Consulting Consulting
Consulting Finance General
Login Sign up for free Sign up for free
Consulting Finance General
Community
Meeting Board
Consulting Q&A
Interview Partner
Premium Membership
Coaching
Coaches
Coaching Packages
Consulting Q&A
Resources
Case Interview Basics
Case Library
AI Casebot
Tests & Guides
Mental Math Tool
Stress Questions
Drills
Video Tutorials
Brainteaser
Career
Employers
Career Events
Consulting Jobs
Consulting Blog
Sign up for free
Login
Community
Meeting Board
Consulting Q&A
Interview Partner
Premium Membership
Coaching
Coaches
Coaching Packages
Consulting Q&A
Resources
Case Interview Basics
Case Library
AI Casebot
Tests & Guides
Mental Math Tool
Stress Questions
Drills
Video Tutorials
Brainteaser
Career
Employers
Career Events
Consulting Jobs
Consulting Blog
Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Interview Partners to connect and practice with!
Meeting Board
Consulting Q&A
Interview Partner
Premium Membership
Back to overview
Aditya
on Jul 25, 2017
Global
I want to receive updates regarding this question via email.

New Market Entry: how to decide which market based on size and competition?

In cases where the client is considering entering a new market and needs to decide which market to enter, what are the key considerations? If I have a list of potential markets with their size and competitive landscape, how do I find the most suitable one to enter?

2
6.0k
5
Write an answer
Be the first to answer!
Nobody has responded to this question yet.
Top answer
Francesco
Coach
edited on Jul 25, 2017
#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success: ➡ interviewoffers.com | Ex BCG | 10Y+ Coaching

Hi Aditya,

having to decide which market to enter, this is what I would consider:

1) Goal clarification. It is always good to start with the end in mind – thus what is the specific reason why you want to enter the market? Is it revenues, profits or specific synergies?

2) Industry. There are two macrovariables here.

  • Key industry numbers/facts. This includes
    • Growth
    • Size
    • Barriers to entry
  • Key industry players. This includes:
    • Customers
    • Competition
    • Occasionally for some cases: suppliers and substitutes.

Here you should compare the different industries and understand which is the one fitting more with your goal. Eg, if your goal were to increase revenues, then an industry with high growth and size with low competition would be your target. If your goal is to generate synergies with your current product, customer fit would be more important. You could then eliminate those industries that clearly would not fit with your client objective and move with the remaining to the next step.

3) Company - Target objective feasibility. Here you want to check the fit between the client and the selected industries.

  • Can our specific client reach its objective in the selected market (this includes understanding its capabilities)?
  • Are there positive or negative synergies in such industry?

Here you want to test the feasibility for our client to achieve a specific target in an industry. Say that in your final selection you have Industry A with size of 10 and growth rate of 5% and Industry B with size of 8 and growth rate of 4% - all the rest being the same - and your goal is to maximize revenues. If your specific client has enough synergies in Industry B, it could find better to enter such an industry, as the synergies could prove to be superior to the higher growth and size of Industry A; of course, that should be verified, ideally with quantification of the relevant numbers.

Hope this helps,

Francesco

5
Contact coach
2 comments
Aditya
on Jul 26, 2017
So our client is a $100M clothing company that makes clothes for hunters. It is now wants to enter new market and has three options to choose. Which one should it go for: (1) Military Uniforms( size=$300M, Total 40 players with top 4 having 67% of market share). (2) Boots (Market Size= $200M. Total 30 players with top 4 having 65% market share). (3) Bagpacks(Market Size- $100M, 15 players with top 5 having 72% market share).
Francesco
Coach
on Jul 27, 2017
#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success: ➡ interviewoffers.com | Ex BCG | 10Y+ Coaching
Hi Aditya, I have provided an answer at the following link: https://www.preplounge.com/en/consulting-forum/which-market-to-enter-745
Vlad
Coach
on Jul 25, 2017
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi Aditya,

Let me add more details. I would look at the following things across these markets (sorted by priority):

Market

  • Size
  • Growth rates
  • Profitability
  • Segments
  • Distribution channels
  • Bereers (mainly regulation)

