How to deal with international competition?

28 February 2023

Entering foreign markets exposes companies to new competitors. Managing international competition is one of the keys of successful internationalization.  

By Kompass International

28 February 2023

If you are a company which enters a new international market, you will have access to a new customer pool and potential revenue streams. However, you will also have to deal with new or existing competitors. Among them, many may be local competitors with a better knowledge and understanding of the market. Their presence in your target market gives them a significant advantage. . Your main objective is to improve your own efficiency while eroding your competitors’. You will need to put in place a relevant strategy. In this article we will develop 5 different steps to successfully face international competition.

Know your environment

First of all, it is imperative to make a local market study before launching the commercial development. Indeed, it is risky to start prospecting without having a good knowledge and understanding of your market because your competitors already have knowledge and experience. To stand out, knowledge is essential. We need to understand the consumption habits of your target clients, the evolution of their expectations to better interest and retain it.

A part of this market research must be a competitive analysis and you should do this every year. This analysis allows you to evaluate the strengths and weaknesses of your competitors and how you position yourself against them. This consists in identifying your competitors, whether they are direct, secondary or substitute. Gather information to evaluate them following the 4Ps of the marketing mix: Product, Pricing, Place and Promotion. Customer expectations can change dramatically. Find out what matters to your customers. It can be lower price, a premium service or the latest products? It is also at this stage that you can proceed with the analysis of your competition.

This will identify the areas you need to compete in, and give you a platform for differentiating yourself. You can ask yourself : Where other businesses are doing better than you, what can you learn from them? Where the competition is weaker, what should you be doing to make the most of the opportunity? These questions will allow you to determine your competitive advantage.

Find your competitive advantage

What distinguishes you from the competition in your clients’ eyes is what is known as a competitive advantage. Finding your competitive advantage will help guide your international sales and international marketing strategies for years to come. No matter what industry or country you enter, every business has the option to stand out from the crowd. There are three known ways to stand out from the competition and create a competitive advantage:

Low price policy

Price is a major decision-making factor in the buying process. This strategy helps stimulate the demand and gain higher market share. The firm can gain cost advantages by increasing their efficiency, taking advantage of economies of scale, or by getting the raw material at low cost. Walmart, Amazon, ManoMano are well known as cost leadership examples by selling branded items at low cost. They know how to minimize spending, with low operational costs, outsourcing costs and even train vendors to cut costs.

Unique offers

There may be lots of companies out there who do what you do on a basic level. That’s okay! All you have to do is find that one little extra thing that will make you special. As long as none of your competitors offer it, these unique offers can really help your business stand out. Make sure you communicate about your differentiator to your target clients. They need to clearly grasp why you are different and what you do best.

Outstanding customer service

This strategy is one of the hardest to implement abroad because of the level of adaptation to the local clients required. To provide excellent customer service, you first need to understand customers’ needs, experiences, and pain points and you don’t necessarily have that knowledge when you enter this new foreign marketo adapt to the local culture and to be close to the consumers, it is essential to have this adaptation strategy. Apple is doing it really well by being easy to contact in every country, with knowledgeable staff, by offering extended warranties and by updating and improving their products.

Adaption to the foreign market

Adapt your communication

A product’s competitive advantage can only be effective if the buyer is aware of its superiority. Even if a business excels in every manner, it won’t help if no one knows it. In foreign markets, brand messaging is just as crucial as having a fantastic product or service to provide. However, some markets will require audience-specific communication. Because the culture effect could force the organization to adjust and force you to change your messages or communication channels. On average, according to Statista, global internet users spend 2 hours and 27 minutes on social media per day, though trends differ widely by country. In Nigeria and the Philippines this time is 4 hours on average while in average Japanese people spend 1 hour on social networks. CEOs who want to succeed should concentrate on figuring out how to sell their value in regional marketplaces. For instance, Red Bull mixes a global brand message with regionally specific marketing initiatives. They use regional methods of advertising even though their message is universal. Red Bull has done this by globally associating its brand with action sports, music, and the arts while maintaining a local focus by holding events in significant cities all over the world. Such occasions give their messaging a local feel and connect their goods to enjoyable activities that locals like. Businesses might take note of this technique to assist them develop a localized global brand.

