New Market Entry
Developing and executing new market entry plans
Executives constantly look at new market entry opportunities as a way to generate rapid growth, diversify their portfolios, and preempt competition—and, occasionally, secretly satisfy their entrepreneurial spirit. We have helped numerous clients expand their market reach, be it venturing into new geographies, serving new customer segments, or launching new products and services. We can help you too.
Measuring the risks and benefits of new market ventures can be a daunting task for valid reasons. There is no shortage of tales of flawed business cases and execution failures, but, by the same token, many organizations have enjoyed remarkable success by turning new market entry into the cornerstone of their growth strategies.
We adopt a fact-based, market-driven approach to help companies manage the challenges and exploit the potential of new market entry. Over the years, we have helped clients across a broad range of industries to address multiple strategic market entry questions, including:
- How good is the strategic fit of the new entry opportunities under consideration? How do they align with the overall strategic direction and business plan?
- What is the true size of a specific market entry opportunity? How fast is the market growing? Where is it in its lifecycle? How intense is the competition? How much of the market can we expect to capture? How profitable can this market be?
- What are the key determining factors of successful market entry? What investments are required? What other barriers would we need to overcome? How attractive is this opportunity given our goals, capabilities, constraints, and other available investment options?
- What is the appropriate timing of entry? Should we push to be first into a new market, or is there value in waiting to learn more about potential, risks, and challenges? Am I at a disadvantage if I am a late mover? How long should I wait?
- What mode of entry provides the best strategic fit (i.e., organic growth, acquisition, joint venture, or other forms of partnership)? If an incumbent is established in the new market we are contemplating, should we consider a direct attack, or seek a smaller niche position?
- Taking market potential, investment requirements, and known risks into account, how attractive is each target market? What is the project rate of return on investment and payback period?
In addition to providing advice on the merits of new market entry, Houlihan Lokey often remains involved throughout the process, helping clients develop and execute their new market entry plans.