Growth is the biggest challenge in any business, regardless of industry, with or without a global pandemic. In a world where external forces are impacting business success like never before, conventional wisdom and experience can no longer guide growth strategies.
Most growth occurs in spurts, followed by lengthy periods of plateaued performance.
To avoid staying on a plateau for too long, leadership must decide how to invest for growth to happen. Entering a new market is one intentional growth strategy that can provide new clients, and profitability, along with learnings for your business. To gain a strategic advantage, companies must determine "the what, where, and why" of the market environment they plan to enter.
Effectively entering a new market requires a commitment to competitive and market intelligence. Global research and advisory firm, Aranca, tells the story best. In the 1970s, it was hard for anyone to believe the American automobile market, protected by tariff walls and dominated by Chevrolets, Buicks, and Cadillacs could face competition from Japanese automakers. However, after studying the U.S. automobile market, the effects of increasing gas prices, as well as the advent of smaller family units, Japanese automakers identified an opportunity in the form of smaller, fuel-efficient cars. By analyzing and borrowing the best practices for manufacturing, design, and marketing from various countries, Japan was not only able to position itself as a contender but was able to beat the American auto majors on their home turf.
Competitive intelligence is the underpinning to successful new market entry, and it requires a commitment to discipline and patience as you assess your potential opportunity.
Essential steps to consider in this process include assessments of:
- Market/Industry - Analyze Present Conditions and the Direction of Where It's Headed
- Major Competitors - Including Shifts in Competition, Disruption, and Benchmarks
- Internal Capabilities - What Core Capabilities Can Be Leveraged
- Products/Services - Segmented and Evaluated for Emerging Innovation
- Target Customers - Who Are the Primary and Secondary Buyers
- Channels of Distribution - How Narrow or Wide?
- Pricing - Fixed, Flexible, or Volatile?
- Marketing - Positioning, Brand, Messaging, and Which Channels
- Other Considerations - Legal, Political, Environmental
- Key Metrics - How Will You Know You've Succeeded?
That's an exhaustive list, which is why patience is required. This level of due diligence will help establish a "go-no go" decision. If you decide to go, you will have all of the competitive intelligence you need to target your desired market with a well-planned strategy.
Aranca reminds us that "It was with competitive intelligence that the Japanese automakers were able to replace Britain's unreliable electrical systems with well-engineered products and install Germany's superb mechanical designs in affordable cars, and lower production costs by restricting color choices. All these strategic insights helped the Japanese automakers target their desired market intelligently with a well-executed entry strategy." The rest is history!
How will your business avoid a plateau? Connect with Janet for a brainstorming consultation.