Enter a new market

CONSULTING METHODOLOGIES

One of the main growth opportunities for a company is to expand to new markets with its proven products and services. Its competitive advantage in the new market will come from its existing products and service offer. Entering a new market is like making an amphibious invasion (D-Day). Just like D-Day, successful market entry requires good intelligence, highly focused resources and a major planning effort.

I Executive Summary

[Summarise your market entry recommendation and your key rationale for it]

  • Description of the opportunity
  • Why we will win in this new market
  • What the financial returns will be

II Why enter this market?

Why is this market better than other markets? [Tool: Market Attractiveness/Competitive Position matrix)

    • Why is this market attractive? (Size/Growth/Profitability)
      • What is the background to this market? (Macroeconomics etc )
    • Why do we think we can enter and win? (Competitive Position)
      • Who are the incumbent competition?
      • What is our competitive advantage in this market?

III How can we get a foothold in a targeted segment/customer?

(How do we knock over the first pin in the bowling alley?)

  • Which customer/product segment will we establish our foothold in?
    • Why is this segment attractive?
      • Size and Growth
      • Which segments/customers are the most profitable?
        • Negotiating power
        • Value-added premiums desired
        • Price sensitivity
        • Cost to access/serve
      • Will winning this segment/customer give us the platform to expand to other segments/customers?
    • Why do we have the strongest differentiated value proposition for this segment?
      • What does each segment want?
        • Current segment needs (importance of each benefit)
        • How are needs changing in future?
      • What will be our differentiated value proposition?
        • How do we perform on each benefit?
          • How will we have to adapt our products and services for this market?
            • How can we localise them without losing our global advantages?
        • How competition performs on each benefit
  • How are we going to reach these customers? (Route-to-market)
    • What is our offer to channel partners?
    • How are we going to build awareness?
  • How will competitors respond? What tactics can we use to win?

IV What is our implementation plan?

  • What organization will we need to build?
    • Who will lead this market entry?
    • What key resources, skills, relationships and know-how will we need in this market?
      • How is this market’s business culture different from what we are familiar with?
    • What resources, skills, relationships and know-how do we lack?
    • How are we going to resolve our resources, skills, relationships and know-how gaps?
      • Can we enter organically, or do we need acquisition, JV, alliance?
      • Are we building a scaleable organisation, or the cheapest possible organisation?
      • What support is needed from HQ/Other business units?
  • What is the timing of our key milestones?
    • What are our key launch milestones?
      • Establishing a legal structure, office rental?
      • Hiring key employees?
      • Getting our product/service in place?
      • Planning launch communications?
    • Once we have a beachhead, what will be our expansion path? Customer, product and channel expansion? Sequence in the bowling alley?

V What are the expected returns?

  • What leading metrics can we use to track market entry progress?
  • What is the expected P&L over the next 5 years?
    • What is the cost structure?
    • What are the key assumptions?
  • What are the main risks?
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