Market entry strategy

Q2 2008

A sound market-entry strategy gives an operator greater control over

its market introduction and launch expectations, thereby ensuring
financial targets are met
Pressures faced by new entrants

A well-founded market-entry strategy minimises the uncertainties faced

by new entrants
Analysys Mason has developed a systematic approach to market-entry
strategies, allowing us to create well-supported and objective plans that
extract maximum value from internal assets and investment, and
ultimately increased competitiveness and secured revenue

Time constraints:

We have used this approach to:

decrease the financial uncertainty that derives from lack of

comprehensive market analysis and a structured strategic plan
initial business case assumptions need to be revisited to
better correspond with market conditions and chosen
market position

create launch efficiency by delivering a framework for

subsequent planning of tactical launch activities, coordinating
and prioritising tasks for launch team

enable risk management and market perception control through

contingency planning

Launch organisations face immense pressures on market entry, created

by internal and external expectations:

some of these pressures can be eased by developing a clear

and structured market-entry strategy and effective functional
plans

rapid deployment is crucial to avoid rise in market share cost and to

deliver predicted financial results

Resource limitations:

enable business plan collaboration and financial planning

Internal constraints
and expectations

core launch teams are often rapidly assembled, and specialist

expansion is done gradually, creating a large resource gap during
the implementation phase

Financial pressure:

as financial targets and expectations have been set prior to launch,

any unpredicted market activity and launch delays will disturb initial
customer take-up and revenue generation
External constraints
and expectations

Market data:

in many instances organisations lack in-depth understanding of

market drivers or have limited access to market data

Competition:

competitors will plan pre-emptive, disruptive action to improve their

own positions and secure their customer base prior to new entry

Analysys Masons structured approach to developing an entry

strategy begins with a comprehensive analysis of the market, based
on market data or tailored research
Market analysis

Our approach to developing a market-entry strategy follows a proven and

structured process, based on extensive industry experience and in-depth
understanding of all aspects that feed into a commercial launch

A comprehensive analysis, using market data and tailored market research,

allows us to assess all areas affecting the operators strategic direction:

market dynamics: detailed consumer and business market

segmentation and analysis of market drivers will be undertaken to
identify the most valuable target segments and underlying reasons for
market growth. Specific target areas are evaluated to provide key
inputs: retail structures, financial transactions systems and Internet
usage provide input to sales and distribution planning
competitive landscape: extensive competitive profiling in areas such
as positioning, brand, target segments, value proposition, market
offer, pricing, customer care, sales & distribution, coverage, network
& support systems enable assessment of competitors strengths and
weaknesses

macro-economic outlook: analysis of relevant macroeconomic data

determine market and segment growth

legislation and regulatory framework: description of limitations or

possibilities within the current regulatory environment that affect
market and segment growth

internal assets/technology: analysis of all internal assets including

technology, brand, partnerships will be done to clarify which
sustainable competitive advantages the company holds

An internal SWOT highlight areas of valid advantages and disadvantages,

providing input to market entry positioning and value proposition

Identification of strategic risk areas at an early stage enables preparation

of mitigating actions prior to market entry

Conclusions from the market analysis together with internal SWOT and
identified strategic risk areas form the basis for describing the market
opportunity

Market
dynamics

Macroeconomic
outlook

Competitive
landscape

Internal SWOT

Regulatory
environment

Internal
assets /
Technology

Identified strategic risk areas

Summary and conclusions

Market opportunity description

Market entry strategy
Vision and Mission
Objectives
Overall Strategy
Positioning
Value proposition
Brand
Target segments
Strategic directions
Pricing
Brand and communication
Sales and distribution
Tactical launch plan
Products & services
Pricing
Brand and
communication
Sales & distribution
channels
Customer service

Products and services

Customer service
Launch phasing
Contingency plan
Internal and external
factors

Analysys Masons overall market entry strategy statement and market

position clearly demonstrates which main directions are necessary to
reach market objectives

A description of the companys vision and mission statements as well as

financial objectives form the starting point for the market entry strategy as they
set the framework in which a new entrant will function

Short-term objectives, sales targets, market share and brand awareness, will be
set against the market opportunity and supplied as input to the business planning
team

Analysys Mason will develop an overall market entry strategy statement, clearly
demonstrating which main directions are necessary to reach stated objectives

The positioning statement visibly describes the companys strategy in relation to

competition and the value proposition captures the companys differentiating
advantages and their benefits to potential customers

