Understand Your Rights. Solve Your Legal Problems
Miraziz Khidoyatov, an expert in international deal advisory
In an era of global economic uncertainty, companies are increasingly reluctant to take risks or enter new markets. Drawing on my experience, i developed the COMPASS framework—an analytical tool designed to pre-evaluate transactions by aligning national risk factors with a company’s strategic goals.
International expansion is not a privilege reserved for the few—it is a rational tool for survival and growth, yet is often overlooked by companies. Startups struggling in saturated local markets may find not just proof of concept, but strategic validation in emerging jurisdictions—validation that could shape their trajectory from Seed to Series C. For mature firms facing declining revenues or shrinking margins, international markets are not merely an option—they are a lifeline.
Yet, most expansion decisions are still made blindly, or guided by academic frameworks that fall short when faced with real-world volatility. These models rarely quantify risk, distinguish between noise and opportunity, or ask the most critical question: Does the market align with the company’s strategy?
COMPASS does exactly that. It assesses instability (via GIRA), identifies structural growth potential (via EPI), and measures strategic compatibility (via SIAS). It restores meaning to expansion—not as an intuitive leap into the unknown, but as a calculated move toward sustainable growth.
Modern international business is complex—not just financially, but in its cultural, regulatory, and ideological dimensions. Every country presents its own set of transactional traditions, strengths, weaknesses, and future potential. These must be evaluated in advance to maximize partnership outcomes.
In some jurisdictions, laws governing transnational deals exist only on paper—formal but functionally irrelevant; in others, they often are too general, incomplete, or contradictory—but in all cases, the result is the same: turning every contract into a battle for legal clarity. In others, cultural conservatism dominates, making factors like communication style, hierarchy, or even conversational pauses critical to negotiation outcomes.
Yet other markets offer tremendous economic promise—young populations, abundant resources, rapid digitalization—but are shadowed by institutional risk. These factors rarely appear in isolation. It is their combination—legal uncertainty, cultural complexity, and economic ambiguity—that calls for a systematic method of evaluation before market entry.
Existing models such as the OLI paradigm or the Uppsala Model offer partial insights. But they are too abstract, too static, and fail to provide a quantitative assessment of risk, future potential, or strategic fit. The failed expansion efforts of Walmart in Germany, Target in Canada, and Best Buy in China are a testament to that disconnect—together costing these companies over $6 billion in strategic miscalculations. Each loss reflects a misalignment that wasn’t unforeseen—only unmeasured. Businesses are willing to grow—but they are not willing to gamble. In a world where budgets must be allocated wisely, a unified framework that quantifies risk, forecasts opportunity, and evaluates strategic alignment is long overdue.
Grounded in academic theory and real-world legal experience, the COMPASS framework was created as a structural solution to the chaos companies face when assessing foreign markets. Especially when expansion appears too risky—or isn’t even considered—COMPASS offers a systematic way to evaluate three often-overlooked dimensions: strategic priorities, actual risks, and structural opportunities.
COMPASS is built on three core algorithms:
Each component has a fixed weight in the model: GIRA – 50%, EPI – 20%, and SIAS – 30%. While these weights are fixed to preserve the model’s structural integrity, companies can customize their inputs within SIAS to emphasize risk tolerance, innovation, or access to resources based on their specific strategic focus and priorities.
Too often, businesses focus only on internal metrics: growth rate, revenue, investor interest. But strategy cannot exist in a vacuum. External conditions determine whether a company can sustain results, scale operations, or trigger a new growth cycle. External conditions must be understood not in isolation, but in how they interact structurally to shape real scalability. A country with limited technological development may still offer formidable long-term potential—but if its institutional stability is weak or its structural fundamentals misalign with a company's strategic priorities, even the strongest potential may remain commercially inaccessible. COMPASS integrates these parameters into the equation, restoring reality to strategy—and providing a full-spectrum view not just of the business, but of the environment it hopes to thrive in.
GIRA evaluates instability through a comprehensive lens:
GIRA answers the question: Is the country institutionally, socially, economically, and technologically stable enough to support long-term, scalable business operations without systemic disruption?
EPI identifies countries where growth conditions exist structurally—even if not yet reflected in macroeconomic indicators. Key inputs include:
SIAS is the only component that adapts to the company, not the country. It quantifies the degree to which a foreign market structurally matches the strategic imperatives the company has set for its success—not abstractly, but based on factors it deems essential to thrive.
Some businesses require legal predictability, others rely on infrastructure, and others still depend on cultural compatibility. If a market cannot support a company’s core capabilities or brand positioning, success becomes unlikely—even with high GIRA or EPI scores. SIAS helps managers anticipate these challenges and forecast development more accurately.
No fixed model can fully capture the dynamics of diverse global markets, where institutional, cultural, and operational contexts vary across regions and industries. COMPASS does not claim to be universal. Instead, it offers a flexible architecture that adapts to each company’s strategic logic.
For example, resource-based industries are highly exposed to political shocks and expropriation risks. Their survival depends on institutional strength and rule of law—making GIRA paramount. In contrast, technology sectors face different vulnerabilities. Startups rely on innovation ecosystems and digital infrastructure (EPI), but also need local regulatory and cultural conditions (SIAS) to support their operational model.
COMPASS does not force a false choice between growth and compatibility. It delivers a granular view of the factors critical to international expansion, maps their interactions, and identifies structural points of failure. Strategic stress testing then assesses whether the market can preserve reliability, operational stability, and future growth potential under pressure.
Through years of advising on complex international transactions, I’ve observed several critical factors often overlooked in the implementation stage. Many deals fail not because of poor market selection, but because execution does not scale with ambition.
This is where the concept of “glocalization” comes in: maintaining a global identity while adapting to local realities—without compromising the strategic core.
International expansion is no longer a question of preference—it’s a strategic imperative shaped by global competition and economic logic. In an age of turbulence, COMPASS provides the clarity and precision businesses need—not just to enter new markets, but to stay and succeed in them.
By translating complexity into structure, and volatility into measurable factors, COMPASS offers what should have always been obvious: sustainable success isn’t a matter of chance, it’s a matter of informed, deliberate action. Companies that understand this aren’t simply betting on growth—they’re building the conditions that make it inevitable.
