Business Strategy A Gu

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damental questions. How, where and when they currently purchase
and would like to purchase are also significant. The second thing to con-
sider is competitors strengths and weaknesses, but as these are likely to
be past or present, it is also worth thinking about likely reactions to new
entrants into the market. Lastly, it is important to understand whether
the market is growing or shrinking.
Innovate. A valuable approach when entering new markets is to chal-
lenge existing practices, so as to provide a better service and serve cus-
tomers in a way that delivers (and ideally exceeds) their expectations.
This requires skills of creativity and innovation, a talent for spotting
opportunities and the ability to re-evaluate the way the business oper-
ates. Questions to ask include:
Why are things done the way they are?
What would happen if they were approached differently, and
what would be the implications of an innovative approach (for
example, what would it mean for cash flow, production costs,
sales volumes, pricing and brand reputation)?
How will the position in the market be sustained and grown?
Are there practices from other industries that could be emulated?
Focus on the product. Getting the product right before launch is often
where most effort is spent, but developing a long-term strategy and
direction for the product is important as well. Things to consider include
how to make the product desirable with popular, distinctive (if not
unique) benefits, deciding which product features to emphasise and
planning future enhancements early.
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BUSINESS STRATEGY
Develop a pricing strategy. Getting the pricing strategy right depends
on a number of things, including the competitive situation, product
costs, product benefits and the nature of the market (see pricing deci-
sions above).
Develop a sales plan. When entering new markets, it is useful to focus
marketing efforts on quickly developing resources, including tangible
factors such as cash, sales volumes and customers, and intangibles such
as profile and brand reputation.1 Things that can help establish firms in
new markets include the following:
Direct selling and key account management enable the largest
potential customers to be targeted.
Public relations activities raise awareness of the product, its
principal features and benefits, as well as where to buy it.
Internet selling is a low-cost technique with instant, widespread
accessibility and the ability to provide targeted, detailed
information at low cost.
Database and direct-mail marketing enables potential customers
to receive tailored information.
Media advertising (magazines, newspapers, radio and television),
although expensive, provides mass coverage.
Trade fairs offer direct contact with current and potential
customers and a venue to launch products that will reach
opinion-formers (such as journalists).
Special-offer promotions and samples are an eye-catching way of
introducing new products, and they often work well for new and
unknown entrants into a market.
Securing supply. Supply issues should be addressed before launching
new products to ensure that quality standards and costs can be main-
tained, and that there is sufficient capacity to meet demand.
Extending activities with strategic partnerships and alliances.
Alliances are an extremely effective way of testing a new market or
establishing a new product in an existing market. They can be attractive
when entering specialist or distant markets, for example in reaching
little-known export markets. Partnerships may include distribution and
agency agreements, licensing agreements, franchising or joint ventures.
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SALES, MARKETING AND BRAND MANAGEMENT DECISIONS
Other things to consider when deciding how to enter a market
include the speed and timing of entry, as the time required to become
established varies considerably with each entry method. Profitability
and level of risk, including such matters as the percentage taken by
agents, distributors or other intermediaries, are important. Trade and
economic issues, including tariffs, stability and infrastructure, and polit-
ical issues, such as legal restraints on ownership or business activities,
may also be decisive in determining the method of market entry.
The strategic importance of the market and its potential are signifi-
cant in the choice of entry method. If the market is seen as having sub- [ Pobierz całość w formacie PDF ]

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