Market analysis

Market
dynamics

Macroeconomic
outlook

Competitive
landscape

Internal SWOT

Regulatory
environment

Identified strategic risk areas

Summary and conclusions

Market opportunity description

Market position

Market entry strategy

Consumer
Company
A
Positioning values
Price

Company

Company
B

Price

NW/QoS

Service
Service
portfolio

Customer
service

Premium

Leader

Broad

Leader

Company C

Leader

Adequate

Narrow

Basic

Company A

Moderate

Adequate

Medium

Basic

Quality
Company B

Business

The brand strategy explains which values are important to communicate in order
to enhance the companys relationship with its customers

Targeted customer segments that need be addressed in order to deliver desired

objectives will be specified and prioritised

Strategic directions in all functional areas; products & services, pricing, brand &
communication, sales & distribution and customer service further detail the
overall entry strategy. Finally, the launch phasing section explores the various
viable market entry options, their pros, cons and pre-conditions

Internal
assets /
Technology

Vision and Mission

Objectives
Overall Strategy
Positioning
Value proposition
Brand
Target segments
Strategic directions
Pricing
Brand and communication
Sales and distribution
Tactical launch plan
Products & services
Pricing
Brand and
communication
Sales & distribution
channels
Customer service

Products and services

Customer service
Launch phasing
Contingency plan
Internal and external
factors

Detailed tactical launch plans enable efficient and controlled

implementation, leading to rapid market introduction
Market analysis

Strategic directions are further detailed into a tactical launch plan,

covering all functional areas. This provides the launch team and vendors
with necessary specifications for implementation and ensures that all
launch activities support the overall market entry strategy

A product & service roadmap will be developed by matching technical

capabilities and benefits with customer needs. The roadmap includes
detailed set of individual services or product packages at and post-launch

Pricing launch packages and separate services includes development of

complex price modelling and deployment of conjoint research to assist in
the choice of, from customer perspective, the most valuable pricing option
Brand and communication plan for market entry includes development
of brand wheel (attributes, benefits, values) and full launch campaign
planning

The development of a sales and distribution channel plan involves

creation of a tailor made sales and commission model, detailing of the
companys sales and distribution channel structure and analysis and
recommendation on commission structure and levels

The customer service plan includes high level customer service

processes and customer centre dimensioning

Clear contingency planning enables the company to pre-empt the

occurrence of situations that affect the planned activities and prepare plans
to remedy those, resulting in shortened reaction time. Both internal and
external factors will be analysed

Internal e.g. technical and organisational issues

External e.g. competitive market activities and regulatory actions

Market
dynamics

Macroeconomic
outlook

Competitive
landscape

Internal SWOT

Regulatory
environment

Internal
assets /
Technology

Identified strategic risk areas

Summary and conclusions

Market opportunity description

Market entry strategy
Vision and Mission
Objectives
Overall Strategy
Positioning
Value proposition
Brand
Target segments
Strategic directions
Pricing
Brand and communication
Sales and distribution
Tactical launch plan
Products & services
Pricing
Brand and
communication
Sales & distribution
channels
Customer service

Products and services

Customer service
Launch phasing
Contingency plan
Internal and external
factors

Structured and comprehensive planning and interaction with business

planning and technical teams enables coordinated effort, bringing
market entry success

The commercial market entry strategy must work in unison with business
planning and technical team to ensure a coordinated market entry
approach

Market entry strategy

and tactical launch plan

Business planning unit requires market input when developing

business plan and budgets

Positioning, price strategy, marketing investment and

coverage (in relation to competition) affect potential
market size and share

Segment uptake assumptions serve as input to market

share calculations

Development and deployment of network and support systems

need take commercial requirements into consideration and vice
versa

Technical possibilities and limitations are taken into

consideration when developing the market entry strategy

Market offer and customer approach produce

requirements for support system configuration

Business plan
and budget

Technical roadmap
and roll-out plan

In addition to market entry strategy development, Analysys Mason can

provide complete launch support and coordination of connected
business functions
Key issues

Launch management structure

Master Project Plan and Project Management Office

The overall project management office (PMO) coordinates the roles of different
teams to ensure that the management is fully updated of progress and potential
bottlenecks for action
The individual functions can be undertaken by the Analysys Mason consortium
or by client entities, with the objective of handing over the running of the
business to the client

Business Planning and Budgeting

Market entry
strategy and
execution
Product
roadmap
Tariffs
Advertising
Sales and
Distribution
Customer
service

