Market entry strategy

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Market entry strategy
Q2 2008
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A sound market-entry strategy gives an operator
greater control over its market introduction and
launch expectations, thereby ensuring financial
targets are met
Pressures faced by new entrants

• A well-founded market-entry strategy minimises
  the uncertainties faced by new entrants
• Analysys Mason has developed a systematic
  approach to market-entry strategies, allowing us
  to create well-supported and objective plans that
  extract maximum value from internal assets and
  investment, and ultimately increased
  competitiveness and secured revenue
• We have used this approach to
• decrease the financial uncertainty that derives
  from lack of comprehensive market analysis and a
  structured strategic plan
• enable business plan collaboration and financial
  planning
• initial business case assumptions need to be
  revisited to better correspond with market
  conditions and chosen market position
• create launch efficiency by delivering a
  framework for subsequent planning of tactical
  launch activities, coordinating and prioritising
  tasks for launch team
• enable risk management and market perception
  control through contingency planning
• Launch organisations face immense pressures on
  market entry, created by internal and external
  expectations
• some of these pressures can be eased by
  developing a clear and structured market-entry
  strategy and effective functional plans

Internal constraints and expectations

• Time constraints
• rapid deployment is crucial to avoid rise in
  market share cost and to deliver predicted
  financial results
• Resource limitations
• core launch teams are often rapidly assembled,
  and specialist expansion is done gradually,
  creating a large resource gap during the
  implementation phase
• Financial pressure
• as financial targets and expectations have been
  set prior to launch, any unpredicted market
  activity and launch delays will disturb initial
  customer take-up and revenue generation

External constraints and expectations

• Market data
• in many instances organisations lack in-depth
  understanding of market drivers or have limited
  access to market data
• Competition
• competitors will plan pre-emptive, disruptive
  action to improve their own positions and secure
  their customer base prior to new entry

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Analysys Masons structured approach to
developing an entry strategy begins with a
comprehensive analysis of the market, based on
market data or tailored research
Market analysis

• Our approach to developing a market-entry
  strategy follows a proven and structured process,
  based on extensive industry experience and
  in-depth understanding of all aspects that feed
  into a commercial launch
• A comprehensive analysis, using market data and
  tailored market research, allows us to assess all
  areas affecting the operators strategic
  direction
• market dynamics detailed consumer and business
  market segmentation and analysis of market
  drivers will be undertaken to identify the most
  valuable target segments and underlying reasons
  for market growth. Specific target areas are
  evaluated to provide key inputs retail
  structures, financial transactions systems and
  Internet usage provide input to sales and
  distribution planning
• competitive landscape extensive competitive
  profiling in areas such as positioning, brand,
  target segments, value proposition, market offer,
  pricing, customer care, sales distribution,
  coverage, network support systems enable
  assessment of competitors strengths and
  weaknesses
• macro-economic outlook analysis of relevant
  macroeconomic data determine market and segment
  growth
• legislation and regulatory framework description
  of limitations or possibilities within the
  current regulatory environment that affect market
  and segment growth
• internal assets/technology analysis of all
  internal assets including technology, brand,
  partnerships will be done to clarify which
  sustainable competitive advantages the company
  holds
• An internal SWOT highlight areas of valid
  advantages and disadvantages, providing input to
  market entry positioning and value proposition
• Identification of strategic risk areas at an
  early stage enables preparation of mitigating
  actions prior to market entry
• Conclusions from the market analysis together
  with internal SWOT and identified strategic risk
  areas form the basis for describing the market
  opportunity

Market dynamics
Competitive landscape
Macro-economic outlook
Regulatory environment
Internal assets / Technology
Internal SWOT
Identified strategic risk areas
Summary and conclusions
Market opportunity description
Market entry strategy
Vision and MissionObjectivesOverall
StrategyPositioningValue propositionBrandTarge
t segments
Strategic directions
PricingBrand and communication Sales and
distribution
Products and servicesCustomer serviceLaunch
phasing
Contingency plan
Tactical launch plan
Products services Pricing Brand and
communication Sales distribution channels
Customer service
Internal and external factors
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Analysys Masons overall market entry strategy
statement and market position clearly
demonstrates which main directions are necessary
to reach market objectives
Market analysis

• A description of the companys vision and mission
  statements as well as financial objectives form
  the starting point for the market entry strategy
  as they set the framework in which a new entrant
  will function
• Short-term objectives, sales targets, market
  share and brand awareness, will be set against
  the market opportunity and supplied as input to
  the business planning team
• Analysys Mason will develop an overall market
  entry strategy statement, clearly demonstrating
  which main directions are necessary to reach
  stated objectives
• The positioning statement visibly describes the
  companys strategy in relation to competition and
  the value proposition captures the companys
  differentiating advantages and their benefits to
  potential customers
• The brand strategy explains which values are
  important to communicate in order to enhance the
  companys relationship with its customers
• Targeted customer segments that need be addressed
  in order to deliver desired objectives will be
  specified and prioritised
• Strategic directions in all functional areas
  products services, pricing, brand
  communication, sales distribution and customer
  service further detail the overall entry
  strategy. Finally, the launch phasing section
  explores the various viable market entry options,
  their pros, cons and pre-conditions

