Entry into New Businesses Framework
Enter new markets
The Entry into New Businesses Framework involves a firm entering a new market through internal development or acquisition. The framework requires a firm to analyze the market conditions, assess competitors, and determine the best entry strategy.
- A firm must analyze market conditions before entering a new market.
- A firm must assess competitors and determine the best entry strategy.
- A firm must be willing to withstand marginal or negative short-term financial results.
- Analyze Market ConditionsAnalyze the market conditions and determine if the market is attractive.Pro tipUse market research and analysis to determine market conditions.WarningBe cautious of uncertain market conditions.
- Assess CompetitorsAssess the strengths and weaknesses of competitors and determine the best entry strategy.Pro tipUse competitor analysis to determine competitor strengths and weaknesses.WarningBe cautious of competitors with strong market positions.
- Determine Entry StrategyDetermine the best entry strategy, either through internal development or acquisition.Pro tipUse analysis of market conditions and competitors to determine the best entry strategy.WarningBe cautious of uncertain market conditions and competitor retaliation.
Georgia-Pacific
Georgia-Pacific is an example of a firm that entered a new market through acquisition.
OutcomeThe firm was able to gain a competitive advantage in the new market.
Insufficient Resources
A firm must have sufficient resources to enter a new market.
Uncertain Market Conditions
A firm must be cautious of uncertain market conditions when entering a new market.
The Entry into New Businesses Framework was developed by Michael E. Porter as a way for firms to enter new markets and gain a competitive advantage.
Source · BOOK
Competitive Strategy