Regardless of whether you are setting up a new business for the first time or expanding an existing one, entering into a new market is a process that always involves both risks and opportunities.
In terms of the risks, your core business focus might become overstretched or diluted, with the result being that you detract from what you originally did well. It also might not prove to be as profitable as hoped, which could drain your business’ resources.
These potential risks, however, must be set against the many opportunities that come with such a move.
For example, entering a new market can allow you to reach new customers and grow your revenue by substantial margins. This can have obvious positive long-term implications for your business.
One of the ways that you can manage the risks and maximize the opportunities of expanding into new markets, is by developing a clear market entry strategy. In this short article, we will identify some of the factors to keep in mind when you are developing a market entry strategy.
Why expand your target markets?
Before we discuss these factors, why should you expand into new markets? Here are some of the main considerations:
- Gain customers, increase revenue: As you might expect, by entering new markets you can expect to potentially gain more customers and generate more revenue. This is a natural result of entering into new markets as your potential customer base is now expanded.
- Diversify and reduce risk: By expanding into a new market, you reduce your reliance on the other markets you have relied on to generate revenue up until now. This acts as a way to diversify and reduce your overall exposure to risk.
Although there might be other benefits to expanding into new markets, territories or demographics, the two outlined here are the main ones to keep in mind!
Creating a market entry strategy: What factors to consider?
As mentioned at the start of this article, by creating a market entry strategy you can both reduce the risks associated with entering new markets, while also maximizing the opportunities you can gain. So, what is a “market entry strategy” and what factors should you consider when creating one?
Essentially, a market entry strategy is a way of setting out all of the specific factors you need to consider and the steps you will take when expanding into a new market. It consists of outlining your goals, an overview of the market, what you intend to do, any targets you hope to hit and how you will achieve them.
Here are some of the main factors to keep in mind when developing your strategy:
1. Have clear goals
Deciding what you want to achieve is essential to success when expanding into new markets. Some of the details to identify include: your overall business goals, any sales or revenue targets, what product or service you will be providing, your target market, the budget you have to work with and any other resources you might need.
Doing proper research is essential to any business strategy, especially one involving market expansion. As such, start collecting information on the size of the market, any relevant consumer trends, your competition, your unique selling points, the technology you might need access to and any regulatory, legal or other barriers to entering and operating in the target market.
Having the right platform to work with can significantly ease a new market entry. This allows you to more efficiently and effectively service any new or existing customers you might have. It also supports the provision of a better level of service.
For example, if you are hoping to enter the iGaming market, having a fully functioning online casino platform that meets accepted industry standards will be essential to meeting the demands of consumers. In this sense, full iGaming platform creation assists easy entry into the market.
4. Develop and refine your strategy
A market entry strategy is rarely a finished strategy document. It is something that is intended to be iterative in nature. Rather than thinking of it as something you work towards the completion of, frame it as an iterative document that will help to guide your business. Regularly revisit your strategy document, particularly when new insights emerge. Outside advice should also help to guide the shape and content of it.