What Is The Global Growth Opportunity Matrix? And Why It’s The Key To Unlocking International Market Prioritization

Welcome everyone! In this edition of the Global Class’ Growth Strategies newsletter, we will cover strategies for building trust within an organization, hiring successful local teams, and improving team dynamics that lead to successful scale.

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So you’ve decided to go global. The next question you might be asking is, “Where do you go?”

?? Warning: Most companies approach answering this question wrong.

They tend to focus on the size of the market opportunity, instead of looking holistically at what it really means to expand into the market.

Most executives are not aware of the significant burden an expansion has on the organization and thus stumble into organizational roadblocks which lead to unforeseen consequences and slowing growth. The solution is often either to double down on the “Company Way” of doing things, falling for a delusional line of thinking that the model that worked in the initial market will work in other markets.

Conversely, the other considered solution is to double down on speed to market, leading to more drastic localization that if not built with the right structures and processes in place will lead to disparate models in each country that are impossible to manage across a diverse global footprint, stunting international growth.?

The 4 aspects companies should consider when evaluating any new market

In addition to market size/opportunity, there are other key ingredients companies should consider when evaluating any new market. Knowing those components is a foundational step in any successful expansion strategy, so let’s highlight them here. The 4 main aspects of market selection include:

1. Market Size/Opportunity - This is the easy one, a natural and intuitive analysis that most professionals are familiar with.

2. Degree of Localization Required - This adds to the layer of complexity and how much the go-to-market and operational models must change to find traction in the new market. While the market size shows the scale of the opportunity, the degree of localization shows how much work you have to put in to capture even some of the market opportunity.

3. Organizational Readiness - The most often overlooked aspect of market selection. Companies must have alignment and buy-in around expansion initiatives and must have the internal expertise to know how to navigate local markets.

4. Scalability of Localizations - This aspect considers whether the localizations can be scaled or used in other markets. The question to ask yourself is, “Is making this change for one market help meet a need for localization in other markets as well?”

The Global Growth Opportunity Matrix

To tackle these 4 aspects and encourage organizations to think of market selection in a holistic way, the authors of Global Class Aaron McDaniel and Klaus B?rme Wehage ???? created the Global Growth Opportunity Matrix.

The Global Growth Opportunity Matrix is a visualization tool that helps company leadership understand the level of burden (or localization premiums as described in their book) which directly correlates to the preparedness of the organization (or the Global Readiness Score).?

By applying the tool, executives can now easily visualize and prioritize their expansion efforts based on organizational readiness and market analysis done through localization discovery efforts.

Simply put, the more you have prepared your organization for international growth (y-axis), the bigger the complexity (localization premium) you can take on (x-axis) with a higher likelihood of success. The matrix also assists you in mapping out an expansion path to multiple markets, helping companies.

To learn more about how the Global Growth Opportunity Matrix works, read the full blog here. And remember to sign up for the newsletter here!

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