The Dynamic Duo: Market Entry Strategy & Go-to-Market Strategy
Why do some businesses seem to excel in new markets, while others stumble? The answer often lies in their mastery and use of Market Entry and Go-to-Market strategies.
In the realm of business strategy, the terms "Market Entry " and "Go-to-Market" strategy frequently pop-up and often used interchangeably. However, they are two distinct building blocks of your business’s strategy, and both are key ingredients in the recipe of market entry success.
Through our experience, we’ve observed that businesses often face difficulties when entering a new market, due to a limited understanding of their target market, who they’re selling to, and how to sell to them. It is the Market Entry and Go-to-Market strategies that help close this knowledge gap and enable effective management decision-making.
For enterprises aiming to launch in a new market, the temptation to dive straight into building and "doing" can be strong. We get that, the landing phase is exciting, and teams often feel pressure from leaders or investors to show traction on the ground.
However, having a clear understanding of the differences of these two strategies, the significance of doing both, and most importantly, gaining target customer feedback will ultimately generate significantly higher returns on investments of time and money.
An example of this is a B2B SaaS client, who was led by a team of high achievers who had successfully attained market dominance in their home territory. Their initial strategy for expanding overseas was to replicate the approach of their home market. So, they onboarded a sales partner and waited for orders to roll in. Unfortunately, things didn't unfold as planned. The new market was larger, more mature, included fourteen established competitors, was commercially sensitive, had different user expectations and buying processes.
After sixteen months with limited return, it was time to re-evaluate their approach. By creating a well-developed Market Entry Strategy and a Go-to-Market strategy, they were able to identify specific challenges and adapt their proposition, positioning, commercial strategy and tactics for gaining market share. As a result, they are now achieving the traction which was previously elusive.
When it comes to strategy, at Tarralugo, we emphasize the need to adopt an agile mindset and prioritize “the right planning today, to conquer tomorrow”.
“the right planning today, to conquer tomorrow.”
We emphasise “right”, because planning should always be sized according to the needs of your business. Established brands with lower risk appetites may require higher thresholds of proof about market opportunities & therefore perform greater due diligence, whereas a dexterous entrepreneurial category creator may take a more iterative approach to their market entry strategy. Both are correct, but both still need considered planning.
So, whether you're an established enterprise divesting a non-core product, a scaling start-up, or a business entering new geographies, the same foundational principles apply. Developing and implementing both your Market Entry and Go-to-Market strategies will be a significant step towards maximizing the impact of your resources and achieving your objectives.
In this article, we share:
Definitions of the two strategies
What components each strategy typically contains
How to use them
Definitions
Market Entry Strategy
A market entry strategy is a comprehensive plan that outlines how a company will enter a new market, either by expanding its offerings or venturing into a new geographical region. It encompasses a thorough analysis of the target market, competitors, regulations, and potential entry modes to ensure a successful and efficient entry, minimising risks and optimising resource deployment.
Go-to-Market Strategy
A go-to-market strategy is a tactical approach that outlines how a company will launch and promote a new product or service within a specific market. It combines marketing, sales, distribution, and customer support activities to effectively reach the target audience, generate demand, and drive revenue.
What they tYPICALLY contain
Market Entry Strategy
The market entry strategy serves as a blueprint for organizations seeking to enter new markets, providing a framework for informed decision-making and optimal resource allocation. An effective strategy allows businesses to jump into new markets with confidence, minimize risks, and maximize return on investment. A market entry strategy typically incorporates the following:
Market Research: An analysis of the target market, focusing on its size, growth potential, and consumer behaviour. This data equips businesses with a clear understanding of market dynamics, enabling them to tailor their strategies accordingly. A critical aspect of this process is actively listening to the target customers to ensure their needs, preferences and price sensitivity are adequately addressed by your proposition.
Understanding the Competition: Gain valuable insights into competitors' strengths, weaknesses, and market share. Leverage this intelligence to develop a differentiated strategy that sets your organization apart from the competition and fosters a sustainable competitive advantage. This should include insights into their pricing strategy and models.
Regulatory Environment: Before making your debut, examine local laws and regulations before entering the market. By proactively addressing regulatory, compliance and legal issues, businesses can avoid potential fines or challenges that might impede their market entry.
Timing and Entry Mode: Carefully consider the most advantageous timing for market entry and select the entry mode best suited to the organization's goals, such as partnerships, joint ventures, or direct investment.
Go-to-Market Strategy
Next up is the go-to-market strategy – a masterful mix of marketing, sales, distribution, and customer support that you employ to launch a new product or service. The key elements of a go-to-market strategy may include:
Target Market Definition: Clearly identify the ideal customer profile and understand their needs, challenges, and preferences.
Product or Service Positioning: Define the unique value proposition of the product or service and differentiate it from competitors.
Commercial Strategy: Develop a pricing strategy & model that reflects the product's value and appeals to the target audience.
Distribution Channels: Select the appropriate channels to reach and engage with the target audience, such as online platforms, retail stores, or strategic partnerships.
Marketing Plan: Design a comprehensive marketing strategy that includes messaging, branding, promotional activities, and lead generation tactics.
Sales Strategy: Outline the sales process, including the sales funnel, key performance indicators (KPIs), and enablement materials.
Customer Support: Provide exceptional customer service and support to ensure a positive experience and build brand loyalty.
Measurement and Optimization: Monitor and analyze the strategy's performance, making data-driven adjustments as needed.
How to Use them
The Market Entry Strategy is done first and can be used by the leadership to answer the fundamental question of, is this the right investment of our stakeholders time and money.
And sometimes it is perfectly OK, at the end of the Market Entry Strategy phase to decide not to go ahead. Some of the best decisions we have been involved in, is when the right decisions are made in good time, such as deciding a specific market is not suitable. This allows the deployment of capital and time where they can achieve the greatest return.
If there is a green light from after the Market Entry phase, the go-to-market strategy is then about how to execute that and maximise success.
Though Market Entry and Go-to-Market strategies are connected, they serve unique purposes. A market entry strategy acts as a guide for entering a new market, while a go-to-market strategy focuses on launching a particular product or service within that market.
Finding the right balance between under- and over-planning is crucial when developing these strategies, enabling your organization to move quickly while effectively managing risk. As a business leader, mastering both strategies is essential for maintaining a competitive edge and ensuring your business's continued success. Always remember to tailor these strategies to your organization's unique needs.
Ready to make your mark in new markets? Let's craft a bold and customized market entry and go-to-market strategy that maximizes your opportunity for success. Contact us today to start your expansion journey.
