4 Steps medical device producers should be aware of when considering to enter a new market
Expansion of a business into a new market is essential and important step for your company however it
doesn't always seem exciting due to various reasons such as getting out of comfort zone which creates a discomfort for a management to a certain extent, uncertainty about how market will react to your product, whether you have the right product mix, customers perception towards your product, cultural and language barriers and the list goes on.
So you need to have a well thought out strategy to make new market entrance a success. I would like to out line below 4 steps that I think are essential when planning your journey with taking your business beyond the local borders.
1. Research the key economic/business indicators that directly relate to nature of your business and your product
When entering a new market most companies tend to consider factors such as GDP per capita,
overall healthcare spending, demographic indicators such as population, life expectancy and these factors are important however we should dig even deeper, and the more specific we are the better.
You need to have a good understanding of the market volume and it is not an easy task, in some countries you can have access towards data such as the amount of similar items/products to yours imported over a certain period which gives a good understanding if it still makes sense to even consider expanding. Some companies local laws have to publish their annual financial reports which collectively gives you an idea of the over all volume of the market
Look if any of your direct competitors are already present in the market if yes, that might be a good sign since they might be there for a good reason and on the contrary if there are no competitors present that doesn't necessarily mean the market is not lucrative, one of the reasons behind this could be the fact that there is a high cost of entrance which we will dicuss in step 2. Sometimes absence of competitors could be a simple sign of "No Go".
Make the market analysis as detailed as possible, once you have all the data you can go on and make your own assessment, consult with other industry experts especially those who have experience with doing business in your target market.
2. Cost of market entry
When we talk about the cost of market entry it is really a combination of things that will matter. When I mention the cost I don't refer only to the financial aspect of the matter but also the timing aspect. And if these two eventually play out well together it is definitely a good news for your business. To give an example, most countries are lifting some implications related to product registration and marketing clearance that is normally A expensive and B time-consuming which was and is one of the key factors in entering one or another market.
Import duties - preferential/low import duty and low VAT rate for medical devices are good for the business since it is reflected on cost of the good for the customer and doesn't affect your company cashflow to a large extent which is key at an initial development phase of the business especially when the import duties and VAT is paid upfront and it takes time to sell the goods and get paid over time.
3. Explore different scenarios of business development
Chambers of commerce is a good way of meeting new local partners, so considering it is not such a big deal to get into one of those it is definitely worth trying.
Get a help from your embassy in the target country since they have special departments with people who are dedicated towards building and developing economic relationships, it is part of their mission to introduce companies like yourself to local counterparts.
Check out local events such as exhibitions, visit the event as a visitor ahead of buying a stand or sponsoring it since you want to make every dollar invested worth. And if does meet your expectations you can take part as a sponsor in the next time around.
Another good way of finding your potential business partner is through online business forums or professional social networks such as LinkedIn, become part of the group and there you have thousands of people with the kind of ability or business credentials you are looking for.
4. Get someone on board with good local expertise
It is all about the people with the right work attitude and most of all the ability, and finding your top talent is not an easy task at all. You should be on a constant look out for talents and it is a never ending process, but when you do find the one with the right capabilities things get much easier for you.
Get someone local ahead of putting together your marketing and sales strategy since it is highly likely that your local employee will be aware of things you should consider doing in terms of sales and marketing to have a better impact on you bottom line.
Once you are done with the 4 steps, and you still have strong reasons to move ahead then start planning you sales, marketing and financial execution strategy.