Successful business ventures in small markets

Expanding a business overseas is always complex. However, reading through some small market business success stories can make it seem more achievable. Learning from those who’ve done it already is encouraging. 

Below, you will discover some of our favourite case studies. These highlight the challenges firms face and their methods to overcome them. 

Case Study 1: Starbucks In New Zealand

Seattle-based coffee chain Starbucks began life on the West Coast of the U.S. However, it soon discovered it could succeed in small markets, growing its global revenue. 

During the company’s most aggressive expansion phase during the late 1990s, it struck a deal with New Zealand company Restaurant Brands Limited to set up a franchise in the country. That year, the first location opened its doors to customers in Parnell, Auckland.

Starbucks was successful because it was set up in a market similar to that of its home country. The New Zealand climate is like the Pacific Northwest’s, and plenty of people don’t mind paying a few bucks for warm coffee when it’s cold outside. 

After 20 years, the original Starbucks franchise operator backed out of a new deal, and another firm took over the company’s operations. Starbucks remains a commanding presence, taking on the country’s largest chain, Gloria Jean’s Coffees.

Case Study 2: Zara In Thailand

Zara is a Spanish clothing brand famous for its stylish attire. The company is obsessed with being at the forefront of global fashion and expanding beyond Europe. Now, the business operates numerous stores in Thailand, a market that could hardly be more different from Spain. 

Zara’s success comes from its policy of offering trendy clothes with fast turnaround times. Thais can visit its stores every month and find something novel to delight them.

However, the company didn’t simply apply its existing business model when moving. Instead, it took cues from similar high-end fashion retailers in Bangkok and placed experienced in-store staff at the doors to attend to customers. Assistants are non-pushy but always available to provide patrons with advice, opinions, or information. Because of higher wages, the company couldn’t provide this service level in Spain. 

Lessons learned

These experiences provide businesses looking to enter small markets with plenty of advice and guidance upfront. Learning from what works can help you avoid pitfalls and establish a successful venture. 

Adaptability

Adapting to the local environment is essential. Successful companies aren’t afraid to change what they sell (without losing their essence) to win more customers. For example, the menu at McDonald’s in Taiwan is different from that of Canada. 

Focus on the long-term

Successful companies entering small markets also play the long game. Starbucks spent decades in New Zealand establishing a foothold and beating off the local competition.  

Conduct in-depth market research

Finally, knowing what companies are getting into also helps when going overseas. It’s essential to embrace local cultural sensitivities and conduct proper market research instead of relying on hearsay. 

Conclusion

The competition in small markets can be challenging. However, numerous businesses have made it work. Starbucks wasn’t a household name when it started its expansion efforts, but now it is (partly thanks to those efforts). As such, nothing is stopping you from emulating them in your enterprise.