New Interactive Market Diversification Tool Identifies Top Potential Markets for U.S. Businesses

November 15, 2018
Jean Janicke is Director of ITA’s Office of Trade Negotiations & Analysis

U.S. companies produce some of the most innovative and high-quality products in the world. But how does a company figure out where in the world to go next to sell its product? What if the market conditions change for your current exports and you need to find a new market? The Market Diversification Tool is here to help answer that question.

In the past, a manufacturer might have relied on one data point or market research indicator to figure out its next step, but was unlikely to be able to go to one place to mine multiple data sources. It could get overwhelming. Now with the Market Diversification Tool, there is one place to start the market research journey that brings together product-specific and market-level data points across 11 indicators to give you a ranked list of choices. We field-tested the tool with our Commerce colleagues all over the country to make sure the results match what they would expect from experience and to ensure that the tool is easy to use.

Here’s how it works. A U.S. producer exporting to at least one market answers two simple questions: what is your product, and where are you exporting now? A team in Commerce’s Industry and Analysis Unit has figured out an algorithm and collected all the data needed to help you find your next potential market. The tool applies weights to 11 different indicators, runs calculations based on your input, and gives you a ranked list of recommended markets with scores for each country.

And it is not a black box. The results display all the data the algorithm uses so you can better interpret them. The data can also be exported. Want to only look at markets in Europe and get help locally once your search is done? The tool allows you to narrow your search to select regions or markets and provides information on your local U.S. Commercial Service Export Assistance Center as well as links to other resources such as Country Commercial Guides.

Example: Producer ready to find its next market

Since there are many small and medium sized cosmetics producers in the United States, let’s take the example of a lipstick producer that currently exports to Mexico. Here are the results:

The search results show high scores for Canada and the U.K. with a bunch of markets ranked in the 40s.

Example of Market Diversification Tool results — In these results we can see that Singapore, with average imports from the United States of $9,283,075, ranked higher than Germany and South Korea, both with higher U.S. export figures. The results illustrate that the tool does more than just a straight ranking by trade or a listing of FTA partners; it combines multiple factors by weight to generate top export destinations.

Example: Search When Market Conditions Change

Now let’s take an example of changing market conditions. A U.S. motorboat producer exports to Belgium, but now the producer faces foreign retaliation in Europe, Canada, and Mexico.

Second Example of Market Diversification Tool results — The search brings up Canada and Mexico and some EU markets, but it also shows opportunities for diversification beyond markets that are retaliating against motorboats. From this search, a company responding to market changes could start exploring Asia-Pacific options like Australia and Singapore, for example, or consider prospects in Israel.

Example: Regional focus

There are more ways to customize the tool results. Let’s say a company has limited international travel funds and is visiting a current customer overseas. The company could use the tool to find the top potential markets in the region. Or if a company is participating in a big regional trade mission like Tradewinds, it could use the tool with a regional selection to focus its travel and meeting choices. This customization option helps companies make the most of limited resources.

Next steps:

Need help with next steps? By entering your zip code, you’ll get connected to a Commerce trade office in your area. For example, the motorboat producer could use the results to explore market research and other programs for Hong Kong and Singapore with a local U.S. Export Assistance Center.

Armed with the ranked list, you are ready to start more in-depth research and find partners in new markets.

Try out our new tool today!

Disclaimer: Consistent with its mission, the International Trade Administration (ITA) provides the information on this website for informational purposes, to assist U.S. exporters seeking to identify potential new export markets. The market rankings provided by the tool do not have official or legal status and should not be taken as a business recommendation or as business counseling. The information in this tool does not constitute legal advice. ITA has taken every effort to ensure that the information presented is accurate and that the algorithm provides useful results; however, ITA assumes no responsibility or liability for any errors or omissions. ITA advises users to independently verify any information contained in this tool prior to relying on it. Users are further advised to conduct their own due diligence and seek the advice of legal counsel before entering into business ventures or other commercial arrangements in these markets. ITA assumes no responsibility or liability for the actions users may take based on the information provided.