Market-Entry and Competition A Discussion of Strategies available to Entrepreneurs

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Market-Entry and Competition

A Discussion of Strategies available to Entrepreneurs

by Kai F. Mahnert, DBMK

Conducted for Ivan Mc Phillips, Lecturer in Enterprise Development, GMIT

Market-Entry Strategy

Market-entry strategy is the way the entrepreneur proposes to enter the market s/he has chosen for the new venture, be it an existing market or a completely new one (i.e. a new market for an existing product or a new product in the general market). Generally, all the activities involving the successful establishment of the new venture within the chosen market are co-ordinated and adapted to the market-entry strategy. The main activities concerned are:


2)Capital Investment and Scale Requirements

3)Product Life Cycle

4)Proprietary Protection

5)Market Structure and Competition

In particular the latter three points are of both obvious importance and uncertainty in the case of a newly developed product, especially if it is a stand-alone product (or service) that has never existed in this or a similar form before.

Here, forecasts by the entrepreneur have to be made solely on the grounds of personal estimation, as no precedent or guideline is available.

As regards the strategies themselves, they seem to correspond to a certain extent with the distinction made above. Depending on the type and size of market the entrepreneur wishes to target (which to an extent depends on the product or service offered by the new venture), s/he can employ a 'Niche' or 'Broad' Market-entry strategy.

Using a niche market-entry strategy is usually associated with some kind of geographical limitation facing the entrepreneur. At start-up, only few new ventures will be able to serve a market larger than the immediate geographical area the business is located in. In most cases, the business will start-up in the physical location of the targeted market segment, i.e. a new small business selling school...