New markets | Identification and selection
In order to grow as a company, business development is key. One route to take in order to grow a business is a new market entry. Entering a new market is an exciting step, which should be well prepared. Market entry can take place in multiple ways. When we take a food ingredient producer as an example, it is worth considering to enter a new geographical market withan existing ingredient, to enter a new application segment with an existing ingredient, to enter the market for a new ingredient or to enter a combination of mentioned markets. Before committing to a market entry, it is recommended to analyze the attractiveness of the new market and the ability of your company to compete in it. Let’s take a brief look into the market characteristics to take into account within this analysis.
Market characteristics to analyze when considering a new market entry:
- Market size: before entering a market, it is vital to know the size of the market in order to ensure you can make enough sales to do profitable business in the market. Also, examine the potential market for your product or service in order to substantiate your business plan.
- Market growth: market entry doesn’t happen overnight, and aims to build a profitable business in a market for the long term. It is imperative to take into account whether a market shrinks, stagnates or grows (and at what pace).
- Consumer trends: markets are driven by trends among consumers. Before entering a market, it is helpful to find out which trends are dominant and if your company has the competences to meet consumer needs. Or if it is feasible and worthwhile to develop such competences.
- Regulatory hurdles: regulations might differ across markets. Especially when entering a new geographical market, but also when entering new market segments, it is important to analyze your company’s ability to take on the required regulatory hurdles (import duties, taxes etc.).
- Competitive field: for every market you consider entering, it is important to have an overview of the competitive field. Is the playing field very consolidated or fragmented? Analyzing the competitors, their positions, strengths and weaknesses is crucial to determine whether your company has the right competences to be successful after the market entry.
Substantiating market entry decisions with data-driven market research
Hammer offers a complete package when it comes to substantiating a market entry decision. If you are considering to enter a new market, enquire how Hammer can assist you. We have a team experienced market analysts with a varied skillset able to collect and analyze market data on all characteristics mentioned above, and more. Besides analyzing a new market on all relevant characteristics, Hammer is always proactive in helping you think about other aspects of a market and in identifying potential market segments you might not have thought of yet. When partnering with Hammer for a market entry study, we will deliver actionable insights based on actual market data, which will enable you to make a substantiated market entry decision.
Is your company considering to enter a new market? Get in touch!