The Market Entry Framework is a tool taught in all business administration schools and it is used to evaluate
- Entering a new geography.
- Entering a new product category.
| 1. Market | 2. Capabilities | 3. Financials | 4. Entry strategy |
| Who are the customers? And what products do they buy today?
|
What are the main differences between the company’s current market and the new market? | What’s the current financial situation of the client? Does it have spare financial resources to invest? | When should the company enter the market? Is there a first mover advantage or is it better to wait for a few competitors to try first? |
| How big is the market? And how fast is it growing? | Has the company ever done any new market entries in recent years? | How much will it cost to enter the new market? | At what speed should the company enter the market? Test a region first, or enter the whole market at once? |
| How profitable is the market? | Have other people similar to the client tried to enter the new market in the past? Is there anything we can learn from their attempt? | What will be the ongoing costs once the market is entered? | Should the company establish its own entity and have full control? Or should it buy / build a Joint Venture with a competitor? |
| How intense is the competition? Are there more and more players? | What are the expected revenues from the new market? Through which channels / customers will they be achieved? | Should the company control the market entry from its head office? Or should it give a lot of freedom to the new country manager? | |
| How heavily regulated is the market? Are there barriers to entry? | What is the overall expected Return on Investment from the market entry? |
We will discuss a few consulting cases and show that this framework may not work well when entering foreign market.