Navigating the Spanish Market: Experiences & Pitfalls
Thank you to everyone who joined our first webinar in the series! We had a great session discussing what it is really like to expand your business to the Iberian Peninsula. If you missed it or want to revisit the key takeaways, here is the summary of the practical advice shared by Juho Ahosola (Chief Executive Officer) and Raisa Venermo (Director of Business Operations) from Talenom.
Expanding to Spain: Seven Lessons for Companies Considering International Growth
Spain is attracting interest from an increasing number of Finnish companies. The market is large, the economy is diversified, and growth opportunities can be found across many industries. At the same time, Spain's business environment differs from Finland's, bringing both unique opportunities and challenges.
When discussing internationalization, the focus often lands on market size, the competitive landscape, or acquisitions. In practice, however, success usually depends on much more fundamental elements: strategic intent, people, trust, and a deep understanding of the local operating environment.
Below are some key observations and lessons for companies considering expansion into Spain. These insights are based on practical experience in building businesses within the Spanish market.
1. Everything Begins with Intent
International expansion is neither easy nor fast. It requires investment, commitment, patience, and the ability to look years ahead. Therefore, the first question is not which country to enter, but why expand internationally in the first place.
The owners, board, and management must share a common vision of what the company aims to achieve in the long run. The more clearly this intent is defined, the easier it is to make decisions when challenges inevitably arise along the way.
A good practice is to explicitly document the owners' intent and the goals of internationalization. When everyone is aligned on the direction, even the difficult decisions become easier to make.
2. Choose Your Market Based on Your Strengths
Market selection should be approached with an open mind and rooted in data and analysis. Too often, companies only look at familiar or geographically close options.
Instead, the focus should be on where the company's expertise, business model, and competitive advantages best match the needs of the market.
Spain’s strengths include, for example:
A large and diverse market.
Ongoing digitalization across many sectors.
A fragmented competitive landscape in several industries.
The opportunity to combine organic growth with M&A (mergers and acquisitions).
An openness to international expertise and new business models.
Ultimately, the most important factor is not the size of the market, but whether the company truly possesses the expertise or competitive edge that is in demand.
3. Local Expertise is a Prerequisite for Success
One of the most common mistakes in internationalization is assuming that a successful domestic business model can be copied as-is into a new country. In reality, understanding the local market is critical.
Local talent understands:
Customer expectations.
Business culture.
Legislation and regulatory practices.
The labor market.
The competitive landscape.
Because of this, the role of local management, experts, and key personnel is heavily emphasized—especially in the initial stages.
The best results are achieved when a company combines its own core expertise and business model with local market knowledge. The goal of expanding internationally is not to clone the home country operations abroad, but to collaborate with local experts to build a market-fit version of the business.
4. In Spain, Relationships and Trust Carry Tremendous Weight
One of the most significant observations in Spain is the exceptionally vital role that relationships and trust play in business.
While business worldwide is conducted based on contracts, processes, and numbers, in Spain, personal relationships and trust often heavily influence decision-making.
This is particularly evident in:
Building customer relationships.
Partnerships.
Recruitment.
Acquisitions.
Organizational leadership.
Trust cannot be built remotely, nor can it be rushed. It develops over time through shared experiences, physical presence, and continuous interaction.
For companies, this practically means having a genuine presence in the market. It pays to invest time in local people, clients, and partners.
5. The Right People Matter More Than Strategy
Strategy is important, but execution and success depend on people. When driving international growth, substantial time should be spent ensuring that:
Roles are clear.
Responsibilities are well understood.
Required capabilities are identified.
The right people are placed in the right positions.
Equally important is establishing a shared direction. People commit to change much more strongly when they are actively involved in shaping it.
Often, it is the quality of local leadership that determines how quickly and successfully a business begins to develop in a new market.
6. Be Prepared to Learn and Continuously Adapt
No market analysis or business plan can anticipate everything. During international expansion, you will encounter surprises, mistakes, and situations that could not have been planned for in advance. Successful companies do not try to avoid all problems; instead, they build the capacity to learn from them quickly.
This requires:
Clear reporting structures.
Open dialogue.
Knowledge sharing between countries.
Factoring the local perspective into decision-making.
Internationalization is, above all, a learning process. Challenges are not a sign of failure, but a natural part of growth.
7. Think Long-Term
Spain offers significant opportunities for many industries, but results do not happen overnight. The first few years are often spent on:
Understanding the market.
Building the organization.
Finding key personnel.
Refining business models.
Building trust.
When viewed through a short-term lens, international expansion can seem slow. However, when viewed with a long-term perspective, it can unlock substantial growth opportunities.
Summary
Spain offers exciting opportunities for Finnish companies, but success is not achieved solely through a good product or service.
Based on experience, the most critical success factors are:
Clear strategic intent from owners and management.
Market selection based on core strengths.
Strong local expertise.
Building trust and relationships.
The right people in the right roles.
The ability to learn and adapt.
A long-term commitment.
In the end, internationalization is about people. Strategies, processes, and technology are important, but success is built on the expertise of local talent, a shared direction, and mutual trust.
Writer:
Juho Ahosola
Chief Executive Officer, Talenom