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Market entry strategy

Q2 2008
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A sound market-entry strategy gives an operator greater control over
its market introduction and launch expectations, thereby ensuring
financial targets are met
l Pressures faced by new entrants
l A well-founded market-entry strategy minimises the uncertainties faced
by new entrants l
Internal constraints
and expectations
l Analysys Mason has developed a systematic approach to market-entry
strategies, allowing us to create well-supported and objective plans Time constraints:
that extract maximum value from internal assets and investment,
and ultimately increased competitiveness and secured revenue §rapid deployment is crucial to avoid rise in market share cost and to
l We have used this approach to: deliver predicted financial results

l decrease the financial uncertainty that derives from lack
of comprehensive market analysis and a structured
strategic plan
l enable business plan collaboration and financial
planning
l initial business case assumptions need
to be revisited to better correspond
with market conditions and chosen
market position
l create launch efficiency by delivering a framework for
subsequent planning of tactical launch activities,
coordinating and prioritising tasks for launch team
l enable risk management and market perception control
through contingency planning
l Launch organisations face immense pressures on market entry, created
by internal and external expectations:
l some of these pressures can be eased by developing a
clear and structured market-entry strategy and
effective functional plans
Resource limitations:
§core launch teams are often rapidly assembled, and specialist
expansion is done gradually, creating a large resource gap during
the implementation phase
Financial pressure:
§asfinancial 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:
§inmany 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
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Analysys Mason’s 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

l Macro- Internal
structured process, based on extensive industry experience and in-depth Market Competitive Regulatory
economic assets /
understanding of all aspects that feed into a commercial launch dynamics landscape environment
outlook Technology
A comprehensive analysis, using market data and tailored market research,
l
allows us to assess all areas affecting the operator’s strategic direction:
Internal SWOT Identified strategic risk areas
–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 Summary and conclusions
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 Market opportunity description
–competitive landscape: extensive competitive profiling in areas such as
positioning, brand, target segments, value proposition, market offer, Market entry strategy
pricing, customer care, sales & distribution, coverage, network &
support systems enable assessment of competitors’ strengths and Vision and Mission
weaknesses Objectives
–macro-economic outlook: analysis of relevant macroeconomic data Overall Strategy
determine market and segment growth Positioning
Value proposition
–legislation and regulatory framework: description of limitations or Brand
possibilities within the current regulatory environment that affect Target segments
market and segment growth
–internal assets/technology: analysis of all internal assets including Strategic directions
technology, brand, partnerships will be done to clarify which
sustainable competitive advantages the company holds Pricing Products and services
Brand and communication Customer service
An internal SWOT highlight areas of valid advantages and disadvantages,
l
Sales and distribution Launch phasing
providing input to market entry positioning and value proposition
Identification of strategic risk areas at an early stage enables preparation of
l Tactical launch plan Contingency plan
mitigating actions prior to market entry
Products & services
Conclusions from the market analysis together with internal SWOT and identified
l Pricing Internal and external
strategic risk areas form the basis for describing the market opportunity Brand and factors
communication
Sales & distribution
channels
Customer service
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Analysys Mason’s overall market entry strategy statement and
market position clearly demonstrates which main directions are
necessary to reach market objectives
Market analysis
l A description of the company’s vision and mission statements as well as financial
objectives form the starting point for the market entry strategy as they set the Macro- Internal
framework in which a new entrant will function Market Competitive Regulatory
economic assets /
dynamics landscape environment
l Short-term objectives, sales targets, market share and brand awareness, will be set outlook Technology
against the market opportunity and supplied as input to the business planning
team
Internal SWOT Identified strategic risk areas
l Analysys Mason will develop an overall market entry strategy statement, clearly
demonstrating which main directions are necessary to reach stated objectives
Summary and conclusions
l The positioning statement visibly describes the company’s strategy in relation to
competition and the value proposition captures the company’s differentiating
advantages and their benefits to potential customers Market opportunity description
l Market position

Consumer Market entry strategy

l

Vision and Mission

Company
l
A Objectives
Overall Strategy
l
Positioning
Positioning values
Company Company
Value proposition
Price
l Quality Service
Service Customer
C B Price NW/QoS
portfolio service Brand
l Company B Premium
Premium Leader
Leader Broad
Broad Leader
Leader Target segments
Company C Leader
Leader Adequate Narrow
Narrow Basic
Basic
l Strategic directions
Company A Moderate Adequate Medium
Medium Basic
Basic
Pricing Products and services
l Business
Brand and communication Customer service
l
Sales and distribution Launch phasing

l The brand strategy explains which values are important to communicate in order to Tactical launch plan Contingency plan
enhance the company’s relationship with its customers Products & services
Pricing Internal and external
l Targeted customer segments that need be addressed in order to deliver desired
objectives will be specified and prioritised Brand and factors
communication
l Strategic directions in all functional areas; products & services, pricing, brand & Sales & distribution
communication, sales & distribution and customer service further detail the channels
overall entry strategy. Finally, the launch phasing section explores the various Customer service
viable market entry options, their pro’s, con’s and pre-conditions
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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
l Macro- Internal
all functional areas. This provides the launch team and vendors with Market Competitive Regulatory
economic assets /
dynamics landscape environment
necessary specifications for implementation and ensures that all launch outlook Technology
activities support the overall market entry strategy

