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

Instead, we advise companies to focus on Market Accessibility. While this encapsulates market size, it also considers your company’s ability to actually capture the market opportunity in that 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 Capability - 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 this:

“Is making this change for one market help meet a need for localization in other markets as well?”

While the incorrect way to select markets leads a company to choose the next market to launch in before collecting all the relevant information needed to make an educated decision, considering Market Accessibility and these 4 elements first allows executive teams to select the best markets that provide a higher likelihood of success.

Besides these 4 elements, Global Class Companies that truly consider Market Accessibility, also think not just about the next right market to enter, but think about the right path to global growth. Global Class Company executives select markets that help the organization strengthen its global growth muscles; choosing markets that the organization is capable of succeeding in while considering the scalability of localizations which can be used to more easily enter subsequent markets in the future on a pathway toward global scale.

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 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 capability of the organization (or the Global Capability Score).

By applying the tool, executives can now easily visualize and prioritize their expansion efforts based on organizational capability 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.

How Does The Global Growth Opportunity Matrix Work?

The Global Growth Opportunity Matrix is built on the logic that organizational capability dictates a company’s ability to take on the challenge of localization for international markets and reaching global scale.

As an analogy, imagine a growth pathway. The G-GO Matrix helps visualize the sequence of markets to enter, showing “Linked Markets” where localizations from one country can be implemented in multiple places to gain traction. Reaching global scale isn’t just about finding the next market to go into, but planning the right sequence of markets to enter in what order to reach global scale faster.

In addition, the use of the zonal map is not about inputting biased numbers to convince the leadership to buy into your specific international goals or prioritize specific markets. Instead, it’s a framework to help avoid personal bias by leaders and ensure that the right due diligence has been conducted both internally (Global Capability Score) as well as externally (through Localization Discovery).

It is built off a more holistic and comprehensive view of the localizations required to succeed in a new market and helps companies avoid personal and functional bias which, unfortunately, affects global growth strategy.

The Global Growth Opportunity Matrix includes the following steps:

Assess organizational capability based on three key factors: Mindset, Methodology and Momentum, or have the Global Class team conduct a more in-depth global capability assessment that involves outlining key risks and opportunities across 10 key areas

Conduct localization discovery in target markets and speak to key stakeholders (customers, regulators, channel partners, etc) to identify business model changes
Input required localizations from your localization discovery into the Localization Premium Analysis tool to visualize the required go-to-market and operational changes required to succeed in a new market
Input the Global Capability Score and Localization Premium Score into the Global Growth Opportunity Matrix
Input your assessment of the market opportunity for each of the target markets (circle size as depicted in the framework)
Evaluate markets based on where they land in the three zones in the Global Growth Opportunity, visualizing which units to focus on in what order (see explanations below)

Opportunity Zones Explained

Capability Zone 🟩 - markets that are immediately available (manageable level of localization required) and within the organization’s current level of capability to support the changes needed to find traction in the market
Caution Zone 🟨 - markets that may seem accessible but require localizations and a level of global capability just beyond the organization’s current capabilities
High-Risk Zone 🟥 - markets that are highly uncertain (extreme localization required) with a greater need for organizational support that is more likely beyond the scope of what the organization is set up to handle

By properly assessing your organizational capability, your team will have a much clearer understanding of organizational blindspots that can be worked on over time to increase market accessibility for your company (i.e. increasing the capability zone as shown in the image below).

Then the next step is to work on organizational capability gaps to increase organizational capability, thereby increasing the Capability Zone 🟩, allowing the company to access more markets with less risk of failure. This is what the Global Class team does, they help companies expand their organizational capability, providing targeted recommendations to overcome challenges and avoid pitfalls on the horizon. The goal for any company is to scale as fast as possible and this won’t be possible without building a foundation for global growth.

A Dynamic Tool for Growth Leaders

Global Class’ “Global Growth Opportunity Matrix” is an interactive assessment tool that allows leaders to reflect on strategic growth opportunities and organizational development needs, and communicate the right markets to prioritize. The Global Growth Opportunity Matrix can change over time as the company evolves and expands the internal capabilities required to support global scaling.

An additional benefit of using the Global Growth Matrix is that you’re building the foundation for expanding to not just one market but globally. This tool helps your scalability in “Linked Markets” where localizations you apply from one country can be implemented in several others.

Leaders MUST NOT forget to continuously assess organizational capabilities as the ability to take advantage of opportunities abroad often fall at the mercy of the company’s ability to respond/support local teams in international markets. It’s pivotal for companies to build structures that create speed (without hindering growth) with resources that can enable fast localizations and maintain dynamic playbooks that can help the organization leverage past learnings and avoid making repeated mistakes when scaling into new markets.

About Global Class

The Global Class team has developed THE playbook that teaches organizations the right mindset, culture, and strategies to successfully build global businesses. Through strategy tools and frameworks (+ case studies built from conversations with over 400 executives from the world’s fastest-growing companies), our team illuminates what the new class of successful global businesses (“Global Class Companies”) do to succeed, who are part of their high-performing teams, and how they do it. From market entry to global growth, we help companies build the foundation for successful global growth through leadership advisory services, strategy workshops, and more. Contact us for support by visiting the Get Help Scaling page.

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