Rome2Rio CEO explains the four pillars of a global expansion strategy

It has been a wild few months for startups around the world, particularly in tech where funding has been cut and mass layoffs have occurred, and this is just the beginning. Any startups eyeing global expansion may be considering putting plans on pause but that doesn’t have to be the case if they have a robust strategy in play. 

Expanding globally is a huge achievement but it won’t happen overnight or without a solid foundation — especially in this climate. 

A good expansion strategy needs to have the base foundation laid and four key pillars put in place to hold the structure all together. Just like building a home, there are lots of details and no small step should be skipped if you want it to be a lasting success. 

The foundation

It sounds simple, but a lot of companies often struggle to communicate what product or solution they are selling. Being able to articulate this, as well as what intrinsic need it is solving for customers and whether or not it solves these problems in multiple geographies are the base foundation to your global expansion strategy — you cannot build without them. 

Comprehensive research on the markets your business is trying to expand into is imperative to ensure compatibility with local users. Different markets have different nuances and different needs. Learning these differences through research such as user surveys and competitive analysis will allow you to figure out your company’s place in the market. 

Once the base has been established, you’re able to build the pillars that will hold the company’s global expansion plans up. 

Pillar one: Product

The first pillar is product, and articulating what it is and what it solves is essential. Depending on the need your product serves, decide on the approach to take. 

There are two types of products that differ in how the user experience scales in multiple geographies: 

1. Standardised: A product that’s use cases are generic enough to be able to apply the same solution across markets without the need to customise it for each geography. The one size fits all approach is less common for global products though.
2. Adaptation needed: Most products will fall under this category. This is where a product needs to be adapted or localised due to different patterns of usage in different geographies. Brands may need to do deeper learning about how to fit the product in the market because of the problem it is trying to solve and how users perceive it. McDonald’s is a great example of a brand that does this well, customising its offering in line with cultural differences in each market.

Once this is known, the amount of technical and product innovation or investment needed will be clear. Some products need more time to test in the market before a full push as the product-market fit can be ambiguous to start with. 

Pillar two: Marketing and distribution

For this second pillar, the focus needs to be on identifying the channels through which the product and its messaging will be distributed. As a newcomer to the market — and as a start-up, that is just starting to scale and may not have the brand awareness of more established players – it is important to be seen and easily discoverable for your target audience. 

How you approach this will be guided by the product vision and fit with the market. Depending on the interest for the product, a channel strategy may need to be put in place. The strength of existing channels where your target audience comes to look for a product like yours can be very useful to launch and promote your entrance into the market. 

Pillar three: Commercial

While it may sound obvious, commercial success isn’t easily achievable without a plan of attack. This pillar is all about finding your position in the market and a business model that will help achieve the return on investment which is key to any expansion plan. 

Without this pillar, global expansion plans won’t typically be supported. For startups to grow, funding is essential. While it may not be as easily accessible as it once was, providing a strong strategy for commercial success will help towards securing funding to support plans for international growth. 

Sometimes this requires openness and innovation as price and supplier relationships give the business the margins needed. 

Pillar four: People

The final — but arguably most important — pillar is people. Finding the right people and team structures to easily integrate with the base or core team is often an underestimated aspect of expansion. 

When businesses expand, they typically build on top of their existing strengths. Most of the time, the strength is carried forward by the people who built it or who carry the knowledge.

The ongoing success of the expansion is tied very closely with how the integration of the new part of the business works in synergy with the core business, as well as how well the team drives the business case against capable competitors in the new market. 

Bringing the house together

Global expansion takes much planning but knowing the steps to take and what foundational pieces need to be put in place will go a long way in helping make it a success. In a tough market like we are in now, for startups to step into scale-up territory and expand their business into other parts of the world successfully, it takes serious planning and consideration.

After all, no one wants to see their house fall down.