Network
deployment

Vendor
interactions
Site acquisition
reporting
Installation
management

Regulatory
support

Interconnect
negotiation
support

Back-end
support

Customer care
Billing

Regulatory
lobbying
support

Organisational management
Source: Analysys Mason

Corporate and operational KPIs

Approach to overcome challenges

Launch support covers a range of activities that will enable the successful launch of the business in an aggressive timescale

Determining the exact role of different entities needs to be undertaken in an implementation planning phase that will balance the cost of external resources with the speed of
launch, based on intensive, short-term external team effort

Case study: Fourth entrant market entry strategy and detailed

launch plan
Business challenge

Our client had acquired a mobile license for Afghanistan, entering as the fourth operator in an extremely difficult market with regards to economic
and social structures, security issues, geographical accessibility and lack of reliable market information. Furthermore, our client did not have a
separate Programme Management Office (PMO) to oversee launch implementation, increasing the demand for a clear and structured market entry
strategy and subsequent tactical plans

Analysys Mason was hired to undertake development of a market entry strategy and detailed launch plan to steer the launch team and contracted
suppliers towards a successful market introduction. In parallel, Analysys Mason developed a long-term business plan and detailed operating model
/ budget

Approach

Developed a robust market entry strategy

Setting attainable sales objective, in liaison with the business plan
Determining durable positioning and value proposition

Developed detailed tactical plans for each functional area

Recommended segmented market offers for launch and postlaunch, having evaluated various options
Build a comprehensive price model and initiated market research to
evaluate tariff options
Developed complete sales and distribution channel structure
including modelling of commission structure and levels
Created a brand adapted to local market conditions and developed a
communication plan

Benefits and results

Analysys Mason produced a complete market entry strategy and detailed tactical
launch plans, allowing our client to formulate a clear and differentiated market
position with aligned market offering, pricing, communication, customer service
and sales & distribution structure. This enabled complete stakeholder buy-in and
efficient launch plan execution

Market position

Q1 Q6 objectives

Residential

Market share

Conducted a comprehensive market analysis

Subscribers (thousands)

Q1

Q2

Q3

Q4

Segment A

Q5

Quality

Price

Business

Q6

Segment B
Sales and distribution network

Market share
Market offer options
Type of approach

Large
distributors

Description

Segmented packages
P1

P2

Over the
counter
wholesale

Own
stores

Direct
sales force

Small
distributors
P3

P4
Points of
sale

Tailor -made approach

Base
One-size-fits-all
Unique product

Authorised
retailers

Residential
market

Business
market

Analysys Mason has assisted several new entrants worldwide in

developing their market entry strategies
Project focus

Client type

Key project results

Development of a mobile strategy

(including UMTS, CDMA 2000 and WiMAX
technologies)

North African alternative

fixed and mobile operator

Analysys Mason developed a robust strategy for entering the mobile market by developing alternative
service propositions and marketing strategies and analysing different technology options (UMTS, CDMA
2000 and WiMAX), roll-out approaches and handset strategies. Analysys Mason has also developed high
level financials for the various options in order to make a detailed recommendation. Our conclusions were
accepted by the Board and we were praised for our clear reasoning and innovative approach

Launch support

Asian wireless operator

Analysys Mason worked as part of a wider team to support the launch of a new mobile operator in a
developing Asian country. The task consisted of business planning, international connectivity assessment
and program management support

Assessment of a mobile entry strategy

offering limited mobility services

North African fixed

operator

Analysys Mason provided insight into successful market entry strategies employed by late mobile
entrants and examined markets and operator performances where spectrum obtained initially or
permanently constrained to offer limited mobility services

Development of a mobile business

strategy for a new entrant

Western European fixed

operator

Analysys Mason worked as part of a wider team which included the client's senior bid team, a technology
vendor and other parties. The client recognised that coming late into the market as a 3G operator, and
being one of numerous infrastructure-based operators in that country required an innovative approach to
the market. Analysys Mason produced a credible bid, financial model as well as a solid mobile business
strategy taking into account 3G technology, network planning, local planning and network build issues,
the local mobile market, product propositions and channels to market

Development of a strategy for the smaller

mobile operator in a market of four
operators as part of an acquisition process

Investment bank

Analysys Mason carried out a comprehensive market and technical due diligence, covering all elements
of the core business of the operator, including operations, technology, sales and marketing, information
technology systems and human resources. Analysys Mason developed a growth strategy for the
acquisition target, using the outputs of its due diligence, as well as those from the financial and legal
ones. On this basis, Analysys Mason built a business plan and subsequently contributed to the
preparation of the bid book