“I don’t know, I’m making this up as I go!” Indiana Jones was my childhood hero growing up, but taking Indy’s famous approach when evaluating and entering a new geographical market is not the best strategy. Evaluating opportunities and costs before entering a new market or region is a crucial process that requires a comprehensive analysis to ensure informed decision-making and a successful market entry. 360 is actively pursuing new growth opportunities in the US, so this is very timely for our team. While there will always be elements of “cart before the horse” when stepping into new regions, strategic planning and strategy are key because hope can never be a strategy. As 360 continues to grow into new regions and sectors, this has been at the forefront of our strategy building. Here are a few key insights on our recent efforts and experience:
Opportunity Assessment:
- Market Demand: Understand the demand for our services and value proposition in the target region. Analyze existing and upcoming projects, regulatory requirements, and environmental concerns to gauge the market potential.
- Competitive Landscape: Assess the competition within the region. Identify major players, their strengths, weaknesses, and market share. Evaluate the gaps in service offerings to find opportunities for differentiation.
- Regulatory Environment: Investigate the regulatory landscape governing our type of project work. Compliance with local regulations is critical, and understanding the permitting process is essential to navigate potential challenges.
- Economic Factors: Evaluate the economic stability and growth prospects of the region. Consider factors such as GDP, infrastructure development, and government investment in environmental and infrastructure projects.
Cost Evaluation:
- Market Entry Costs: Estimate the initial investment required for establishing a presence in the new region. This includes legal fees, permits, office setup, travel, and any other expenses associated with market entry.
- Operational Costs: Assess ongoing operational expenses, including labor, equipment, facilities, utilities, and logistics. Factor in differences in the local cost of living and business operation expenses compared to home base.
- Risks and Contingencies: Identify potential risks such as currency fluctuations, political instability, and unforeseen challenges. Develop contingency plans to mitigate these risks and ensure business continuity.
- Talent Acquisition: Evaluate the availability and quality of local talent. Determine probability of meeting required staffing needs with the existing labor market or if additional efforts are required for recruitment and training.
- Return on Investment: Calculate the expected ROI based on projected revenue and costs. Establish realistic timelines to break even and roadmap to achieve profitability in the new market.
Strategic Considerations:
- Cultural Understanding: Appreciate the cultural nuances of the region, as they can significantly impact business relationships and project execution. Adapt approach to align with local customs and practices.
- Strategic Partnerships: Explore strategic partnerships with like-minded complimentary service providers to leverage each other’s expertise, customers, and networks. Collaborating with local firms can enhance credibility and facilitate smoother market entry.
- Technology and Innovation: Assess the technological landscape in the target region and ensure ability to implement the most effective tools and methodologies. Innovation can be a key differentiator in the competitive landscape.
- Sustainability Practices: Emphasize commitment to sustainability and environmental stewardship. Aligning with local sustainability goals can enhance our reputation and build a strong brand.
As we continue our exciting expansion into new markets like the US, Eastern Canada, and beyond, it is important to ensure we continue to come back to these strategic initiatives, adjust as needed, measure success, learn, and repeat. A thorough evaluation of opportunities and costs is paramount for a successful entry into a new geographical region. By understanding the market dynamics, mitigating risks, and aligning with strategic objectives, we can position ourselves for long-term success in the chosen market and aim our sights towards “Fortune and glory, kid. Fortune and glory”.
Thanks for reading,
Dave
About the Author
Dave Lamberton, Manager of Business Development & Marketing
Dave brings a wide range of sales, marketing, branding, and analytical experience from both the energy and hospitality sectors. Dave’s customer-focused approach to sales and ability to build brand awareness is a key asset to 360’s growth. Dave received a Bachelor of Management, majoring in Marketing, from the University of Lethbridge in 2009. He continued his education with certificates from the University of Alberta School of Business and the Canadian Professional Sales Association (CPSA).
