ABSTRACT
Chapter 4 applies the Operational Strategy framework to one common strategic decision: whether to enter a new market and, if so, with which products or services and at what price. A new market may be a new geographical region, a new product market, or a new application to the entrant or to the world. The strategy can relate to a totally new market or simply to an extension to the company’s geographical scope or product line. Whatever the type of new market entry, the eight-step approach remains fundamentally the same. First the objectives and degrees of freedom for entry are defined. Then the size of, respectively, the potential and accessible market is estimated. Next the strategic positioning options are defined, that is, the various types of products or services to be launched. Next the method explained in Chapter 3 is used to generate the distribution of willingness-to-pay and willingness-to-buy of a representative sample of potential customers for any possible offering at different price levels. From this analysis, the impact on total volumes (i.e., “demand”), revenues, market shares and margins is derived for any possible offering and price levels. Finally, the option that best meets the objectives is selected.
