened to your customers, your sales team and your channel partners, and there’s a solid reason for you to go for it. You’ve done your cost benefit math and things check out. In this scenario your final decision will be based almost entirely on the financial analysis.
Reason 2: Legal requirements
You have an existing localized product, but because of national laws you’re required to provide the product in additional markets and languages (e.g. in South Africa). In other cases, there may be government requirements to provide localized products and content if you have a local office, or you may first need to establish a corporate legal entity in order to sell products.
In these scenarios, your final decision will be based upon the overall net revenue value of being able to legally do business in this country, and you may actually take a loss on the localization of the product itself for the greater business goal of being legally compliant and allowed to sell in that market.
Reason 3: Business strategy
Your company determines that a particular language or market is very strategic for the global rollout. You may want to establish a beachhead against competitors moving into the same market, maintaining a minimal presence in an attempt to rapidly respond to any encroachment.
In this scenario, your final choice will be based less upon short-term financials from the project, and more upon the long-term strategic value that you place on this market and the overall net revenue over time. You may actually take a short-term loss on the localization in favor of the greater business strategy.
Reason 4: Partnerships
Your company enters a partnership or joint promotion with another company. Your partner thinks that this market is very important to their business, they need a localized version, and they look to you to provide it because you have proven experience in it.
In this scenario your final decision will be based on the overall net value of the new partnership — what it brings to your company — and less upon the incremental sales from a localized version. Once again, you may actually take a short-term loss on the localization itself in sacrifice for preserving this new partnership.
Reason 5: Competitor pressures
Competitors, either international or home-grown, are providing the good or service in a localized form already. Sometimes they provide the same good or service, sometimes it’s an alternative to your product, and sometimes it’s just a public announcement of a future product. Suddenly all eyes are on you to see how you’re going to respond. If you don’t follow suit, you risk losing market share, falling behind and being squeezed out of the market.
In this scenario you are treading water and starting to lose ground, and your decision will be based upon the value of the potential loss of your existing customers, plus the value of any incremental sales or customers you can steal from the competition with your newly-localized version.
Reason 6: Managerial fiat
Your manager, or somebody in your chain of command, tells you that they want to have a product or service localized. With little room for discussion or opposition, your decision will be made essentially on the basis of wanting to keep your job.
Business decisions usually involve several of the above reasons. Some of them are tied to immediate revenue, while others are tied to a future or secondary payoff. As you’re doing the calculus of deciding whether to go into a new market, you may find that these considerations may be in conflict, or they may point to different conclusions. The trick is to understand the relative weight of all of the factors, and then thread the needle of making the final choice.