But opening up a whole new geographic market can establish a brand with many more consumers, boosting its value. A select few can jump into non-adjacent categories (Virgin, for example). Some very strong domestic brands can move into adjacent markets (Dyson, for example, can leverage its reputation for air-moving engineering from vacuums, to hand-dryers, to room fans and even hair straighteners). That means increasing enterprise value requires diversification of the brand. Brand growthĪ huge proportion of value in modern enterprises is wrapped up in intangibles. Exploring them in detail is a useful first step in defining the later market entry strategy. What motivates companies to investigate entering a new market? Every organisation will have its own reasons. Why look elsewhere? The reasons for market entry That means undertaking a market-research-driven due diligence project before entering a new market is a must. The factors to consider are varied: there are economic and social dimensions, competition from local companies, the quirks of regional distribution channels, cultural mismatches… and much more. On the other hand, the cost can be significant, and the list of powerful global brands that have failed to successfully enter new markets is a long. The rewards of opening up a new market are potentially great. Today, a business in Bolton has myriad options for selling in Beijing an Australian specialist retailer has lots of ways into the Austrian market.īut the process of choosing which markets to enter, how and why remains fraught with danger. The rapid growth of global trade capacity, and particularly the ubiquity of the internet, has levelled the playing field. For decades, a handful of dominant players in markets such as food and drink (driven by marketing prowess) or automotive (reliant on economies of scale) had been able to enter new markets in ways that most businesses simply couldn’t imagine. Over the past 40 years globalisation has redefined what it is to be an international brand. And sometimes the most valuable insight is the hidden reason why you shouldn’t proceed… The art and science of market entry Understanding the local market – its distribution channels, culture, economic and social trends – through a market research-driven due diligence process is crucial. But there’s more to a market entry strategy than great products or services. Entering a new market can lead to a massive boost to sales, brand strength and long-term profits.
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