Once a business is established and thriving in its home market, it is often seen as the right time to branch out into a new market. There is every possibility that the company understands its existing market, its customer base and their requirements and knows how to meet these needs effectively. If the company enjoys strong sales, has great brand awareness and the business is stable overall, it may be the right time to take the plunge.

However, as with all new ventures, there are risks attached to this move and it is not a step to be taken lightly. A new market will not be so comfortable and there will be new competitors and unknown threats. The key to success is a disciplined approach with the appropriate level of investment into a thorough market analysis.

How to Enter a New Market

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In this article, we look at, 1) steps to take when entering a new market, 2) tips for entering a new market, and 3) case studies of companies that have entered new markets successfully.


1. Commit

It is of foremost importance to clearly identify who you will be selling to. This may sound simple, but there is often an overly optimistic need to capture a larger share of a new market. A smaller market will make it easier to assess customer requirements and ensure that a larger chunk of a smaller market is obtained rather than an insignificant part of a large share. It is also imperative to set a clear timeframe within which the desired target share is to be achieved and results of the move are to be assessed.

2. Identify Entry Points

Once a clear market is identified, it is necessary to identify potential points of entry. To minimize initial investment and maximize future revenues it becomes vital to study key possible entrance points, weigh pros and cons of each and then make an informed decision. The final choice should also ideally allow for future growth possibilities, both inside the new market as well as into adjoining ones. Any entrance point chosen should be assessed against a set of criteria, such as, does it allow access to an underserved market? Is there a strong need that can be fulfilled? Are the key decision makers among the target audience accessible and do they have the funding needed to find the new solution attractive? Are there any existing competitors and is the new solution strong enough to counter their resources and knowledge of the market?

3. Define Market Entry Strategy

All the activity thus far leads right into the roadmap for future steps – the strategy for entry into the market. The first step is to price your product. It needs to strike a balance between affordability for the target audience and feasibility for the business. It also needs to take into consideration existing pricing strategies and how to place the new product within them. Once the price points are defined, the new product or solution can now be positioned accordingly. How do you want to be perceived by the customer? With this target perception in hand, the communication strategy comes into play, where the target audiences as well as the methods to be used to reach them are identified and consolidated. All levels of the target audience need to be considered carefully, including influencers, decision makers, media, end users among others. And once all this is carefully set in place, the distribution model is designed which is the most effective means of putting the product into the user’s hands.

4. Assemble Plan

Any strategy needs to be followed up with a detailed action plan. This turns a high level plan into an on-ground implementation solution. This should include details of all required marketing plans and campaigns as well as timelines for all these to be set into motion. Clearly defined milestones such as sales targets, market share etc need to be decided upon with all the key stakeholders. All campaigns and targets need to be communicated to the relevant personnel and clear ownership needs to be assigned for each of these processes to ensure transparency in evaluations. Processes also need to be defined and communicated for all activities such as what will be the sales cycle followed and how will leads be pursued and closed.

5. Research

A well planned approach following the steps above should ensure that your risk is minimized. But to further strengthen and support the plan, some basic research can be carried out on a focus group. Identifying a well-balanced cross section of the target audience and approaching them either in person or via an online survey can help provide some basic results that can provide data to make any changes before a full market entry is committed to.

6. Test

Another risk mitigation strategy is to run a pilot project in the target market. This test needs to be carefully defined so as to ensure that it is big enough to give an accurate depiction of a large scale roll out effort but not so big as to suck in additional resources and commitment. By reaching a few key milestones in the pilot study, any remaining issues can be ironed out before full deployment.

7. Ramping Up

You are now ready for a full scale roll out. Armed with a concrete strategy, a detailed plan of action and results of research and pilot phases, it is now time to grow and try to achieve more market share. The goal should be to target increased market share and not just increased revenues. A focus on market share will mean increasing both marketing and sales efforts simultaneously. As you sell more, the easier it will to sell because there will be more visibility of your brand in the market and general buzz about the new player.

8. Exit Strategy

The last but extremely important step of this process is to plan for both success and failure. What will you do if you achieve phenomenal success? You could commit for the long term or sell while you’re ahead and move on to new markets. Or if you fail to achieve the milestones set in the specified time, will you try to learn and continue or cut out before further resources and time are wasted. In any case, a timely move can only be made if a plan is already in place.


