Year after year, we hear about ambitious market entries going kaput. Take for example Target’s Canadian expansion, which came to a grinding halt within two years of entering the country. Why is it that so many organizations fail to succeed in new markets? While the idea of entering a new market might seem viable on paper, few actually come to fruition. To be successful, you need to plan each step based on a thorough understanding of the market dynamics and the competitive and regulatory environment. Based on our experience of helping clients enter new markets, we’ve outlined how these insights can be used in each step of planning a market entry or expansion strategy.
1. Understand the size of the market and its growth potential
It’s impossible to succeed in a new market without understanding your market first. You’ll need to assess the dynamics of the market and estimate its potential for growth. Start by researching your ideal customer base, market drivers, and trends in the industry to estimate the size of the demand and supply. It is at this stage that you’ll need to consider what your competitors are offering to be able to offer a unique value proposition.
2. Analyze previous market entries by companies similar to yours
Determining the right entry model enables you to find the right audience and also set the right price. This can be done by assessing competitors’ and previous entries by other players in the target market. It is also essential to evaluate the advantages and disadvantages of various entry modes to select the most suitable mode for you to enter the market.
3. Identify the right business partners
Once you’ve pinned down on the mode of entry, it’s time to evaluate the right partners, such as distributors, sellers, marketing agency, and so on. Ensure that they have the right industry-focus and capabilities required to sell in your target market. Analyze their company financials, value proposition, and service offerings to able to establish long-standing relationships.
4. Determine which product to launch first
Customers often remember brands by their first product. So it’s important that you choose one that immediately resonates with your target audience and showcases your unique value proposition. Identify your launch product based on factors such as the market need, level of competition, the uniqueness of the product, and price attractiveness.
Download our case study to find out how a baby care products manufacturer based in Turkey planned a comprehensive market entry strategy using Netscribes’ outside-in approach.