issue no.4 september 2015 19
Introduction
B
usinesses go through cycles, one of which is to ‘look over the hedge’ at other markets and wonder ‘what if?’ If a product or service is going well in a company’s home market then perhaps it is time to ‘test the waters’ and see if the product or service is also suitable for another market, be it in a different town, a different state, or a different country.
still often used tool is Porter’s Competitive Analysis or Strategy.1
to lives saved, and in business it may save a lot of money not to mention reputation from a failed venture. Leaders should understand the competitive nature of the market they are entering. A classic and
Entities may know their own market but need to gather information before making the crucial decision to expand into other markets.
Treat of new entrants
However, even if two countries have similar political systems and language, there is homework to be done before committing time and money to the decision.
Data Before Decision Expanding into foreign markets is an expensive exercise that should only be entertained if organisations have all the data needed to make an informed decision.
Bargaining power of suppliers
Rivalry among existing competitors
A maxim from the military, which is also applicable in business, is: “The time spent on reconnaissance is never wasted”. Whether in the military or business, gathering as much relevant data before deciding on the appropriate action is a fundamental principle of success – in the military it may lead 1
Threat of substitute products or services
Source: Michael Porter “Competitive Strategy” 1980.
http://business-fundas.com/2011/michael-porters-5-forces-model
Bargaining power of buyers