Any new market entry program should be designed to increase your chances for success in the North American marketplace.
To succeed, develop individualized strategies based on proven strategy techniques and policies. Then it is necessary to support those entry strategies to successfully implement.
Due to the sheer size and diversity of the USA (and North America), a company attempting a market entry cannot simply and without local market knowledge choose a strategy, operational business platform and location.
Many factors must be considered, including real estate, the labor market, the regulatory environment, local taxation, operational logistics, manufacturing and sourcing potential, proximity to customers, sales channels, competition and so on. The strategic leverage points associated with success or failure must be identified.
I am big believer in using quantitative and financial analytical tools and to provide businesses with the support they critically need before making their decision to enter into a new North American market.
The Alteris approach is very facts driven. Whenever possible, the facts of your situation should be quantified. While it will always be necessary to utilize subjective analysis, you should always strive to base a strategy work on quantifiable facts and financially oriented results.
Some of issues that need to addressed include:
- What is the strategic fit of the new entry opportunities under consideration to the core business? How does the market entry strategy align with the overall strategic direction of the company?
- What is the attractiveness of the specific market entry opportunity? How fast is the market growing? Where is it in the lifecycle? How intense is the competition? What is the market size and how much of the market can we expect to capture? Realistically, how profitable can this project be? What are the key determining factors of success? What investment is required? What other barriers need to be overcome? How attractive is this opportunity given our goals, capabilities, constraints and other available investment options?
- What is the appropriate timing of entry? Should the client push to be first to market, or is there value in waiting to learn more about potential, risks and challenges? Is there a disadvantage as a late mover?
- What is the competitive industry structure? Who are the stronger players and what are their capabilities?
- What mode of entry provides the best strategic fit (i.e., organic growth, acquisition, joint venture or other forms of partnership)? The mode of entry depends on many different factors. For Example, if an incumbent is established in the new market, should we consider making an offer to purchase the competitor? Would a joint venture be appropriate?
- What “scale” of strategy is most appropriate? Should the client consider a “direct attack” to dominant the market or seek a smaller niche position?
- What is the return on investment for the project, using various measurement criteria? What are the investment requirements and is that justified given the market potential? What is the project ROI, NPV, payback period or other decision making criteria? The Alteris method is very quantitative and financial driven.
- How will the project be financed? Does the client need to access external financing?
- If an acquisition or joint venture is the best market entry route, what is the best structure? Is the client team ready to effectively execute a transaction and integrate with the parent company?
- Who are the best strategic partners and professional service providers (law, accounting, etc.) for your USA based business?
Measuring the risks and benefits of new market ventures can be a daunting task. But, many organizations have enjoyed remarkable success by turning a new market entry into the cornerstone of their growth strategies.
