Entering a New Market

Briefly explain the ways of entering a market

The process of entering a market is a strategic decision that determines how a business will reach the target customers. There are different methods that a business can enter a new market. Many factors determine the entry strategy. Some of the key factors that influence the entry strategy include the nature of the product or service, the opportunities available, the target customers, and the resources. The entry to a new market can be through a new product. The establishment of a new product entails an invention that bridges a gap that may exist in the market. Thus, the strategy targets a population that is dissatisfied. This type of market entry is based on satisfying emotional products rather than rational products. Examples of products that fit into the category include mood jewelry and pet rocks.

In addition, market entry can be by selling an existing product to a new market segment. The product can be sold to a different group or exported to another country. Examples that fit into this market entry include direct export, franchising, and strategic partnership, online selling, and direct selling. Directs exports include selling products to a foreign country. The direct export can be conducted efficiently by setting a representative office in the target country or through strategic partnership.

The challenges related to this method of market entry are high export tariffs, exposure to new cultures, and dealing with foreign tax systems. The strategic partnership entails making an alliance with an established that already enjoys a substantial market share. The method helps a business to sell its products in the chosen market that could have been difficult to access without the support of the strategic partner. Examples of strategic partnerships are common in the airline industry and export businesses.

Why is it important to make adjustments in market potential and market share figures?

Market potential entails the demand response for a targeted group of customers in a defined geographic locality. The market potential is affected by different factors; thus, it is described in relation to time, competitive factors, and business environment. A business normally sets the upper market size in terms of sales. On the other hand, the market share is the percentage volume of sales that a company can make in a given market. The market share and market potential figures should be adjusted to align with the changing business environment.

The common factors that affect the operations of business include competitors, government policy, technological factors, and micro factors that may influence the operations of the business. These factors change with time. Therefore, it is important to adjust the figures in relation to the market area the business has achieved and the population in the given area. The adjustment helps in obtaining the actual statistics for the market and subsequently helps in adjusting the data that relates to the market.

The main advantage of making adjustments is to determine the real market patterns and hence draw strategies that will help the business to achieve its goals. The adjustments are made to reflect the competitive indicators and weaknesses that the business may have.

For a small business of your choice, show how you would evaluate non-quantitative factors such as goals, experience, lifestyle, and content of work.

The evaluation of non-quantitative factors such as goals experience, lifestyle, and content of work helps an individual to determine the suitability of the intended business, its potential, and its implication on the life of the owner. The small business is the sale of household furniture. The evaluation of goals will involve how the furniture business will help in achieving financial goals and social goals. Therefore, the assessment will be based on the amount of stock that can be moved and the profit expected from the stock. In relation to the content of the work, the evaluation will entail examining how the business will fit into my work schedule. This will involve the assessment of the required inputs such as the physical work and the interactions with the people in the industry.

Most small businesses are operated as part-time businesses. As a result, the time factor is very critical in the design of a business. This brings in the aspect of the lifestyle the business will allow. Thus, the evaluation will entail assessing the hours required to run the business, the involvement of the members of the family members and friends. Experience entails the individual’s ability to operate the business as per industry requirements. In relation to the furniture business, the evaluation will entail quantification of my prior experience in business and whether I have the capability to manage and coordinate the operations of the venture to meet the needs of my target customers.

The evaluation of the above non-quantitative factors will be through reflection. I will reflect on my capabilities, the current work situations, my past experiences and relate them to the operations of the furniture venture. In addition, the evaluation will be through a collection of information that pertains to the business and relating the information to the furniture business. The information to be used in the assessment will be collected through observation of trends in the business, conducting surveys, and collection of secondary data.