Enhancing Business Internationalization

The Business Internationalization Enhancement framework consists of three tools: Goal and KPIs, International Market Set, and Market Opportunity Evaluation. These tools are designed to help businesses identify, evaluate, and prioritize new internationalization opportunities systematically. It provides a structured framework for exploring growth avenues and aligning resources with high-potential opportunities.

By working through the tools provided below, your team (or your client) will gain a clear understanding of the key aspects of your expansion, create a customized internationalization strategy, and be ready to take actionable steps towards entering your next international market.

How to use this tool?

Why are you considering international expansion?

In this section, identify the primary reasons for entering new markets. Possible motivations could include:
– Increasing customer base
– Accessing markets with favorable regulations
– Reducing development costs

How will you measure the success of your international expansion?

Once your goal is defined, establish clear KPIs to track your progress. Use SMART indicators to set achievable objectives, such as acquiring 2000 new customers in the new market within the first year or finding 5 new distribution partners in the next three months.

You can save your progress in the tool by clicking the “Save as Draft “button at the bottom of the tool

1. Internationalization goal

Why are you considering international expansion?

Examples:
- Diversify Revenue Streams
- Tap into New Talent Pool
- Leverage Economies of Scale
- Access Emerging Markets for Growth Potential

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2. Results (KPI’s)

How will you measure your internationalization performance?

Examples:
- Percentage of total revenue generated from new international markets.
- Compare the cost of recruiting and hiring talent in international markets versus domestic markets.
- unit costs decrease per year as production volume increases in international markets.

! Remember, a good KPI should always always be SMART:

(S) Specific: profit/ # of customers
(M) Measurable: measured by accessible numbers;
(A) Achievable: something your company can actually achieve;
(R) Relevant: Of course, this KPI needs to be of high interest to your company;
(T) Timed: for one year, for example

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How to use this tool?

In this tool you have to identify a comprehensive list of new international markets where your business could expand.

The identification process begins with De-Linking, where you temporarily step away from the company’s existing technologies, teams, and market context to focus solely on your core value proposition and internal capabilities. This means understanding the customer problems you solve, the unique benefits you provide, assessing the resources you have, and identifying enablers like customization or existing partnerships. Once you have a clear picture of your internal strengths, the next step is Re-Linking, where you match these capabilities with specific criteria that define your ideal international markets. This includes considering geographic regions, industry sectors, customer segments, and ease of market entry. This analysis allows you to identify locations that fully or partially align with your strengths.

Value Proposition

What pains are you solving and how?
– Focus on understanding what customer problems you solve and how?
– Are the problems universal, or do they require adaptation?

What gains are you providing, and how?
– Think about the benefits that customers gain from your product or service.

Resources
– Consider financial, human, and government resources available for international expansion.
– Do you have a dedicated international team or financial backing?
– Is there government support for internationalization to particular markets?

Market-entry Enablers
– Easy Customization: Can your product or service easily adapt to international demands?
– Existing Partnerships: Do you have partnerships or distribution networks that will ease market entry?

Secondly, after identifying internal strengths in De-Linking, the next step is to Re-link and match those with the criteria for new markets. Here, you have to list the criteria your ideal target market should meet, adjusting them based on your company’s needs. And afterwards connect your strengths, market criterias with specific markets that fully or partly align with these factors. You can identify these markets by considering various factors, such as geography, market segment (B2B vs. B2C), sector, type of distribution, and other relevant aspects.

Identify new market opportunities based on your unique capabilites

1. Identify the core abilities and how they translate into value to your customers (know-how about the process, a rare resource, special capability in manufacturing etc.)

2. Identify the criteria your ideal target market should meet, adjusting them based on your company’s needs and capabilities.

3. Connect your strengths, market criterias with specific markets that fully or partly align with these factors. You can identify these markets by considering various factors, such as geography, market segment (B2B vs. B2C), sector, type of distribution, and other relevant aspects.