Competition

  • Market shares of competitors and their segments (see the next point)
  • Concentration / fragmentation (Fragmented market with lots of small players is less mature and easier to enter fom a scratch. Concentrated market is hard to enter but has potential acquisition targets)
  • Unit econmics of the players (Margins, relative cost position)
  • Key capabilities of the players (e.g. suppliers, assets, IP, etc)
  • Previos / projected entrants

Company 

  • Unit economics (Margins, costs) in current or target markets
  • Brand
  • Product mix
  • Key capabilities

Opportunities to enter - a bucket sumarizing:

  • Time to enter
  • Branding (Do we keep an existing brand / do sub brand if it is the new segment or create a new brand?)
  • Existance of acquisition / liscencing / JV targets if relevant
  • Cost and benefits

Good luck!

1
Contact coach
3 comments
Aditya
on Jul 26, 2017
thanks
Aditya
on Jul 26, 2017
So our client is a $100M clothing company that makes clothes for hunters. It is now wants to enter new market and has three options to choose. Which one should it go for: (1) Military Uniforms( size=$300M, Total 40 players with top 4 having 67% of market share). (2) Boots (Market Size= $200M. Total 30 players with top 4 having 65% market share). (3) Bagpacks(Market Size- $100M, 15 players with top 5 having 72% market share).
Vlad
Coach
on Jul 27, 2017
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School
Hi Aditya, I have answered in your separate topic
Sign up for free to read all answers.
Sign up for free to read all answers.
Yes, I would like to be informed about new content, exciting jobs, relevant events, and selected employers.
By creating an account, I confirm that I agree to PrepLounge's Terms of Use. Please read our Privacy Policy.
Sign up with
You already have an account? Log in here.
Similar Questions
Consulting
I got a take-home case from a company. It is so generic. How should I approach this?
on Sep 28, 2024
Global
6
2.0k
Top answer by
Florian
Coach
1400 5-star reviews across platforms | 600+ offers | Highest-rated case book on Amazon | Uni lecturer in US, Asia, EU
58
6 Answers
2.0k Views
+3
Consulting
CDD/Private Equity Interviews
on Jul 13, 2024
Global
2
10.3k
Top answer by
Pedro
Coach
Bain | EY-Parthenon | Former Principal | 1.5h session | 30% discount 1st session
474
2 Answers
10.3k Views
Consulting
How would you approach this market entry case
on Nov 30, 2024
Global
4
800+
Top answer by
Hagen
Coach
#1 recommended coach | >95% success rate | 8+ years consulting, 8+ years coaching and 7+ years interviewing experience
66
4 Answers
800+ Views
+1
Top Answer by
Francesco
Coach
#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success: ➡ interviewoffers.com | Ex BCG | 10Y+ Coaching
To coach profile
Related Article
Market Entry
Market entry cases are one of the key issues in the consulting industry and present consultants and firms with unique challenges and opportunities. These cases require deep analysis and strategic planning to successfully enter new markets. Variants of Market Entry CasesMarket entry cases in consulting involve analyzing and developing strategies for a company’s entry into a new market. This includes analyzing the market potential, understanding the competitive landscape and assessing the risks and opportunities. The goal is to recommend the best approach for the company to successfully enter and succeed in the new market.Market entry cases have two variants:Market development: This involves introducing an existing product or service into a new market where the company currently does not operate. This strategy focuses on finding new market opportunities, understanding the local market, adapting the product or service to fit the new market, and using effective marketing and distribution methods to succeed in the new market.Diversification: Diversification takes place when a company introduces a completely new product or service into a new market. It is different from market development because it involves offering products/services that may be unrelated to the company’s current products or target markets.Market entry cases are often hidden in other case types, such as growth or profitability cases. For example, if you are confronted with a scenario in your case interview such as, “Our business model is currently stagnating. What should we do?”, it is imperative to consider various strategic options, including market development or diversification, to revitalize the business and drive sustainable growth. Use the Following Six Steps to Approach a Market Entry CaseBy following these six steps, you can systematically approach market entry cases, conduct a deep analysis and develop strategic recommendations tailored to the client’s objectives and the market. These steps serve as a guideline, but always remember to adapt your recommendations specifically to the company’s case and situation.1. Paraphrase and Clarify the Objective of the Case at the Beginning.This first step lays the foundation