Did you know Pepsi is a strong competitor in the snack food market? Or the Virgin Group makes everything from spaceships to cosmetics? These, and many other successful brands have grown revenue streams by entering new markets — whether through mergers and acquisitions or organic growth from the ground up.

As you enter a new market, immerse yourself in understanding the customer needs:  how can you better serve customers with a new product or service? Where are the gaps and how can you fill them in? Answering these basic questions involves research, time and financial investment.  To jumpstart your thinking as you evaluate new market entry, we’ve developed a list of the top five reasons to enter a new market:

Expand geography
McDonald’s serves an estimated 47 million people daily. While a majority share is derived from the US, McDonalds also operates in 128 out of a total 140 countries. The McDonald’s franchise exemplifies the benefits of entering new markets. The world’s largest fast food chain revenues grew 27% between 2004 and 2007 — totaling $22.8 billion, with a 9%, or $3.9 billion, increase in operating income. The McDonald’s geographic growth strategy focuses on the core product (e.g. fast food) while adopting the local culinary culture (e.g. McDonald’s France sells wine).

Diversify product offering
Sir Richard Branson’s Virgin Group empire has a very unique and diverse product offering. By translating the core values of the Virgin brand into a range of products, Branson has successfully launch everything from spaceships to games to housewares. A diverse portfolio can also help you spread and reduce risk. For instance if Virgin only invested in music, the company might be on the brink of failure. However, by investing in a range of products and services, Virgin’s leadership has developed a sustainable, durable company.

Appeal to different customer segments

Gap, Inc. is the largest specialty retailer in the world. By appealing to multiple consumer segments, the brand has ensured a leadership position. Beyond appealing to the middle class, Gap has captured specific customer segments, such as baby, children, women and maternity. Within the Gap brand, there is GapKids, babyGap, GapBody and GapMaternity. The retailer has also focused on multiple life and wealth stages. Gap Inc. has successfully launched Banana Republic for the more affluent and more professional; Old Navy for young, middle America; and Athleta, for athletic, upper-middle class women.

Achieve long-term vision
Google’s long-term vision is easy to remember: organize the world’s information. It is quite the task, however. Google has acquired over 50 companies — since its inception just a decade ago — in its attempt of realizing its ambitious vision. Google went from a single search engine to a communications conglomerate — with mobile devices to maps and books to web browsers and OS. The search giant has entered countless markets in an ambitious attempt to organize information.

Build new skills and competences
Did you know Pepsi is a strong competitor in the snack foods market? PepsiCo owns Frito Lay, Tropicana and Quaker among its many soft drink brands (such as Gatorade, Sierra Mist and Mountain Dew). PepsiCo.’s decision to enter the snack food market makes sense. The soft drink giant established distribution channels in grocery stores and gas stations around the world. Therefore, moving from the cooler to the stock shelf was a leap worth making.

To read more about entering new markets, go to Sparxoo, a digital marketing and branding blog.