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Just when a company has mastered business at home, it decides to seize the opportunity to expand into a new foreign market. But before entering that new market and committing resources overseas, it’s critical for business owners to understand the competitive landscape on an international level.
Identifying competitors can be as easy as running a simple Google search. But there are other business strategies business owners can use to uncover key market intelligence that can help them strike out internationally with confidence.
Venkat Eswaran, senior vice president of global services at Nair & Co., a Sunnyvale, Calif.-based firm that specializes in helping companies grow overseas, says a company should identify two categories of competitors in a foreign market.
— Venkat Eswaran, senior vice president of global services at Nair & Co.
First, business owners should find international businesses that are selling different products that satisfy the same needs as their products — in other words, who is their indirect business competition, he says. For example, a U.S. exporter of oranges may look at other popular types of fruits being sold in the target country. If the target country were Greece, businesses that sell figs and plums would be indirect competitors.
Next, business owners should look at companies that sell similar products — these are direct competitors. In the case of the U.S. orange exporter, it would identify other businesses that sell oranges to the Greek marketplace.
In order to do that, Eswaran says businesses can look at local business directories, local chambers of commerce and trade fairs. Another trick to finding foreign competitors is speaking with suppliers and potential customers. “Suppliers would be able to tell you about other clients to whom they are also selling, and customers could tell you other firms where they are sourcing their goods from,” he says.
Business owners can also ask suppliers for recommendations on international business resources, such as a trusted online foreign exchange service that can simplify the international payment process.
Laurel Delaney, founder and president of GlobeTrade, an international trade consultancy based in Chicago, says business owners should follow their gut.
“It’s simpler than you realize,” she says. “All business owners know who their competitors are — they always do. Still, it’s prudent to track what they’re doing, and where they’re going.”
Trade shows offer one of the easiest ways to gather information on international business competition, Delaney says. One of the best-kept secrets about trade shows, she says, is that business owners can walk trade shows incognito by removing their badge and just observing what their competitors are up to. She recommends going up to competitors anonymously and asking them about their products.
“I say, ‘This is a fascinating product. What makes your product better than ABC?’” Delaney says. “I’ll ask, ‘How are you doing internationally?’ You would be shocked by how much information you can find out.” In addition, it’s important to seek out pricing information from these vendors.
Another way to find out about competitors is through data mining business intelligence organizations, such as PIERS or Datamyne. Both companies specialize in trade intelligence, Delaney says.
PIERS, for example, tracks import and export information on global cargos by collecting data from bills of lading. Then that information is turned into practical data where it can be used for intensive market research and analysis.
Once business owners have obtained information about competitors, it’s easy for them to discover gaps that exist in the marketplace. The next step is finding a way to fill those gaps better than any other business.
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