for the analysis and guarantees that the customer’s expectations are met. In this first stage, it is particularly important that you understand the reasons and background as to why the company wants to enter a new market, whether a market development strategy or a diversification strategy is to be followed and what challenges are involved.So, when the interviewer presents the case to you, make sure you listen carefully and take detailed notes. Start with paraphrasing the problem and clarify all questions with the interviewer to make sure you understand the problem correctly. Take a minute to structure your thoughts and decide what questions to ask based on the structure. Frameworks such as Porter's Five Forces can help you structure thoughts and systematically identify key information. But always make sure to adapt standard frameworks to the individual circumstances of the case.2. Understand the Client's Company.Gain a deep understanding of the client’s business, including its core competencies, products or services, market position and competitive advantages. Understand why the client wants to enter the new market and identify the key issue. Knowing this information will be important in giving a final recommendation.Important information to determine if the company is ready to enter the target market are:What are current revenue streams?What are the client's key strengths, weaknesses, opportunities and threats? (SWOT-Analysis)What is the product mix? How many and what types of product lines, brands, variations of products does the company have? What is the lifecycle of each product? Also, how closely related are the current products?Who are current customers, and how are they segmented?What are the current distribution channels?What is the client's current financial situation?3. Understand the Market of Interest.Understand the market the client wants to enter and evaluate its attractiveness. Using a structured approach, you can gain a deep understanding of the market, identify opportunities and risks, and develop strategic recommendations tailored to your client's needs. To analyze the new market, the following steps may be a useful guideline:Estimate the Market Size: If available, start by estimating the market size if that information is available. If not, be prepared to calculate the market size yourself in such cases.Evaluate the Growth Rate: What is the growth rate of the market? Is it expanding rapidly, stable or shrinking?Determine the Lifecycle Stage: At what stage of the lifecycle is the market? Emerging, Mature, Declining?Identify Customer Segments: Who are the customers in this market? What are their specific needs and preferences?Understand the Competitive Environment: Who are the key players in the market? What makes them stand out? What are their differentiating factors? Porter’s Five Forces can help you to analyze the competitive environment and the attractiveness of a market in a case study.Analyze Industry Trends and KeyTechnologies: What are current trends in the industry and the market? For example, are there movements towards digital solutions or sustainability? Is there any significant technology driving this market? How quickly is it changing?4. Evaluate the Financial Aspects of a Potential Market Entry.In this fourth step, analyze and evaluate the financial impact of entering the target market. By structuring the analysis into costs, revenue potentials, and rate of return, you can provide a comprehensive and organized approach to assessing market entry strategies. This detailed breakdown will help in identifying key financial factors and making informed strategic decisions:Costs:Barriers to Market Entry:Investment Costs: Identify initial capital required for market entry.Fixed Costs:Infrastructure costs: Costs associated with setting up a physical or digital infrastructure.Personnel Costs: All expenses that a company has for its employees.Variable Costs:Production Costs: Costs that vary with the level of production.Operating Costs: Daily operating costs, including utilities and operating resources.Revenue Potential:Product Pricing:Expected Pricing: Determine the expected sales price of the product or service you want to offer in the new market.Sales Volume:Expected Units Sold: Estimate the number of units expected to be sold within a specific time period.Rate of Return and Break-Even-AnalysisBreak-Even Point:Time to Break-Even: Calculate the number of years required for the clients to recover the initial investment and start generating profit.Rate of Return:Understand that money has a different value over time: Evaluate the net present value (NPV) to determine how the changing value of money impacts the investment’s profitability.Rate of Return Calculation: Evaluate the expected profitability of the investment, taking into account both the initial costs and the future revenue streams.5. Develop a Strategy for Entering the Market.If you decide that entering a new market is a good idea, it is important to develop a strategy