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How can we mitigate the risk associated with new markets for an effective market entry

Market Entry in new arena or a new country with new product or re-launch is accompanied with certain risks on business. Some of the risks while entering new markets are anticipated and some unforeseen, we need to be geared up for both.

Risks can be mitigated not eliminated.
How can we mitigate the risk associated with new markets for an effective market entry
Risk Mitigation Techniques for Effective Market Entry:
Market Assessment
  • Market Research: It is must to know what will be our investment vs. returns, who is our competition, to find product differentiation, to get market overview, what are the trends and market needs, to find probable profits, know the market threats as well as rules to entry and exit the market.
  • Market Analysis: How attractive the market is in terms of size and age of market. What is the target audience and is there market saturation with similar products are there is scope for introducing your product. The market study may give you reasons to market research for gathering data, analyzing it and targeting the exact customer line.
  • Market Awareness: About the product, service, competition, updates, uptrends, laws, rules and regulations, taxes, calculating risks and mostly about the customer interest.

Based on the capabilities, product demand and extended reach via projections one needs to select not only the high valued customers but high volume customers from the regions of marketing spread out of your company.

Entry Strategy
  • Market Approach: It not only includes the business valuation methods but the strategies to commence and continue business over a period. The proof of concept and pilot projects or straight entry to market depends on how open and risk taking capacity the company has, if they plan to spend heavily on advertising or take market surveys before spending. Each approach they take will have a set of benefits and setbacks.
  • Setup:The market entry when well researched provides multiple openings for business enterprise in defining the structure of the company to shape up the future. It is sort of mandatory to create partnerships or joint ventures that magnetically pull the customers base of any selected industry. What you would achieve in years can be accomplished in months with right partners or business sharks.
  • Varied Pathways: Certainly the market entry and actions changes with the business vision for short term and long term goals which strategies company defines for leads and revenue generation, customer service, marketing and advertising etc. Same factors need different strategy eg. Short term revenue goal is say $60,000 which will be reinvested in marketing to beat the competition and the long term revenue goal is $500,000 in a year.
Legal and Regulatory Compliances

What are the requirements to be fulfilled prior to the company formation eg. any permissions, certifications that are compulsory; raising funds or acquiring loans and are the rates feasible; is the business and customer related data available and live.

Is there free entry to market or the country has concealed understanding of charges or authority, whether you can do business freely or are refrained of complete ownership of business in that country. Eg. Dubai does not allow citizens and companies of other countries to conduct business independently they compulsorily need a local person as business partner.

Sustainability

A major concern for new market entrants mainly due to existing competition and easily copyable product or service. The business enterprise needs to check the sustainability in beating the barriers, whether the challenge is facing cultural differences of a country, financial capacity and legal aspects, meeting business demands or customer expectations.

Readiness to tap the right audience at right time is result of market assessment. Market Assessment, Target Segmentation and Market Entry Strategy help in decision processes of businesses; to create plans, execute them and curtail the risk of failure.

The Market Approach, setup and pathway chosen are the results of calculated risks and techniques used to measure them and will entrust in the big bang approach.

Even huge companies do the sample testing or pilot to know the customers views and modify the product accordingly. The pilot gives you an overview of product’s demand, acceptance, market size, price range and more specifically improvement needed. Eg. P&G tested nearly 125 Tide washing powder ideas, sampling included distributing 1 million product samples.

The projects and businesses incur expenses intentionally for profit making, not that one shall fail if sample testing is not done but precautionary measures calls and is highly recommended by the experts.

Rising above the risk is the spirit of market rulers, "the business tycoons".