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When Expanding into a Foreign Market, Your Outsider Status Is a Competitive Advantage

Entering a foreign market comes with inherent challenges. Many global companies tend to overcome those challenges by minimizing their foreignness and assimilating into the local environments. However, maintaining and embracing foreignness can yield unforeseen advantages. Whether capitalizing on outsider status to tap into local labor markets, establishing potent associations to build credibility, or forging strategic partnerships to foster mutual international growth, your foreignness can indeed become your competitive edge. By embracing a nuanced approach that acknowledges and leverages foreignness, companies can not only navigate but thrive in unfamiliar territories.

Expanding into international markets presents numerous challenges for companies, particularly due to their “foreignness.” As outsiders, they often grapple with unfamiliarity regarding the local business environment and cultural differences, face credibility issues in attracting customers and suppliers, and have fewer resources compared to local firms. For example, when Uber entered the Japanese market, its disruptive model clashed with local regulations and a culture that prioritizes adherence to rules. Similarly, InMobi, the Indian ad tech firm, once faced hurdles in growing its business in China, where its brand recognition was limited. Even Starbucks, a global coffee brand, found itself overshadowed by local coffee chain Illycaffe in Italy in terms of store presence and resources.

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