How to Design The Best Market Entry Strategy Using Market & Competitive Intelligence

After successfully establishing themselves in a particular market, many companies look to expand and explore other markets. However, this means venturing into an entirely new territory; one which may already have its share of established players, i.e. soon-to-be competitors. This is why they must design the best market entry strategy. A new market entry can be a tremendous leap of faith for organizations believing that this new step will help them scale and grow. Market entry has many dimensions – and no business is too big to skip them, and neither should they. In order to have a realistic chance at competing with already established enterprises, you need the best market entry strategy that will allow your brand to stand out within the market. And market and competitive intelligence (M&CI) is just the way to do it. In this article, let us have a look at a step-by-step process of leveraging M&CI to make sure that your organization builds the best market entry strategy to maximize its chances of success.

Conduct Research For The Best Market Entry Strategy

It is imperative to plan which areas will be included in your market entry research. Ideally, a good place to start is by creating a table of contents for your market entry research report. 

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Below is a standard format of a market entry research report to give you some direction. However, it is not mandatory to adhere to this format, and it can be changed based on the requirements. Keep this in mind if you want to have the best market entry strategy.

New Market Entry Planning: Standard Report Format

     1. Segment and market overview

• Market definition, segmentation, products and services 

     2. Market size and dynamics

• Market size: Total historical sales figures (last 5 years), sales volume, sales growth and sales outlook (next 2 years) 
• Market size segmentation by geography and products, market statistics (segment performance in terms of their indicative KPIs) 

      3. Key growth drivers

• Assessment of the service/solution’s growth values along with the key indicators and drivers
• Growth inhibitors 

      4. Key trends & issues

• 4-5 key trends & issues for the segment within the region
• Trends and issues substantiated with the latest one-year examples

     5. Strategic initiatives

• Recent developments and initiatives undertaken 

     6. Competitive analysis and landscape

• Competitive analysis for at least 5 leading players prevalent within the selected sector in the market, on the basis of information such as:
  • Market share
  • Business overview
  • Key products & service lines
  • Key financials (Sales, net profit, growth %)
  • Operating metrics
  • Recent developments 

      7. Outlook

• An understanding of the future trends, growth plans & outcomes, and scope of the segment within the region 

Sourcing Intelligence For Your Report – An Essential Step For The Best Market Entry Strategy

Primary and secondary research modes will both be invaluable when sourcing intelligence for your report, as they’ll provide fundamental market insight and strategic information to use against competitors. This is a strongly recommended step if you want the best market entry strategy.  Initially, it’s a good idea to use secondary research, analyzing publicly available insights. After that, for more in-depth intelligence, move on to interviewing people whose knowledge of the market will provide more nuanced insights.

Read: 3 Must-Follow Phases To Pick The Right Sales Channel Strategy Using Competitive Intelligence

Methods of Secondary Research

       1. Keep abreast of world events that influence the target markets

Watch for announcements, news, press releases, etc., related to your target markets, product/service and topics of interest. Use a structured framework such as PESTLE (political, economic, social, technological, legal and environmental) to assess the market. This will help you answer questions necessary for the best market entry strategy, such as:

Political questions –
How stable is the country?
What’s the prevailing ideology?
What biases – intervention in markets, say, or taxation – do politicians have?

Economic questions –
How rich is the country?
How is wealth distributed?
What’s growth like, and where is it likely to continue?

Social questions –
What’s the culture in the country?
What are the typical social structures – family, work, community?
Are there any religious norms affecting business?
What are the general education levels?

Technological questions –
What’s the infrastructure like?
How wired is the country?
How lumpy is technology penetration?
What is the tech savviness of the population?

Legal questions –
What are the rules regarding business ownership?
How about the liability laws?
What recourse do overseas businesses have in the courts?

Environmental questions –
How might the local climate affect the product or service?
What about the use of resources? Or end-of-life disposal of products?

       2. Analyze trade and economic statistics    

Trade statistics are generally compiled by product category and by country and provide information concerning shipments over specified periods of time. Demographic and general economic statistics, such as population size and makeup, per capita income, and production levels by industry, can be important indicators of market potential for your company’s products. Most countries have a department of Commerce or a similar government/regulatory agency, where you can find trade statistics. Or, you can find this information on trade and industry association websites or publications prevalent in the market/industry/geography.  Remember, that while secondary data sources are critical to new market entry research, they have limitations. The most recent statistics for some countries may be more than a few years old, or the data may be too broad to be of much value to your company. Thus, primary research is necessary.

Methods of Primary Research for The Best Market Entry Strategy

Conducting primary research for your new market entry will involve collecting data directly from the foreign marketplace through interviews, surveys, and other direct contacts with representatives and potential buyers. You should also attend seminars, workshops, and international trade shows in your industry to collect insights. And don’t shy away from talking with successful providers of similar products in the geography (your soon-to-be competitors).

Primary research has the advantage of being tailored to your company’s needs and provides answers to specific questions. However, the collection of such data on your own is time-consuming and expensive and may not be comprehensive.​ This is why in order to gain the right insight to build the best market entry strategy, you may need to work with external agencies offering market and competitive intelligence services that collect the data for you and help you analyze it. 

Conclusion

While many companies take a shot at building the best market entry strategy, they aren’t always successful. Twenty percent of small businesses fail in their first year, and 50% of small businesses fail in their fifth year. Only 30% will celebrate their 10th year in business. And even large businesses aren’t exempt from failure when expanding. Thus, your best bet is to perform as much due diligence as possible by conducting thorough new market entry research. Leveraging market and competitive intelligence in the initial stages of planning and strategizing your new market entry minimizes the chances of failure. This is done by providing in-depth knowledge and data about the new market on which to base your decisions. Hope this article helps you plan the best market entry strategy to achieve your company’s goals.

About the author, Chirag Bansal:

Chirag is an entrepreneur at heart and loves using storytelling to convey his ideas, both professionally and personally. Born and brought up in Delhi, India, he launched Examformula (an ed-tech platform) and eventually sold it to one of the largest ed-tech players in India. Professionally, he has 15 years of experience across market research, market intelligence, and competitive intelligence for sales, strategy, and knowledge management functions. When not working, you can catch Chirag reading books or creating Instagram reels with his two daughters – Iqra and Noah.

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