“This essentially requires three components: the right strategy, the best possible knowledge of the target country and above all knowledge of customer requirements,” says Alberto Silini, Head of Consulting at Switzerland Global Enterprise. What sounds simple can be a real challenge when it comes to implementation because: “There is much competitive pressure in mature markets; niches are often occupied, and consumers are demanding. Growing globalisation and digitisation are exacerbating this situation by bringing new competitors onto the scene. As a result, these markets are basically saturated, and the top dogs may have already established themselves.”
Nevertheless, they remain important and interesting export destinations for Swiss companies and currently account for the largest volume of Swiss exports. In addition, countries such as Germany and the USA are reference markets in which progressive and stable economic environments have developed in recent decades, where demands for quality and innovation are high and Swissness has established itself. These are countries in which Swiss companies can grow, be contenders and increase profits, despite enormous competition. Alberto Silini explains: “One reason for this is certainly the strong purchasing power in mature markets. Another reason is changes in society: think, for example, of an ageing society that wants to rely on good medical support and forms of care.” The new innovations are determined by the factors of sustainability and digitization. Sustainability is playing an increasingly important role in economic processes, and industry 4.0 has turned entire processes upside down, demanding new business models in the process. “These sometimes very rapid changes create constant new export opportunities in a wide variety of industries. And with the experience and skills that Swiss companies can now gain from exporting to mature markets, they are kitting themselves out for the future, as many emerging markets will become increasingly saturated.”
Entering mature markets – three tips
But how can Swiss exporters succeed in entering these saturated markets? Alberto Silini offers the following three pieces of advice:
- The right business model. If you want to gain a foothold in a mature market, you have to consistently align your business model to the benefits for your customers. The focus should be fully tailored to customer requirements. Do delivery times, services, marketing or the pricing model then have to be adapted to country-specific requirements?
- Swiss quality: Swiss-made continues to be a sales argument abroad because it stands for quality. Companies must therefore consistently employ the highest Swiss standards – from the supplier to the after-sales service.
- Thinking digitally: What digital channels are there in the target market and what should one know about them? A precise review of digital trends is indispensable when it comes to exports. Particularly in mature markets, digitisation plays a central role, for example, in the sale of products and services. To give one example: in South Korea TV home shopping is an important sales channel. In other countries such as the USA, Canada or Great Britain, online shopping has become standard and delivery times of just a few hours are the order of the day. At the same time, social media also plays a much more important role in the marketing of products and services than in Switzerland.
Expanding into mature markets – three tips
A mature market’s often long-term economic stability is an important argument for Swiss exporters not only to cultivate it in the short term, but also to prepare for it for the future and expand it. Even if competition is fierce, saturated markets remain profitable. Alberto Silini has some advice with regard to growth:
- Develop a relationship with a business partner: A relationship with a suitable business partner is decisive for success in the target country. Misunderstandings can arise primarily due to cultural differences, which reflect negatively in sales figures. Good business relationships are therefore the foundation of every success and regular discussions, both professional and private, ensure good cooperation.
- Examine whether a branch office is worthwhile: The more customers that can be won in a target market, the more work an SME has to do. It is therefore worth checking whether this can be handled satisfactorily for customers from Switzerland or whether a local branch office is required. Customer satisfaction coupled with reliable Swiss precession and quality remain success factors in mature markets.
- Further develop the business model: As soon as customers have been won, they must be retained for the long term. One way of doing this is through new pricing models or strategies.
Entering and growing in mature markets is time-consuming and costly for Swiss exporters. Business models have to be even more convincing, even more in line with customer expectations and it must be possible to adapt them again and again. Digitisation also requires constant further development at a rapid pace. Nevertheless, developed and saturated markets are indispensable for many Swiss SMEs, due to their strong purchasing power, and often make a significant contribution to a company’s success.