Insprie

Situation 06

International expansion isn't working.

The market was entered, the costs arrived, and the volume did not.

The situation

A new market was entered with real intent. Listings were secured or a distributor was appointed, and the numbers have not followed. Landed cost is higher than modelled, marketing investment is being absorbed with little return, and the home market is now subsidising the expansion.

The decision facing the board is whether to fix it, refocus it, or stop.

What usually goes wrong

  • The market was chosen because of an inbound opportunity rather than a considered assessment.
  • Pricing was set without fully landed cost, retailer margin and trade spend.
  • A distributor was appointed without agreed investment, targets or accountability.
  • There is no one accountable in the market with authority to act.
  • Losses continue because stopping feels like an admission of failure.

What needs to be established first

  • What is the true contribution of the market after all trade and marketing costs?
  • Is the proposition competitive in that market, at that price, on that shelf?
  • Is the constraint distribution, rate of sale, price, or awareness?
  • What would it genuinely take to reach viable scale, and over what period?
  • What is the cost of continuing versus the cost of an orderly exit?

The next 30 to 100 days

  • Rebuild the market economics from landed cost through to shelf.
  • Assess distributor or retailer performance against what was actually agreed.
  • Reset the plan around the channels and accounts that can work.
  • Put accountable leadership in market, on an interim basis if required.
  • Give the board a clear recommendation to invest, refocus or withdraw.

Capabilities involved

Related intelligence

Other situations

Certain details have been withheld or generalised to protect client confidentiality.

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