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Strategies to Consider When Your Business Enters a New Market
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Strategies to Consider When Your Business Enters a New Market

Entering a new market is always a stressful undertaking, especially if you’ve already established a local nic...

Strategies to Consider When Your Business Enters a New Market

Entering a new market is always a stressful undertaking, especially if you’ve already established a local niche market and you’re used to doing things a certain way. Just because it worked in the local market or in a limited circle doesn’t mean it will translate well to a new market, especially if it is in the international arena.

The changes in strategy you will implement when your business enters a new market will depend on a multitude of different factors.

 

Strategies for new market entry

First off, there are four general strategies for entering new markets. These are:

  • Direct investment – acquiring an existing business in the market and expanding it to include your product or service

  • Co-operative approach – getting into a joint venture or an alliance with an existing business or licensing a business to bring in the product or service

  • Direct marketing – reaching out to your customers directly

  • Indirect marketing – franchising

These are all excellent strategies for entering a new market, but they won’t always work for every product or service with the same degree of success or penetration. To determine which strategy will work for you, sit down and ask yourself some tough questions.

 

 

Factors to determine market entry strategy

The market is made up of people, culture, behavior, market forces, and the all-mighty competition. When attempting to enter a new market, you must consider:

  • Customer identity

  • Buying behavior

  • Methods and channels of purchase

  • Main competitors existing in the market

  • Incentives for investors

 

Once these factors are identified, you can decide which market strategy will yield the best results. For example, if the product or service is new to the market and there are no existing competitors, a direct investment may be the best strategy to take advantage of the existing market for a related service or product to introduce the new product or services.

You will also need to consider if a particular market is conducive to introducing your brand. Some areas encourage investment by offering tax breaks and other favorable treatment to foreign investors. In such cases, a joint venture may be the best strategy, as it involves partnering with a person or organization with better knowledge of how to take advantage of these incentives to investment.

 

Try using a Website Builder to create your next business online.

 

What are your favorite strategies? Tell me in the comments.

 

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