Adapt your marketing

To better penetrate a market and face the local competition, having an adapted marketing strategy is essential. Adaptation allows us to respect the specificities of international markets both in terms of : consumer adaptation ; local legal constraints; commercial communication practices and cultural context. Having local managers in charge of the marketing strategy gives the possibility to react to competitors’ attacks and market evolutions.

Some companies change the marketing elements of their branding strategies when entering new markets, giving the same products new names and logos to resonate with local audiences. For example, PepsiCo sells Rays brand potato chips worldwide, but has changed the name in some markets. In Brazil it is marketed as ‘Chipsy’ and in Australia the brand is known as ‘Smiths’. In each country, the colors and overall shape of the logo remain largely the same to maintain overall global brand consistency. But why change the message for each country? Each new iteration of the Lays brand builds on local cultural expectations and marketing needs, effectively communicating with consumers in each market in ways that match cultural expectations. This is just one example of how companies can change their brand message in foreign markets to position themselves more effectively for different target groups.


Part of the ability to survive is to create meaningful, differentiated strategies. In a competitive environment, one way to differentiate yourself is to innovate. You can choose to invest heavily in R&D in order to offer an ever more competitive product or service. This strategy is relevant if the technology of the industry you are in is evolving rapidly. It is also important that your target audience easily and quickly adopts a new technology or a new product. Differentiation is important but should not be implemented at the expense of consumer needs. Keep in mind that you have to meet a need. The cell phone industry is a perfect example of an environment where innovation is at the heart of the industry and where customers expect more and more innovation.

Innovation can also be driven by the desire to go abroad. The ability to access resources outside of firms’ home countries has become an essential source to develop innovation capabilities, and a growing number of firms had this role of internationalization in their innovation performance.

Innovation is not limited to the product itself and being international drives innovation in terms of sourcing strategy, logistics and more globally in supply chain management. Ikea, number 1 in furniture in many countries, has innovated to become a leading brand. Innovation is found at all levels of the company, and in particular in its logistics. Peter Ac, head of Innovations said : “At Ikea, innovation is in our DNA. It can be seen, for example, in our flat-pack packaging, which has been a logistical disruption that has lowered costs while maximizing quality.”

Build customer loyalty

Customer loyalty is a customer’s commitment to your brand. It is the result of customer satisfaction, positive customer experience and value received by the customer from a good of service.

There are many ways to earn consumer loyalty :

Reward Customers: how many bakeries say “Buy 3 baguettes, get the 4th free”. Rewards increase the chances that consumers will come back to you.

Subscription Service: It can be membership subscriptions, Ecommerce subscriptions or digital subscriptions. That can be a very successful means for customer retention since they’re often based on one-time sales becoming recurring sales.

Partner with others companies: Business partners help you improve your business credibility and brand image. Some examples speak for themselves : GoPro & Red Bull, BMW & Louis Vuitton, Uber & Spotify, Nike & Apple.

Ask for feedback: this information provided by customers about their experience with the product or service permits them to know their level of satisfaction and how to improve your business. Sometimes having feedback is being able to predict the next trends.

The relationship with the consumer is an important part of Strabuck’s strategy. It starts when the consumer takes a coffee: by writing the consumer’s name on his cup. They feel considered by the brand and feel unique. It’s a very effective way to create attachment. Starbucks is trying to create an ultra-personalized customer relationship through this strategy to generate engagement and enthusiastic comments in store and especially on social networks. Starbucks has even created a suggestion website called “My Starbucks Idea”, which allows anyone to send in an idea to improve the brand. A way to give voice to consumers and to value them.

Key takeaways

To outrun international competition, companies have several solutions at their disposal. Upstream, it is important to build an international strategy by taking the time to learn about trends and analyze the different markets. These steps help identify the best potential markets and appropriate entry modes to maximize chances of success. If, despite all these efforts, certain risks are still influencing your activity, knowing the market is a first step. Clear positioning, local market adaptation, innovation and customer retention will be next steps for your success in the international competition.

Kompass can accompany you in your international business project, with decades of experience and a far-reaching international physical network. Kompass’s Market Ranking Report can help you evaluate the market potential of 5, 10 or 20 countries simultaneously, and identify new export markets with the highest potential. This comprehensive and personalized Market Ranking Report can minimize risk, saving time and money, as well as identify new business opportunities abroad.


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