Today’s Small and Medium Sized Enterprises (SMEs) operate in difficult circumstances. Economic globalisation, empowered consumers and constantly evolving technology makes competing with rivals even more challenging. Overseas expansion is one way SMEs are looking to increase market share.
However, selling products and services in new markets brings a host of challenges to be overcome. One of these is unfamiliar competition in new regions. It is critical global SMEs are confident of competitive advantage prior to entering a new market to increase their chances of success.
What is competitive advantage?
Competitive advantage is the unique value your business offers customers when compared to others offering similar products or services.
Identifying and building SME competitive advantage in global markets
In order to find and build competitive advantage when expanding overseas, SMEs must be clear about:
What is the real advantage your product or service offers to your prospective overseas market? The benefit must be something your target market really needs, and it must offer good value when compared to similar items already available.
The more detailed picture you can paint of your overseas target market, the more successful your competitor analysis is likely to be. Build a detailed buyer persona for your customer in your new market that contains:
- demographic information
- where they get their information
It goes without saying, in order to analyse your competition you need to know who they are. While SMEs are likely to have high awareness of domestic competition, when expanding overseas your competition may be very different. When conducting research remember to look outside of your own industry. Also consider how impending technology may impact your product or service.
How to find your competitive advantage as a global SME
Often competitive advantage falls under one of four categories and it is a matter of adopting these to the country you intend to expand into.
Does your business offer something different to the competition in your domestic market? If research indicates this will also be the case in your overseas market then that will be your competitive advantage. Your business may provide a high quality or unique product or you may deliver a service faster than others.
Another way your business can differentiate itself from competition overseas is through innovation. There are a variety of ways SMEs can innovate when expanding overseas including how you connect with others to add value and how you organise and align talent.
Differentiating via focus means your business services your target market better than anyone else. This differentiator is particularly common if your product is very niche and it usually involves employing at least one other strategy in tandem. So, for example, you may target high net worth individuals with your product and while doing so, offer them a really personalised sales experience.
One of the most common advantages in our globalised economy is that of cost leadership. This is where a business offers similar value at a lower price. This is usually achieved by continually optimising operational efficiency at each stage of the supply chain from production costs right up to after sales service.
No matter which form of competitive advantage sets your SME apart from the competition, when expanding overseas, having a strong full-time human presence in the region is extremely valuable. Sending domestic employees on expat assignment to a new region enables your SME to highlight unforeseen opportunities, monitor your presence on a day to day basis and to adjust plans if necessary.
If you choose to send employees overseas on assignment, talk to us about protecting their health and wellbeing with SME focused international health insurance plans, so they can access medical treatment around the world. With our modular international healthcare plans for small and medium sized businesses you can build your plan to suit the needs of your employees and your budget. Get an instant view of the cover we offer and a quick estimate for a selection of plans to suit your business.