If you’re considering leading your business into a new sector, don’t underestimate the value of market analysis. Solid research into customers, competitors, past trends and emerging developments is the foundation of a successful business plan. Sound knowledge of approaches that have delivered success in the past, together with a deep insight into today’s winning strategies will inform the path you take. So do your homework thoroughly because, it’s sure to pay dividends and help you avoid common mistakes.
The three most common pitfalls that trip up new market entrants are:
Poor knowledge of their new market
Mismatch between capabilities and customer needs
Lack of differentiation from the competition
The last point is particularly important, because successfully differentiating yourself from the competition is absolutely critical. You may be an established brand in your primary marketplace, but will your brand stretch far enough to provide leverage in the new market? If you’re eyeing up an adjacent market, then your brand may deliver significant value and give you a running start. But if your brand doesn’t fit your new target marketplace then consider creating a new one. A strong brand is essential for new start-ups, and even though you may consider your company to be well-established, your new audience may not know you so well.
SETTING YOUR OBJECTIVES
Setting realistic objectives is important too. Don’t assume you’ll enjoy the same response rates that you see in to your current marketing campaigns, and don’t set your objectives too high. You may face a very different competitive environment and an entirely new target audience. So customer analysis in another important creating a successful strategy. You need to understand what your customer s look like, how they behave and transact, what they want, and what they’ll want tomorrow. You also need to understand how quickly your new competitive environment changes. Will you need greater flexibility to meet customers’ needs? Will you have to work harder to delight them? And will you have to move faster to stay ahead of the competition? Your market research will inform your value creation strategy.
THE 4 COMPONENTS OF VALUE CREATION
1. Improve Where can you raise your game above current industry standards? It might be in service provision, or product quality. If you can identify an opportunity to move ahead of existing providers, you’ll achieve real stand-out.
2. Create What’s missing? What would add value within your target sector? What are current providers not delivering that you could? As in any industry, innovation is critical to commercial success.
3. Reduce Where can you reduce costs below those of your competitors. As a new entrant you won’t have the burden of legacy systems or processes, so you have the opportunity to create a leaner business model that minimises cost, which can be reflected in pricing.
4. Eliminate Is there anything that is taken for granted? Anything that is done simply because it’s always been done? Any opportunity to eliminate factors that are holding the industry back? As an outsider, you may be able to identify factors that are ripe for termination.
To find out more about creating an intelligent strategy when planning new market entry, get in touch today. It costs nothing to talk, and it will give you the opportunity to discover more about devising strategies which minimise risk and optimise growth.