Written by Miguel Van Damme
Prior to going on holidays, you first choose to which destination you want to go based on several criteria. Afterwards, you will decide what to do during your stay to make the most of it. This logic can apply to a company that desires to grow. If the best option is to venture into a new market (e.g. a new country), they follow a similar path. First, they need to select the appropriate market and secondly, they need to articulate their go-to-market strategy on how to enter the market and what to do within that market.
First things first
This process starts with a market assessment of all the potential markets the company could enter. Different analyses could be done to support the market assessment such as PESTEL [1], SWOT [2] or Porter’s five forces [3]. Whatever method(s) you decide to work with, you will have to answer the following key questions:
What are the trends in the market? How is it evolving?
How competitive is the market? Who are the different players?
Who are the different stakeholders in the value chain?
What are the current price levels of the market? How have they evolved?
Are there any barriers to entry (political, patents, brand loyalty, etc.)?
What is the total size of the market?
Where to play
Answering these questions with the appropriate tools will enable to select the most attractive markets by visualizing the outcome on the graph as illustrated here below. By mapping the different markets based on their size and accessibility – low to high based on the outcome of market assessment – the largest and most accessible markets will be located on the top right of the graph. This mapping will allow you to have a clear view on your priority markets and to know where to play.
How to win
After selecting the market(s) to enter, the go-to-market strategy must be articulated to ensure the highest chance of success. There are two crucial steps that shouldn’t be forgotten:
Identify your target customer(s) by matching the USP [4] of your product or service with the stakeholder(s) in the value chain who have the most benefits in using your product or service.
Identify potential local partners or acquisition targets who have certain characteristics that will enable you to accelerate your market penetration such as a commercial team or an established distribution network.
While the aspects explained above are crucial to enter new markets successfully, you will have to take other elements into account too such as the pricing strategy, distribution channels, marketing plan and the sales strategy.
Are you looking to venture into new markets? Don’t hesitate to reach out to discuss how BrightWolves could help you!
Footnotes:
A PESTEL analysis is a framework or tool used to analyze and monitor the macro-environmental factors (Political, Economic, Social, Technological, Environmental and Legal) that have an impact on an organization
The result of the PESTEL analysis can be used to identify threats and weaknesses which are used in a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats)
Porter's Five Forces Framework is a method for analyzing competition of a business. It determines the competitive intensity and, therefore, the attractiveness (or lack thereof) of an industry in terms of its profitability. The five forces are: Threat of new entrants, Threat of substitutes, Bargaining power of customers, Bargaining power of suppliers and Competitive rivalry
Unique Selling Proposition: the features of a product or service that bring the most value to the customers and differentiate you from competition