The Importance of Market Research Before a Business Expands
Posted 26 Aug, 2020
Author - Priscilla Aimila
The Importance of Market Research Before a Business Expands

The goal of all businesses is to grow and expand operations, a task which is often easier said than done. To achieve growth, a business must have a great model as well as generating a healthy profit, which allows it to further market its product/service and acquire more customers in the future.
Those which are exceptionally successful in their efforts may have the opportunity to expand beyond the confines and set up base in other locations or states. Here are some of the reasons market research is incredibly important before a business starts expanding:

Whilst a business may have a completely unique, effective business model in their initial location, there may be many more competitors in the new locations, who are likely to be more established in such places than the business looking to expand. These competitors could pose a significant threat to the business’s chances of success when operating in a new location.
Market research allows a business to gauge the number and power of their potential competitors, and make a more informed decision about how/when/where to expand. They could, for instance, begin their expansion in a different area of any given place if one area is saturated which businesses of the same type. 

Customer Base
Without doing market research, there is no way for a business/company to know what its chances of success are in relation to its potential customer base. For it to succeed in the long run, there will need to be a market for its product/service. If there is no market, then it may be up to the company to create one, or expand to a different location with a more established market. 

Having a loyal customer base is essential in helping businesses which expand stay afloat (expansion is, after all, a very expensive process), so market research can give them a good overall impression of how popular they may be before they spend money in expanding.

It is worth noting that shareholders of any given company will also want to be reassured about overseas expansion, given the risks it poses. Market research also provides investors with hard evidence that expansion will be both successful and rewarding overall.

Clearly, expanding without conducting market research massively contributes to the risk levels associated with expansion. As such, market research is essential for any business considering setting up in another location.

Source: Startupgrind
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