We’ve given you a detailed plan for stepping into new markets. Some additional tips to consider before taking the plunge are:

  • Choosing the right country or region; If your growth efforts are towards a new country or region, identify where the demand is strong and the supply weak. Then pick one country and focus a strong strategy. If you plan to target a region, make sure it is one with a similar culture or languages.
  • Check cost of doing business; Is your new target market mired in unnecessary or exceptionally high taxes? Are there import duties that you need to consider? Are there any hidden costs that may emerge later on? All these need to be factored into the plan for entry and whether you will be able to have a competitive pricing strategy.
  • Know the people; Before stepping into a new market, try to get into the minds of the people you’ll be selling to. What are their tastes? What do they like to buy? How much are they willing to pay for products and services? How do they like to shop?
  • Know the competition; Who is successful and who is just there? Try your best to learn from success as well as failure so you don’t repeat mistakes. If there are too many players already, would it be best to partner up?
  • Choose the right partner; If you do decide on a business model that supports partnering up, make sure that they have the same way of work as you do. Are they to be trusted? Can you rely on them to do business as you would and ensure that your products/services are marketed and provided as they should?
  • Understand the Challenges; Make sure that you approach a new market with the appropriate respect. Don’t assume that the target audience and the environment will behave as you are used to. Instead, approach each issue as an unpredictable entity and keep an open mind towards solutions
  • Know the law; Try your best to work with local experts in understanding the laws that govern business in your new market. From personnel laws to taxes and custom duties, there are many different factors to know and learn
  • Begin with the right attitude; Begin as you mean to continue with the business. Set up collaborative practices, ensure transparent business and be open to changes in your plans.


For inspiration and best practices, consider the following examples. Both are large companies, recognized world over. But in entering difficult markets, both did their due diligence to achieve successful footholds in their target region.

Huawei Enters India

Huawei is second largest supplier of telecommunications equipment in the world. Huawei set out to enter India in 2000. There were several challenges to be overcome. The Indian telecom supplier market was heavily saturated and to make an impact, Huawei needed to separate itself from the rest and create a distinct identity as well as a reputation for reliability. Historically, Indians have viewed Chinese companies as hard to form relationships with and Chinese made products as subpar and inferior. In addition, China and India have relatively uneasy diplomatic relations.

To counter these issues Huawei employed carefully thought out strategies. Contrary to the market view of inferior products, Huawei channels 10percent of its yearly profits into research and development. Given high sales figures, this is a substantial amount. Huawei began establishing its foothold in India by setting up R&D and service center facilities in India and hiring predominantly locals to show commitment to creating value for Indians rather than just extracting benefits. India is now Huawei’s second largest research center outside China.

In addition to this, Huawei works with local producers at its manufacturing plants in Chennai. Sourcing components locally is cheaper and allows local companies to raise their manufacturing standards to international levels of quality and become more competitive and skilled.

Huawei is now working on positioning its smartphones as aspirational products by working with local English Language channels to hold contests and beat the stereotype of a low quality Chinese product. As an employer, the company rewards R&D talent and promotes Indians to managerial positions. By establishing a strong research and innovation reputation in India, Huawei can boost its image worldwide.

Huawei’s entry into the Indian market is a great point of reference for any company. The lesson to learn is that establishing trust, building and sustaining relationships and showing continuing commitment to the new market can lead to a successful foothold and increased opportunities.

Starbucks Enters China

Starbucks has a strong presence all over the world. Over the years, the company has developed an internationalization strategy that allows it to enter new countries. Market research plays a key part in Starbucks’ major market entrance strategies.

In its bid to enter China, Starbucks needed to be as inoffensive as possible to the Chinese culture. Through research it was established that the usual advertising methods may come across as a direct attack on the tea culture that prevails. Instead, stores were opened in busy areas with high traffic and visibility to promote brand recognition. In addition, products were introduced that included tea based ingredients, helping bring together the tea and coffee drinking cultures.

Negative views towards elements of capitalism were also a key consideration. Starbucks carefully researched this aspect and discovered that the middle class in China accepts Western brands and luxury items as a means to pursuing a certain lifestyle of quality. The no longer consider these to be signs of over indulgence or decadence and neither do they see it as contrary to nationalism. Major cities in China now rank high in sales of luxury goods and availability of luxury stores.

Through market research, the company was also prepared for the fact that China is not one similar market. Instead, different strategies were created for different areas. Northern Chinese culture differed substantially from eastern China. Spending power was considerably lower inland as compared to more prosperous coastal cities. This complexity was catered for by establishing partnerships with local companies to ensure successful expansion. This strategy helped Starbucks customize its offering according to regional tastes. Starbucks also understood that western brands are perceived to higher quality than Chinese brands and are therefore seen as premium brands. Through trained Baristas that act as brand ambassadors, the company ensured consistently high service and product quality.

Fearing illegal copies of its business model and brand, Starbucks anticipated the need for copyright protection. Within four years of opening its first café, all major trademarks had been registered in China. Any effort to build a copycat enterprise have therefore been unsuccessful.

Through an extensive study of a potential new market, Starbucks has perfected the art of localizing a globally recognized brand. A global brand does not have to mean uniform products. Instead, by catering to many different local tastes and preferences, the brand is strengthened and manages to gain a strong, long term foothold in each new market it approaches.


The key to success in a new market therefore seems to be in the correct understanding of what the market is and what the unmet needs are. This knowledge followed by a well-rounded and well researched strategy and action plan may be the difference between success and failure for a business.

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