A plan to expand into a new market or better penetrate your current market is a great way to increase sales of your line of products and services, or even an opportunity to launch a new one. However, it is important to approach this initiative strategically, in order to minimize the risks and to maximize the chances of success for your business.
Thanks to the 4 strategic marketing analysis tools that we will share in the rest of this article, you will be armed to develop a flawless market conquest plan with precise objectives. Here are our 4 tools to better penetrate your market.
1-? Porter’s five forces
Porter’s Five Forces were published by a professor of the same name who served at the prestigious Harvard Business School in the 1970s / 1980s. It is a strategic analysis system capable of helping companies understand the intensity of competition in a sector of activity, as well as its level of attractiveness and profitability.
It focuses on the external factors that are at play within a given market and the impact they can have on your planned expansion.
Here are Porter’s forces:
– Intra-sector competition
By focusing on the questions below, you can determine how competitive and profitable the market you are targeting is: what is the competitive landscape today? Who are the other market players? How does their price, target audience, brand and Honduras WhatsApp Number List product compare to yours? How easy is it for customers to switch from your competitor’s solution to your product or service?
– The threat of substitute products
The goal is to determine how easily your customers can find a substitute product. If there are cheaper and easier substitutes to buy, it can certainly weaken your marketing position .
So ask yourself the following questions: How many similar products or services are already on the market? What is their price? How easily can your customers find them?
– The bargaining power of clients
How much power do your customers have over you? They often have the ability to drive down prices and demand better quality products. In this case, you should ask yourself the following questions: How many large clients do you have? What is the size of their orders? Are they powerful enough to dictate terms to you? How much would it cost them to switch from your product or service to another brand?
– The threat of new entrants
You will also need to determine how easy it is for new players to enter the market you are targeting and start a business, with which you will be competing. If an industry is profitable and has few barriers to entry, new businesses can easily get established and pose a threat to you.
The Ansoff matrix
Companies use the Ansoff Matrix to analyze and plan growth marketing strategies and understand the associated risks. According to this matrix, there are two approaches to building a growth marketing strategy:
Variations in what is sold (product growth)
Variations on the buyer (market growth)
As a result, this matrix created in 1957 by a mathematician named Ansoff offers four strategic options that present different levels of risk:
– Market penetration
This strategic option focuses on the sale of existing products within the market in which the company is currently operating. This is the one with the lowest risk because the company already knows its customers and has well-established channels to reach them. In this configuration, for example, the company can lower its prices and offer discounts to attract customers.
– Product development
In this case, the company will decide to develop new products for its existing market. For this to work, the company must be backed by extensive research and deliver innovative solutions to meet customer needs.
The BCG matrix
The BCG or BCG Growth Share Matrix was created in 1968 by the founder of the Boston Consulting Group. Like Ansoff’s matrix, it comes in the form of a diagram made up of four quadrants, but it mainly focuses on the relationship between two data: growth rate and market share, in order to help companies to identify potential profitability opportunities from various expansion opportunities.
Here are the four potential market categories defined by the BCG matrix:
– Star (significant market share and strong growth)
The products that belong to this category have rapid growth rate and dominant market share. They generate a lot of cash and require a lot of investment to ensure that they maintain their dominant position against the competition. If they manage to maintain their elevated position, they will eventually become “cash cows”.
– Cash cow, translated into French as “milking cow” (high market share and low growth)
These are the most profitable products. They are inexpensive to the business and generate significant income. A smart company policy is to invest the money they generate in “Star” products to help them sell more.
The MARACA Strategic Analysis Framework is a model used by HubSpot to assess opportunities for expansion in global markets. It focuses on three factors:
– Market availability
This involves making a study of the size of the market in relation to other areas, markets or countries, and estimating the number of potential customers and the revenues that could be generated there.
– Real-time Analysis:
This step should show how your business is currently performing in a given market relative to your main markets. And if you already have some business momentum within this area, you may consider increasing your investments, including communications and marketing.
– Respond to customer needs (Customer “Addressability”):
It is essential to know how well your business will be able to meet the specific needs of this market. Understanding the fit between your current offerings and a new market will give you an idea of the investment that will be required to subsequently achieve a perfect.