A product & service roadmap will be developed by matching technical

l Internal SWOT Identified strategic risk areas
capabilities and benefits with customer needs. The roadmap includes
detailed set of individual services or product packages at and post-launch Summary and conclusions
Pricing launch packages and separate services includes development of
l

complex price modelling and deployment of conjoint research to assist in Market opportunity description
the choice of, from customer perspective, the most valuable pricing option

Brand and communication plan for market entry includes development of

l
Market entry strategy
brand wheel (attributes, benefits, values) and full launch campaign
planning Vision and Mission
Objectives
The development of a sales and distribution channel plan involves creation
l Overall Strategy
of a tailor made sales and commission model, detailing of the company’s Positioning
sales and distribution channel structure and analysis and recommendation Value proposition
on commission structure and levels Brand
Target segments
The customer service plan includes high level customer service processes
l

and customer centre dimensioning Strategic directions

Pricing Products and services
Clear contingency planning enables the company to pre-empt the
l
Brand and communication Customer service
occurrence of situations that affect the planned activities and prepare plans
Sales and distribution Launch phasing
to remedy those, resulting in shortened reaction time. Both internal and
external factors will be analysed
Tactical launch plan Contingency plan
–Internal – e.g. technical and organisational issues Products & services
Pricing Internal and external
–External – e.g. competitive market activities and regulatory actions factors
Brand and
l communication
Sales & distribution
channels
Customer service
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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
l

planning and technical team to ensure a coordinated market entry

approach
Market entry strategy
–Business planning unit requires market input when developing and tactical launch plan
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 Business plan Technical roadmap
and budget and roll-out plan
–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
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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

The overall project management office (PMO) coordinates the roles of different Master Project Plan and Project Management Office
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
Business Planning and Budgeting
client entities, with the objective of handing over the running of the business to the
client
Market entry
Regulatory
strategy and Network
support Back-end
execution deployment
support
Product
Interconnect
roadmap Vendor
negotiation Customer care
Tariffs interactions
support Billing
Advertising Site acquisition
Regulatory •
Sales and reporting
lobbying
Distribution Installation
support
Customer management
•
service

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
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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
§Conducted a comprehensive market analysis Market position
Q1 – Q6 objectives
§Developed a robust market entry strategy Residential

–Setting attainable sales objective, in liaison with the business

plan

Subscribers (thousands)
–Determining durable positioning and value proposition

Market share
§Developed detailed tactical plans for each functional area Price Quality

–Recommended segmented market offers for launch and post-

launch, having evaluated various options
–Build a comprehensive price model and initiated market
research to evaluate tariff options Q1 Q2 Q3 Q4 Q5 Q6 Business

–Developed complete sales and distribution channel structure Segment A Segment B

Sales and distribution network
including modelling of commission structure and levels Market share

–Created a brand adapted to local market conditions and Market offer options
Large
Over the
Own Direct
developed a communication plan
Benefits and results Type of approach Description distributors
counter
wholesale
stores sales force

Segmented packages
§§Analysys Small
Mason produced a complete market entry strategy and detailed tactical P2
distributors
P4
launch plans, allowing our client to formulate a clear and differentiated market P1 P3

position with aligned market offering, pricing, communication, customer service Tailor- made approach Points of
sale
and sales & distribution structure. This enabled complete stakeholder buy-in and
Base
efficient launch plan execution Authorised Residential Business
retailers market market
One- size- fits-all

Unique product
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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 North African alternative Analysys Mason developed a robust strategy for entering the mobile market by developing alternative
UMTS, CDMA 2000 and WiMAX fixed and mobile operator service propositions and marketing strategies and analysing different technology options (UMTS, CDMA
technologies) 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 North African fixed operator Analysys Mason provided insight into successful market entry strategies employed by late mobile entrants
offering limited mobility services and examined markets and operator performances where spectrum obtained initially or permanently
constrained to offer limited mobility services

Development of a mobile business strategy Western European fixed Analysys Mason worked as part of a wider team which included the client's senior bid team, a technology
for a new entrant operator 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
Development of a strategy for the smaller Investment bank local mobile
Analysys market,
Mason product
carried out apropositions and channels
comprehensive market andto technical
market due diligence, covering all elements of
mobile operator in a market of four operators the core business of the operator, including operations, technology, sales and marketing, information
as part of an acquisition process 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