Analyze local laws and regulations

[rochon.a1.119]

Secondly, the economic situation played a crucial role in slowing Starbucks' expansion in Australia. As a result of the global recession in 2008, the company was forced to close two-thirds of its stores in the country, as the purchasing power of potential customers in the new market had been affected.

Starbucks had enough financial resources to stay afloat, but not all brands can survive in such a situation.

2.

Even big brands can run into trouble when it comes to local laws.

For example, when Uber tried to expand into South Korea, many assumed they would succeed. After all, the company had well-established markets in many nations around the world. However, Uber failed to understand its target market, and this had serious consequences.

The taxi industry in Seoul is tough due to too many taxis and a slowing population growth rate. Seoul alone has over 70,000 taxi drivers (compared to 13,000 in New York City). The government has begun to reduce the number of taxis and offices no longer issue licenses. As a result, the price of taxi licenses has increased significantly.

If Uber were to start operating in the market , the taxi industry would bahrain mobile database have experienced a considerable downturn. The government feared a backlash from industry representatives and Uber's development in South Korea was hampered as a result of these regulatory issues.

Conclusion? Without adequate information, any market expansion plan is reckless.

3. Understand local politics

To get a handle on the business climate of a location, you also need a good understanding of local politics. Some markets may not be as attractive due to an unfriendly political climate or general instability.