Market dynamics
Competitive landscape
Macro-economic outlook
Regulatory environment
Internal assets / Technology
Internal SWOT
Identified strategic risk areas
Summary and conclusions
Market opportunity description
Market entry strategy
Vision and MissionObjectivesOverall
StrategyPositioningValue propositionBrandTarge
t segments
Strategic directions
PricingBrand and communication Sales and
distribution
Products and servicesCustomer serviceLaunch
phasing
Contingency plan
Tactical launch plan
Products services Pricing Brand and
communication Sales distribution channels
Customer service
Internal and external factors
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Detailed tactical launch plans enable efficient
and controlled implementation, leading to rapid
market introduction
Market analysis

• Strategic directions are further detailed into a
  tactical launch plan, covering all functional
  areas. This provides the launch team and vendors
  with necessary specifications for implementation
  and ensures that all launch activities support
  the overall market entry strategy
• A product service roadmap will be developed by
  matching technical capabilities and benefits with
  customer needs. The roadmap includes detailed set
  of individual services or product packages at and
  post-launch
• Pricing launch packages and separate services
  includes development of complex price modelling
  and deployment of conjoint research to assist in
  the choice of, from customer perspective, the
  most valuable pricing option
• Brand and communication plan for market entry
  includes development of brand wheel (attributes,
  benefits, values) and full launch campaign
  planning
• The development of a sales and distribution
  channel plan involves creation of a tailor made
  sales and commission model, detailing of the
  companys sales and distribution channel
  structure and analysis and recommendation on
  commission structure and levels
• The customer service plan includes high level
  customer service processes and customer centre
  dimensioning
• Clear contingency planning enables the company to
  pre-empt the occurrence of situations that affect
  the planned activities and prepare plans to
  remedy those, resulting in shortened reaction
  time. Both internal and external factors will be
  analysed
• Internal e.g. technical and organisational
  issues
• External e.g. competitive market activities and
  regulatory actions

Market dynamics
Competitive landscape
Macro-economic outlook
Regulatory environment
Internal assets / Technology
Internal SWOT
Identified strategic risk areas
Summary and conclusions
Market opportunity description
Market entry strategy
Vision and MissionObjectivesOverall
StrategyPositioningValue propositionBrandTarge
t segments
Strategic directions
PricingBrand and communicationSales and
distribution
Products and servicesCustomer serviceLaunch
phasing
Contingency plan
Tactical launch plan
Products services Pricing Brand and
communication Sales distribution channels
Customer service
Internal and external factors
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Structured and comprehensive planning and
interaction with business planning and technical
teams enables coordinated effort, bringing market
entry success

• The commercial market entry strategy must work in
  unison with business planning and technical team
  to ensure a coordinated market entry approach
• Business planning unit requires market input when
  developing business plan and budgets
• Positioning, price strategy, marketing investment
  and coverage (in relation to competition) affect
  potential market size and share
• Segment uptake assumptions serve as input to
  market share calculations
• Development and deployment of network and support
  systems need take commercial requirements into
  consideration and vice versa
• Technical possibilities and limitations are taken
  into consideration when developing the market
  entry strategy
• Market offer and customer approach produce
  requirements for support system configuration

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In addition to market entry strategy development,
Analysys Mason canprovide complete launch
support and coordination of connectedbusiness
functions
Master Project Plan and Project Management Office
Business Planning and Budgeting
Organisational management
Corporate and operational KPIs
Source Analysys Mason
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Case study Fourth entrant market entry strategy
and detailedlaunch plan
Business challenge

• Our client had acquired a mobile license for
  Afghanistan, entering as the fourth operator in
  an extremely difficult market with regards to
  economic and social structures, security issues,
  geographical accessibility and lack of reliable
  market information. Furthermore, our client did
  not have a separate Programme Management Office
  (PMO) to oversee launch implementation,
  increasing the demand for a clear and structured
  market entry strategy and subsequent tactical
  plans
• Analysys Mason was hired to undertake development
  of a market entry strategy and detailed launch
  plan to steer the launch team and contracted
  suppliers towards a successful market
  introduction. In parallel, Analysys Mason
  developed a long-term business plan and detailed
  operating model / budget

Approach

• Conducted a comprehensive market analysis
• Developed a robust market entry strategy
• Setting attainable sales objective, in liaison
  with the business plan
• Determining durable positioning and value
  proposition
• Developed detailed tactical plans for each
  functional area
• Recommended segmented market offers for launch
  and post-launch, having evaluated various options
• Build a comprehensive price model and initiated
  market research to evaluate tariff options
• Developed complete sales and distribution channel
  structure including modelling of commission
  structure and levels
• Created a brand adapted to local market
  conditions and developed a communication plan

Benefits and results

• Analysys Mason produced a complete market entry
  strategy and detailed tactical launch plans,
  allowing our client to formulate a clear and
  differentiated market position with aligned
  market offering, pricing, communication, customer
  service and sales distribution structure. This
  enabled complete stakeholder buy-in and efficient
  launch plan execution

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Analysys Mason has assisted several new entrants
worldwide indeveloping their market entry
strategies