You can save your progress in the tool by clicking the “Save as Draft “button at the bottom of the tool

1. Unique value proposition and strenghts (De-Linking)

Value proposition
(what pains are you solving, what gains are you providing and how)

Example:
- Energy-efficient machinery
- Predictive maintanance
- Customised manufacturing capabilities

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Resources
(Financial, Human, Government support)

Example:
- Manufacturing facility with scalable capacity.
- Labor force skilled in AI
- Government tax incentives for exporting machinery to US market

0 / 2000

Market-entry enablers
(easy customisation, current partnership)

Example:
- Current distributor have network in Spain and Scandinavian market

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2. Criteria for new markets

Market-entry enablers
(easy customisation, current partnership)

Example:
- Current distributor have network in Spain and Scandinavian market

0 / 2000

Resources
(Financial, Human, Government support)

Example:
- Manufacturing facility with scalable capacity.
- Labor force skilled in AI
- Government tax incentives for exporting machinery to US market

0 / 2000

Value proposition
(what pains are you solving, what gains are you providing and how)

Example:
- Energy-efficient machinery
- Predictive maintanance
- Customised manufacturing capabilities

0 / 2000

Market-entry enablers
(easy customisation, current partnership)

Example:
- Current distributor have network in Spain and Scandinavian market

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3. Choose your next markets (Re-Linking)

Match your strengths and criteria with potential international markets: identify markets that fully or partially meet your selected criteria, where you can create value. You can identify these markets by considering various factors, such as geography, market segment (B2B vs. B2C), sector, type of distribution, and other relevant aspects.

Example:
- German automotive manufacturing industry

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The Market Internalization tool focuses on identifying international market opportunities with the highest growth potential and the lowest entry barriers. Potential strategies for international expansion are then considered.

Conduct a separate evaluation for each product or service. If multiple products or services are being considered, repeat the full analysis for each one individually.

(Based on ‘Competitive Advantage: Creating and Sustaining Superior Performance’ by Michael Porter, 1985)

What this tool evaluates?

Each market opportunity of the company is subjected to certain facilitating factors and barriers at the same time. It is important to recognize and analyze these different factors, as they impact how effectively the company can implement its business model. The nine business model building blocks help to define how the company carries out its business model and transfers its value proposition to its customers. However, when expanding to other markets, it is crucial to reevaluate these building blocks to understand how the model could be adapted to different circumstances, taking into account the specific facilitating factors and barriers present in each new market.

Why use this tool?

You assess the attractiveness of potential market opportunities by evaluating their value and growth potential, and challenges related to creating value in new markets identified. This tool allows you to visually depict the evaluation of your market opportunities so you can better grasp their upsides and downsides and compare them with each other. You rate each option on both dimensions, and different market opportunities are located on the map automatically.

How to use the tool?

Once the De-Linking and Re-Linking steps are complete, the next steps in the process would involve prioritizing these markets based on the Attractiveness Map (assessing the market’s potential and barriers) and creating an Agility Plan (evaluating the company’s ability to enter these markets).

Attractiveness Map

Each market opportunity of the company is subjected to certain facilitating factors and barriers at the same time. It is important to recognize and analyze these different factors, as they impact how effectively the company can implement its business model. When expanding to other markets, it is crucial to reevaluate and understand how your business model, technology, product or service could be adapted to different circumstances, taking into account the specific facilitating factors and barriers present in each new market.

Assess each international market for:

Potential: competetive advantage, flexibility, efficiency, economic viability.
Barriers: duration, expenses, time to revenue, external risks.

Agility Map

This step helps you to understand on which market opportunity you should be focused on, and which should be left as a backup plan. After evaluating all market opportunities on Attractiveness Map, pick the one that has the biggest potential, and lowest barriers and write it in the middle (PURSUE NOW). But there are other options that you just want to keep open in which you invest a little along these lines of the real options cause markets or products are related. Also, there are other options still that you want to place and store the rest. Options that you don’t do anything about right now, but they might be valuable at some point, so you don’t want to forget about them, and you want to keep them in mind.

This step helps you to create a smart portfolio of options around this focal international market opportunity, meaning options that could be growth options (keep open), and the ones that could be backup options (place in storage).

How to complete the tool?

The attractiveness of a possible market opportunity is based on the evaluation of market potential factors (STEPS 1-2) and on the market barrier factors in capturing this value (STEPS 3-4) hence the y-axis of this map is the potential dimension and the x-axis is the barriers dimension. The rating of each opportunity on both dimensions result in its location on the map (STEP 5). Eventually, the map is divided into four main zones based on the level of potential and the level of challenge.

