Strategic Management - Entry Strategies

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A market entry strategy is a planned distribution and delivery method of goods or services to a new target market. The import and export of benefits refer to creating, establishing, and managing contracts in a foreign country.

  • Pioneer: Create market through proactive R&D
  • Fast Imitator Strategy: Imitate Pioneer’s quick, highly competitive intelligence so that they can make it available at a low cost. 
  • Segmenter Business: Various segments in mature markets so the bargaining power of customers increases, customers become more specific in their demands and needs.: e.g., FMCG. There is no disruptive innovation possible: e.g., IOT enabled Mobiles (no further innovation possible). To serve more than one segment, firms need to bring in mass customization, design thinking, and modularity in design.
  • Me-too Business: Low-Cost Provider, Aggressive procurement operations, Value engineering (cost reduction). Manage high-volume operations with low-overhead Expenses: limited product lines, the leader in process innovation.

Industry Life Cycle

The Industry life cycle refers to the development of a business through four stages based on the business characteristics. It depicts the various stages through which the business operates within an industry. It is depicted in each step which is Embryonic, Growth, Shakeout, and Maturity stages.

  • Embryonic Stage: Buyers’ unfamiliarity with the industry’s product, High prices due to the inability of companies to reap any significant economies of scale, poorly developed distribution channels. Competition is low. A distribution channel is in the developing stage.
  • Growth Stage: increased 1st-time consumers, increased competition, low prices because of achieving economies of scale. At this stage, new entrants will be higher as they will also see the scope of growth. 
  • Shakeout Stage: demand approaches saturation levels, but the capacity of generation remains the same, so excess capacity is developed, the rivalry between companies can become intense. Hostile takeovers can occur.
  • Mature Stage: The market is saturated, and the demand is limited to replacement, and growth is low or zero. Barriers to entry increase, and the threat of entry from potential competitors decrease. 
  • Decline Stage: Growth becomes negative, falling demand leads to the emergence of excess capacity. Exit barriers play a part in adjusting excess capacity.