for how to proceed. There are generally three ways to enter a market:Starting from Scratch: Independently establishing a business in the new market.Through a Joint Venture: Partnering with a local company to enter the new market together.Through Mergers and Acquisitions (M&A): Taking over an existing company or business in the target market.By considering these following factors and matching them to the company’s specific goals and circumstances, a well-grounded market entry strategy can be developed for successful entry into a new market:Competitive Advantage: Can you apply the same business strategy as in your current market, or do you need to adapt the product, marketing, or even sales channels to reach customers?Timing: Can you use a first-mover advantage, or would you rather let the competitors try their luck first?Speed of Entry: Define whether you want to test a single store or region, or cover the entire market at once.Entry Mode: How much commitment do you want to make? Would it be a simple export strategy, where you can exit easily but have less control, OR a 100% subsidy, where investment costs are high but you also have more control?Organizational Structure of the New Branch: Do you want to decide centrally or give the individual country manager a lot of freedom?6. Develop a Recommendation.Now that you know the company, the“old” and the "new" market, have successfully done all the analyses and got your answers, summarize them and give a recommendation based on the facts you collected. Don't forget to take another minute to structure your answer but make sure to provide your answer first and then the reasons! Use the Pyramid Principle to formulate a conclusion and appropriate well-grounded recommendations at the end of the interview. Key Takeaways – What to Consider when Solving a Market Entry CaseMarket entry cases are often hidden in other case types, such as growth cases or profitability cases.It is important to gain a deep understanding of the client’s business and the market the client wants to enter and evaluate its attractiveness.Analyze and identify the most important financial factors before developing a potential market entry strategy.When developing a market entry strategy, tailor it to the company's unique characteristics and objectives.Make sure that you present a well-grounded market entry strategy.Practice makes perfect: Connect with case interview partners and practice together. You'll get valuable feedback and improve your skills much faster than if you just study on your own. Find numerous case partners on our interactive Meeting Board and get started right away! 
View article
Related Product
GYM Program - 5 Sessions
5.0
148 reviews
USD 6,737
USD 3,799
More information
Related Case
Expert case by
Ian
Based on Bain 1st Round Case (2023): Last Mile Delivery
5.0
4.0k times solved
Advanced
Interviewer-led
Open case
Similar Questions
Consulting
I got a take-home case from a company. It is so generic. How should I approach this?
on Sep 28, 2024
58
6
2.0k
Consulting
CDD/Private Equity Interviews
on Jul 13, 2024
474
2
10.3k
Consulting
How would you approach this market entry case
on Nov 30, 2024
66
4
800+
Everything for Your Career
  • Interview Coaching
  • Q&A
  • Interview Partner
  • Mental Math Tool
  • Interview Drills
  • Stress Questions
  • Blog
Everything for Your Career
  • Interview Coaching
  • Q&A
  • Interview Partner
  • Mental Math Tool
  • Interview Drills
  • Stress Questions
  • Blog
Popular in Consulting
  • Case Library
  • Meeting Board
  • Case Partner
  • Case Interview Basics
  • Case Interview
  • Consulting Q&A
Popular in Finance
  • Finance Q&A
  • Interview in Investment Banking
  • Investment Banking Salaries
Popular in Consulting
  • Case Library
  • Meeting Board
  • Case Partner
  • Case Interview Basics
  • Case Interview
  • Consulting Q&A
Popular in Finance
  • Finance Q&A
  • Interview in Investment Banking
  • Investment Banking Salaries
Consulting and Finance Employers
  • RWE Consulting
  • Whiteshield Advisory
  • All Employers »
About PrepLounge
  • For Companies
  • For Universities
  • For Coaches
  • About Us
  • Career
  • FAQ
© 2012 PrepLounge
Our servers are powered by electricity from renewable sources.
  • Cookies & Privacy
  • Terms & Conditions
  • Imprint
  • Sitemap
  • Contact
How likely are you to recommend us to a friend or fellow student?
0
1
2
3
4
5
6
7
8
9
10
0 = Not likely
10 = Very likely
Submit feedback
Thanks for your feedback! Your opinion helps us make PrepLounge even better.
Close Close and keep on prepping
Want to leave already?
After your registration you have free access to:
12 mock interviews with peers
360.000+ peers in our community
36 exercises (incl. structuring drills, mental math, brainteasers and more)
Video tutorials
Video case solutions
Sign up for free
Questions or Feedback?
Select category
  • Select category
  • General Feedback
  • Case Interview Preparation
  • Coaching
  • Technical Problems
  • Other
Your name
Your email address
Cancel