First and foremost, this is a learning process. It enables you to ask the most important questions before making such a critical decision. So, even if you are not sure about the exact score that you should assign to the different factors, you can rest assured that you have not missed any important consideration. Moreover, use this comprehensive checklist to figure out what are your main assumptions that still need to be validated and which action items are most appropriate to do so.

Strive to turn your hypothesis into knowledge. A learning process usually begins with hypothesis or beliefs that you have about an opportunity that you want to analyse. Yet a valid evaluation should not be based on beliefs. Try to turn your critical assumptions into knowledge as you progress through the evaluation and the scoring process. Perform desk research, and make sure to go out of the building and talk with customers and market experts to get accurate evaluation on market potential and market barrier factors.

STEP 6 helps you to understand on which market opportunity you should be focused on, and which should be left as a backup plan. After evaluating all market opportunities on STEP 5, pick the one that has the biggest potential, and lowest barriers and write it in the middle (PURSUE NOW). But there are other options that you just want to keep open in which you invest a little along these lines of the real options cause markets or products are related. Also, there are other options still that you want to place and store the rest. Options that you don’t do anything about right now, but they might be valuable at some point, so you don’t want to forget about them, and you want to keep them in mind.

This step helps you to create a smart portfolio of options around this focal opportunity, meaning options that could be growth options (keep open), and the ones that could be backup options (place in storage).

If you encounter any issues with this tool please click here to open it into a new tab in your browser and if the issue persists contact support

STEP 1. Market potential Factors

How would you evaluate the competitive potential of your product/service in the specific market?

Market potential Factors

Quality Ability to satisfy customer needs, expectations, is it better than current solutions in the market?

Flexibility Ability to adapt production/services volumes or customise (differentiate) to the specific needs in the market?

Efficiency Ability to maintain high efficiency processes/business model compared to competition.

Economic viability What is the potential market size, growth and ability of customers to pay.

Scales

Empty

High

Mid

Low

Not evaluated (yet)

STEP 2. Evaluation of Market opportunities

RELATIVE POTENTIAL OF MARKET OPPORTUNITIES: Evaluate each market opportunity by considering factors - quality, flexibility, efficiency, economic viability.

Market opportunity

Quality

Flexibility

Efficiency

Economic viability

TOTAL

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STEP 3. Innovation ease (change implementation) factors (INNO)

Relative ease of innovation - how easy are these factors (burdens) of entering new markets?

Market barrier Factors

Duration Time needed to implement innovation/change effectively. (If much time is needed rate - 1, if little time is needed rate - 3)

Expenses Investment outlays and operational costs changes, financial burden of implementing new market oppotunity. (If high expenses are expeted, rate - 1, if little, rate - 3)

Time to revenue What is the gap between product and market readiness, length of sale cycles (If it takes long time to earn expected revenue, rate - 1, if revenue could be earned quickly, rate - 3)

Risks Uncertainty associated with new market/innovation/change, resitance; internal and external. (If there are lots of uncertainties, rate - 1, if there are few uncertainties, rate - 3)

Scales

Empty

High

Mid

Low

Not evaluated (yet)

STEP 4. Relations between company primary and secondary activities, and innovation ease factors

RELATIVE EASE OF INNOVATION - how easy to change are certain activities when INNO factors are considered?

Market opportunity

Duration

Expenses

Time to revenue

Risks

TOTAL

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STEP 5. Relations between potential of the opportunities identified to market barriers

POTENTIAL OF OPPORTUNITIES vs. MARKET BARRIERS

Market opportunities

Potential

Barriers

High potential, but big barriers

High potential and low barriers

Low potential and big barriers

Low barriers, but little potential

STEP 6. Identification of opportunities with high potential and low market barriers for internationalisation agendas

Place in storage

Keep open

Pursue now

Internationalization Resources

Miro board features the Internationalization Stakeholded Map that provides the list of organizations from the Baltic Sea region that can support your internationalization activities. It highlights the key stakeholders, particularly multipliers, across a broad spectrum of the innovation ecosystem. These include organizations involved in SME support, business promotion, research, public policy, financing, and more.

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