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Market entry framework: how consultants evaluate new ...
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Every place a page here uses this source, in the order the words come in it.
Here they are, in roughly the order you should work through them: “1. Is this market attractive? What’s the size, growth rate, and profitability structure? Who makes money here, and why?” 2. Can we win? Given our capabilities, assets, and brand, do we have a realistic competitive advantage in this market, or are we just another entrant?
4. Do the numbers work? What’s the investment required, the realistic revenue ramp, and the expected return? Does this clear our internal hurdle rate given the risk? “Most market entry disasters happen because a company got excited about Question 1 (big market, fast growing) and skipped Questions 2 through 4 entirely.” Question 1: is this market attractive?
Formulate an initial hypothesis. Based on what you know before the deep analysis, what do you think the answer is? This is the standard McKinsey approach: form a hypothesis early, then test it rigorously with data. It’s more efficient than open-ended research because it focuses the team on the specific facts that would confirm or disconfirm the entry decision. “Customer interviews in the target market, competitor analysis, financial modeling, regulatory research.” Pressure test. What would have to be true for this market entry to succeed? List those conditions explicitly, then evaluate the probability of each one. If the entry only works if you win 15% market share in two years and the incumbent doesn’t respond and the regulatory environment stays favorable, you’ve identified a fragile plan.
How to think about it “The data is incomplete. The internal politics are real. The CEO has a strong opinion before the analysis starts.” The framework above won’t eliminate any of that. What it will do is force the conversation into the right structure. When someone says “we should enter the Indian market,” you can respond with the right questions: Is the market attractive for our specific business? Do we have a realistic right to win? How would we enter? And do the numbers work on realistic assumptions?