Over the years, Canadian companies across a range of sectors have seen success selling and operating in the UK market. CGI Group provides various IT solutions, consulting services, and outsourcing to numerous UK businesses and government organizations; clothing brands Lululemon and Canada Goose have seen success with UK consumers in athleisure and winter wear respectively; Terramera sells plant-based alternatives to chemical pesticides into the UK agri-business sector; and Shopify and Wattpad play in the UK tech sector; while Northland Power and Hydrostor contribute to the UK’s transition to a greener economy.
The UK market is an attractive one for Canadian companies looking to expand their operations. It offers access to a large and thriving economy, and has several advantages over other locations:
Strong cultural ties & consumer familiarity – British consumers tend to have a positive perception of Canadian products & services
Shared language and similar legal framework – no need for translation or steep learning curve of entering a market with a very different legal system
CPTPP – in July 2023, the UK formally agreed to join the Comprehensive & Progressive Agreement for Trans-Pacific Partnership, and the Government has expressed commitments to deepen global trade agreements post-Brexit, potentially making it even easier to do business in the UK over the coming years
Any market entry requires a clearly defined strategy to maximise the chance of success. At White Space Strategy we have supported many companies over the years with market entry, leaning on bespoke research and commercial thinking. Based on our experience, the 4 key factors that need to be considered in any market entry strategy (whether B2C or B2B) are clear goals, strong market understanding, the right mode of entry and clear proposition & pricing
Below, we’ve detailed the elements that need to be considered under each part of a market entry strategy, to help you come up with a rock solid plan to crack the UK market:
Clear goals: Successful market entry strategies are founded on clearly defined outcomes. If you’re considering entering a new market, you must set out what you are attempting to achieve, the steps needed to achieve it, and what success looks like for each of those steps. Key elements here include the following:
- The business rationale for the market entry
- The specific product or service you will be taking to market
- What is the target market or markets
- Your unique value proposition in the target market
- The steps you will be taking and a timetable for actioning them
- The budget allocated to each step
- Targeted level of sales with realistic projections across a reasonable timeframe
Excellent market research: False assumptions are easy to make. It would be reasonable to assume (but possibly wrong!) that if a product has been successful in market X, the same success can be achieved in market Y with few deviations from the original plan.
Research and analysis prevent you from tripping up on assumptions and biases. Things to include in a market research programme include:
- An evaluation of market size
- Growth projections for your customer base, with a realistic market share
- Customer trends, needs and preferences that you are solving for
- The competitive environment – and how you can stand out
- Examination of the pricing landscape to inform pricing decisions
- Identification of potential barriers to growth
A strong mode of entry: There is no universal right or wrong method of new market entry. Your choice will be dictated by a range of internal and external factors including: product type, regulatory landscape, budget and attitude to risk. Selecting the right approach for your company is critical to avoid overreach or any mismatch between expectation and reality.
The main modes of entry are as follows:
- Exporting: fast market entry with relatively low risk, but with potentially very low control over the actions of distributors
- Franchising: Again, fast entry and low risk, but the legal and regulatory framework must be robust if you are to exercise appropriate controls over licensees
- Strategic alliance: can be useful for gaining trust with a new customer base. However, sharing a partner’s expertise and brand value will inevitably come at a financial cost
- Acquisition: good for fast entry but comes at a high cost
Clear proposition and pricing: Strong budget management will make or break the ROI on new market entries. That’s why you need to consider it in your strategy. Proposition and pricing are affected by several factors, including:
- Budget. Expense budget by month or year as well as financial targets
- Mode of entry plan. Your preferred mode of entry will have costs and risks associated with it
- Timeline. Time and cost are naturally linked. If you want things done faster it will cost more, so establishing a clear timeline for deliverables will help you foresee any potential budget pinch points
These elements then need to be pulled together into a clear strategy document outlining why you want to enter this market, how you are going to do it, and what your expectations are around timescales, costs and revenue.
At White Space Strategy, we can help Canadian companies enter the UK market. Our market analysis, competitor insight and go-to-market strategy capabilities drive solid market entry strategies.
If you would like to explore entering the UK with your product or service, get in touch with us to see how we can support you