The Importance of Market Research Before Expanding Internationally

The goal of all businesses is to grow and expand operations, a task which is often easier said than done. To achieve growth, a business must have a great model as well as generating a healthy profit, which allows it to further market its product/service and acquire more customers in the future.

Those which are exceptionally successful in their efforts may have the opportunity to expand beyond the confines of their national borders and set up shop internationally. Here are some of the reasons market research is incredibly important in this scenario.


Whilst a business may have a completely unique, effective business model in their home country, there may be many more competitors overseas, who are likely to be more established in their own country than the business looking to expand. These competitors could pose a significant threat to the business’s chances of success when operating overseas.

Market research allows a business to gauge the number and power of their potential competitors, and make a more informed decision about how/when/where to expand. They could, for instance, begin their expansion in a different area of any given country if one area is saturated which businesses of the same type. 

Customer Base

Without doing market research, there is no way for a business/company to know what its chances of success are in relation to its potential overseas customer base. For it to succeed in the long run, there will need to be a market for its product/service. If there is no market, then it may be up to the company to create one, or expand to a different country with a more established market. 

Having a loyal customer base is essential in helping businesses which expand stay afloat (expansion is, after all, a very expensive process), so market research can give them a good overall impression of how popular they may be before they spend money in expanding.


It is worth noting that shareholders of any given company will also want to be reassured about overseas expansion, given the risks it poses. Much like CFD trading, there has to be a good reason for investing in expansion, as well as a good chance of making a profit.

Market research also provides investors with hard evidence that expansion will be both successful and rewarding overall.

Clearly, expanding overseas without conducting market research massively contributes to the risk levels associated with expansion. As such, market research is essential for any business considering setting up in another country.