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
Pressures faced by new entrants
 A well-founded market-entry strategy minimises the uncertainties faced
by new entrants Internal constraints
 Analysys Mason has developed a systematic approach to market-entry and expectations
strategies, allowing us to create well-supported and objective plans that Time constraints:
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
deliver predicted financial results
 We have used this approach to:
 decrease the financial uncertainty that derives from lack of Resource limitations:
comprehensive market analysis and a structured strategic plan  core launch teams are often rapidly assembled, and specialist
 enable business plan collaboration and financial planning expansion is done gradually, creating a large resource gap during
the implementation phase
 initial business case assumptions need to be revisited to
better correspond with market conditions and chosen Financial pressure:
market position
 as financial targets and expectations have been set prior to launch,
 create launch efficiency by delivering a framework for any unpredicted market activity and launch delays will disturb initial
subsequent planning of tactical launch activities, coordinating customer take-up and revenue generation
and prioritising tasks for launch team
 enable risk management and market perception control through
contingency planning External constraints
and expectations
 Launch organisations face immense pressures on market entry, created
by internal and external expectations: Market data:
 in many instances organisations lack in-depth understanding of
 some of these pressures can be eased by developing a clear
market drivers or have limited access to market data
and structured market-entry strategy and effective functional
plans 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 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,
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 for Summary and conclusions
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 Market entry strategy
offer, 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
possibilities within the current regulatory environment that affect Brand
market and segment growth Target segments
– 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,
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 Tactical launch plan Contingency plan
of mitigating actions prior to market entry
Products & services
 Conclusions from the market analysis together with internal SWOT and Pricing Internal and external
identified strategic risk areas form the basis for describing the market Brand and factors
opportunity 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
 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 Macro- Internal
set the framework in which a new entrant will function Market Competitive Regulatory
economic assets /
dynamics landscape environment
 Short-term objectives, sales targets, market share and brand awareness, will be outlook Technology
set against the market opportunity and supplied as input to the business planning
team
Internal SWOT Identified strategic risk areas
 Analysys Mason will develop an overall market entry strategy statement,
clearly demonstrating which main directions are necessary to reach stated
objectives Summary and conclusions
 The positioning statement visibly describes the company’s strategy in relation to
competition and the value proposition captures the company’s differentiating Market opportunity description
advantages and their benefits to potential customers
Market position

Consumer Market entry strategy

Vision and Mission
Company
A Objectives
Overall Strategy
Positioning values Positioning
Price Company Company Quality Service
Service Customer Value proposition
B Price NW/QoS
C portfolio service Brand
Company B Premium
Premium Leader
Leader Broad
Broad Leader
Leader Target segments
Company C Leader
Leader Adequate Narrow
Narrow Basic
Basic
Strategic directions
Company A Moderate Adequate Medium
Medium Basic
Basic
Pricing Products and services
Business
Brand and communication Customer service
Sales and distribution Launch phasing
 The brand strategy explains which values are important to communicate in order
to enhance the company’s relationship with its customers Tactical launch plan Contingency plan
 Targeted customer segments that need be addressed in order to deliver desired Products & services
objectives will be specified and prioritised Pricing Internal and external
 Strategic directions in all functional areas; products & services, pricing, brand & Brand and factors
communication, sales & distribution and customer service further detail the communication
overall entry strategy. Finally, the launch phasing section explores the various Sales & distribution
viable market entry options, their pro’s, con’s and pre-conditions channels
Customer service
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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, Macro- Internal
Market Competitive Regulatory
covering all functional areas. This provides the launch team and vendors economic assets /
dynamics landscape environment
with necessary specifications for implementation and ensures that all outlook Technology
launch activities support the overall market entry strategy
 A product & service roadmap will be developed by matching technical 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
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 Market entry strategy
of brand wheel (attributes, benefits, values) and full launch campaign
planning Vision and Mission
Objectives
 The development of a sales and distribution channel plan involves Overall Strategy
creation of a tailor made sales and commission model, detailing of the Positioning
company’s sales and distribution channel structure and analysis and Value proposition
recommendation on commission structure and levels Brand
Target segments
 The customer service plan includes high level customer service
processes and customer centre dimensioning Strategic directions
 Clear contingency planning enables the company to pre-empt the Pricing Products and services
occurrence of situations that affect the planned activities and prepare plans Brand and communication Customer service
to remedy those, resulting in shortened reaction time. Both internal and Sales and distribution Launch phasing
external factors will be analysed
Tactical launch plan Contingency plan
– Internal – e.g. technical and organisational issues Products & services
– External – e.g. competitive market activities and regulatory actions Pricing Internal and external
Brand and factors
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
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

Master Project Plan and Project Management Office

 The overall project management office (PMO) coordinates the roles of different
teams to ensure that the management is fully updated of progress and potential
bottlenecks for action Business Planning and Budgeting
 The individual functions can be undertaken by the Analysys Mason consortium
or by client entities, with the objective of handing over the running of the Market entry
strategy and Regulatory
business to the client Network Back-end
execution support
deployment support
Product
roadmap Interconnect
Vendor Customer care
Tariffs negotiation
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 Q1 – Q6 objectives Market position
 Developed a robust market entry strategy Residential

– Setting attainable sales objective, in liaison with the business plan

– Determining durable positioning and value proposition

Subscribers (thousands)

Market share
 Developed detailed tactical plans for each functional area
– Recommended segmented market offers for launch and post-launch, Price Quality

having evaluated various options

– Build a comprehensive price model and initiated market research to
evaluate tariff options
– Developed complete sales and distribution channel structure Business
Q1 Q2 Q3 Q4 Q5 Q6
including modelling of commission structure and levels
Segment A Segment B
– Created a brand adapted to local market conditions and developed a Market share Sales and distribution network

communication plan Market offer options

Over the
Large Own Direct
counter
Benefits and results Type of approach Description distributors
wholesale
stores sales force

Segmented packages
Small
 Analysys Mason produced a complete market entry strategy and detailed tactical P2
distributors
P1 P3 P4
launch plans, allowing our client to formulate a clear and differentiated market
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
retailers
Residential
market
Business
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
local mobile market, product propositions and channels to market

Development of a strategy for the smaller
mobile operator in a market of four operators
as part of an acquisition process
Investment bank Analysys Mason carried out a comprehensive market and technical due diligence, covering all elements of
the core business of the operator, including operations, technology, sales and marketing, information
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