Brands get their market entry strategy wrong all the time. Uber massively overestimated the demand for a cheap taxi alternative in Seoul. After launching in Myanmar, Facebook was blindsided when its platform quickly became a propaganda tool. Walmart didn’t understand supplier power in Japan. We could go on…
No brand is immune to blunders and setbacks when moving into a new market. To tip the prospects of success in your favour, you need a disciplined market entry strategy, backed by thorough research
What is a Market Entry Strategy?
A market entry strategy is a structured framework for successfully delivering goods or services into a new market. This could be a domestic or international market, but fundamentally, the key elements of the strategy include:
- Clear goals
- Excellent market research
- A strong mode of entry
- Clear proposition and pricing
These elements are then collated into a rational, clearly defined strategy that secures a streamlined and successful market entry.
1. Set Out Your Goals
A successful market entry strategy begins with clearly defined goals. These goals act as the foundation for your entire plan, ensuring every step is aligned with your desired outcomes. Without a clear vision, it’s easy to lose focus or misallocate resources.
When setting your goals, consider the following key elements:
- Business Rationale: Why are you entering this market? Define the strategic purpose, whether it’s to increase revenue, diversify your customer base, or gain a competitive edge.
- Target Market: Identify the specific market you aim to enter, including its size, demographics, and potential for growth.
- Unique Value Proposition: What makes your product or service stand out in this market? Highlight the unique benefits you bring to customers.
- Steps and Timelines: Break down the process into actionable steps with clear deadlines to ensure progress is measurable.
- Budget Allocation: Assign realistic budgets to each step to avoid overspending.
- Success Metrics: Define what success looks like for each stage, such as achieving a specific market share, hitting revenue targets, or securing key partnerships.
By setting clear, actionable goals, you’ll create a roadmap that keeps your market entry strategy focused and effective.
2. Conduct Thorough Market Research
Market research is the backbone of any successful market entry strategy. It helps you avoid costly assumptions and ensures your decisions are based on data rather than guesswork. A thorough understanding of your target market will allow you to tailor your approach and maximise your chances of success.
Key areas to focus on during market research include:
- Market Size and Growth: Assess the size of the market and its growth potential. Are there enough customers to justify your investment?
- Customer Trends and Needs: Understand the preferences, behaviours, and unmet needs of your target audience. What problems are you solving for them?
- Competitive Landscape: Analyse your competitors’ strengths and weaknesses. Identify gaps in the market that your product or service can fill.
- Pricing Landscape: Evaluate pricing trends to determine how to position your offering competitively while maintaining profitability.
- Barriers to Entry: Identify potential obstacles, such as regulatory requirements, cultural differences, or supply chain challenges.
For example, if you’re entering a new international market, consider how local customs, language, and economic conditions might impact your strategy. By conducting comprehensive research, you’ll be equipped to make informed decisions and reduce risks.
3. Choose the Right Mode of Entry
4. Develop a Strong Proposition and Pricing Strategy
Strong budget management will make or break the ROI on new market entry. That’s why you need to consider it in your strategy. Proposition and pricing are affected by several factors, including:
- Budget: Define your expense budget by month or year, as well as your financial targets.
- Mode of Entry Plan: Your preferred mode of entry will have costs and risks associated with it.
- Timeline: Time and cost are naturally linked. If you want things done faster, it will cost more. Establishing a clear timeline for deliverables will help you foresee any potential budget pinch-points.
Your proposition and pricing should align with the needs of your target market while differentiating you from competitors. A well-defined value proposition and competitive pricing strategy will help you stand out and attract customers.
What Does a Market Entry Strategy Look Like?
Taking into account the above, the basic structure of your market entry strategy might be as follows:
- Mission Statement: Your goals for the market entry initiative. What the plan is designed to achieve, and the proposed date for achieving it.
- Situation Analysis: This will cover the areas raised in your research and analysis (above). A SWOT (strengths, weaknesses, opportunities, threats) summary may be useful here.
- Opportunity Size: A high-level estimate of the scale of opportunity you’ll be tapping into (e.g., the number of people/businesses within your target market and approximate spend on products or services like yours).
- Why Us?: What unique advantages do you plan to bring to bear in this market? Are there synergy opportunities? Are you addressing an unmet market need?
Need Help with Your Market Entry Strategy?
To avoid damaging assumptions and potentially costly miscalculations with your new market strategy, speak to White Space Strategy today. Our team specialises in helping businesses create data-driven, actionable market entry plans that deliver results.