Looking for New Global Markets? Bigger Isn’t Always Better market availability (MA).
ailability (MA). The company currently performs best in the
by Nataly Kelly November 09, 2020, Harvard Business Review
There is no one-size-fits-all solution when it comes to international
growth. The nuances of your business and the industry you’re in, as
well as your company’s strategic direction, will help to shape your
expansion into new markets.
When I joined HubSpot in 2015, we already had customers in more
than 100 countries all around the world. Nevertheless, our
international expansion plans were far from complete. To determine
which countries would require longer-term investments, and which
had the potential to offer us faster nearterm growth, we developed a
three-part framework that can help any company to develop a more
targeted expansion strategy: MARACA Framework for Evaluating
Market Opportunities
MARACA model, consists of three metrics that companies should
consider when evaluating a potential market:
 Market Availability (MA): The size of the market relative to
other markets — the number of potential customers and
the estimated revenue potential.
 Real-Time Analytics (RA): How your company is currently
performing in a given market, relative to your top markets.
(If you already have some traction, increasing your
investments there may make sense.)
 Customer Addressability (CA): How difficult it will be to
address the specific needs of this market. Understanding
the fit between your current offerings and a potential new
market will give you a sense of how much investment it
would take to achieve product-market fit in different
locations.
To implement this framework, we assigned each potential market a
score for each of the three components, on a scale of one to ten.
Think of it like Olympic scoring: a 10-10-10 score would mean a
perfect market, but, as in Olympic games, a perfect score is
exceedingly rare. So what does this look like in practice? Consider a
fictional U.S.- based B2B company that’s developing an international
expansion strategy. To start, they would evaluate their home market
as a baseline. It’s likely that the U.S. would be one of their largest
possible markets due to the sheer number of businesses across the
country that could be potential customers, so it gets a 10 out of 10 for
U.S., so it would also score a 10 out of 10 for real-time analytics
(RA). And the business is optimized for American customers — they
sell in USD, address customers in American English, and have good
evidence that they truly understand their local customer’s needs —
so they would achieve a 10 out of 10 in customer addressability (CA)
as well. Overall, the U.S. market would get a perfect score of 10-10-
10, meaning that it has opportunity, traction, and good product-
market fit.
Next, the company would consider various potential markets to target
for expansion. Let’s say that two of their top contenders are Finland
and Sweden. How would the MARACA framework be applied to
compare the two opportunities? Finland and Sweden are fairly similar
markets as far as size goes. If our fictional company wants to sell to
small- and medium-sized businesses, both countries would score
similarly in terms of market availability (MA), because they both have
a similar number of target companies (especially when compared to
much larger European economies, such as France or Germany).
Next, as a U.S.-based company with limited global traction, both
markets would receive similarly low real-time analytics (RA) scores,
so that metric would also be unlikely to provide much guidance.
Finally, as far as customer addressability (CA), the two markets
might again seem similar. Both countries have strong economies,
high ease of doing business, and similar levels of English proficiency.
However, Finland would get a higher CA score for one simple
reason: the company already accepts their currency (the Euro), while
it is not set up to accept the Swedish Krona. Although many Swedish
businesses pay bills in other currencies, this limitation would likely
impact the company’s ability to sell into the market quickly and easily.
Another factor that can affect a market’s CA score is the country’s
level of technology adoption. Finland, which is ranked by the
European Commission as the most digitally advanced nation in
Europe, is often targeted by tech companies for this reason. Its
strong culture of early technology adoption — stemming from a high
cost of living, small population, and lack of local competitors —
makes it easier to penetrate for many of these companies. These
types of factors can be subtle and difficult to quantify, but they are
extremely important to consider.
The results of this analysis will drive the direction of your growth.
The main value of the MARACA model is that it forces you to look
closely at how you would perform in each market, one at a time, at
the micro level. Instead of thinking in generalities across entire
regions or group of countries, it helps you to understand your
company’s weaknesses and opportunities in each local market.
Ultimately, this analysis gives you what you need to better control
your international growth; you can reduce investment in low potential
markets and focus on investing in countries that are likely to offer
faster traction. In addition to helping you choose the best markets for
expansion, this framework can provide a direction for product
development efforts. While MA is relatively static for a given market,
you have significant control over CA, which can in turn boost your
RA. If the MARACA model identifies a poor product fit in an
otherwise strong market, you can change your product positioning,
pricing, or packaging — or even create an entirely new product. This
might involve localizing your offerings, opening an in-country office,
or acquiring local partners. Of course, the lower your CA score for a
given market, the more work you’ll need to do — so it’s important to
consider whether the MA and RA scores are high enough to justify
the cost. In some cases, it may be possible to achieve the same or
even higher revenue with a fraction of the investment by simply
focusing on the low-hanging fruit available in markets that are
smaller, but easier to penetrate.