This playbook leads to a robust recommendation in five steps.
Step 1: Clarify the goal and the question
Guiding questions:
- What does the client want to achieve with the market entry: growth, diversification, following customers?
- Which market exactly are we talking about: country, industry, customer segment, product?
- How is success measured, e.g. revenue target, market share, time frame, maximum investment?
- What strengths does the company bring, and what does it lack for the new market?
Result: A clear decision question, evaluation criteria, hypotheses and issue tree.
Checkpoint: Question and criteria aligned with the client.
Step 2: Analyse and assess the market
Guiding questions:
- How big is the market, and how fast is it growing?
- Which segments exist, and which are most attractive for the offering?
- Does the target group have sufficient purchasing power?
- Which trends and drivers shape the market?
- Which political, legal, economic and cultural conditions apply?
Methods:
- Determine market size top-down and bottom-up and cross-check them
- Environment analysis (e.g. PESTEL)
- With several target markets: market screening, i.e. the systematic assessment of potential markets by attractiveness and risk (template below)
Sources: For secondary research, market reports, databases and competitors’ websites have proven useful, for example statistics offices, industry associations and market studies. Every number needs a traceable source.
Result: Market model with size, growth and prioritised segments.
Step 3: Check competition and barriers to entry
Guiding questions:
- Who is already in the market: market leaders, niche providers? How do they differentiate, with which pricing models?
- Do competitors have a clear lead in know-how or customer loyalty?
- Which barriers to entry exist?
Typical barriers to entry:
- Regulatory: licences, data protection (e.g. GDPR), product standards
- Sales: access to channels and partners
- Customers: brand loyalty, switching costs
- Culture and language
- Costs: investments, economies of scale of the incumbents
Methods:
- Competitor overview with profiles
- Price comparison including discounts and switching costs
- Porter’s Five Forces: the threat from new entrants is limited precisely by these barriers to entry
- Expert and customer interviews with potential customers, local sales partners and regulatory experts
Result: Competitive landscape, list of barriers to entry with an assessment of how they can be overcome.
Checkpoint: Market and competition picture approved by the project lead.
Step 4: Define entry mode and positioning
Possible entry modes:
| Entry mode | Control | Resources | Risk | Suited for |
|---|---|---|---|---|
| Export (direct or via distributors) | low to medium | low to medium | low to medium | First steps, test markets |
| Licensing | low | low | low | Technology, fast distribution |
| Franchising | medium | medium | medium | Standardised offerings |
| Partnership / joint venture | medium | medium | medium | Access to local know-how and network |
| Acquisition | high | high | medium to high | Fast access to customers and market share |
| Own set-up (greenfield) | high | high | high | Full control, long-term build-up |
Classification based on common overviews of market entry strategies.
Positioning:
- Which value proposition should the offering have in the new market?
- Which target segment do you start with? Successful market entries usually start narrow: with a clearly defined target segment and a few pilot customers, and scaling only follows after first successes.
- How does the offering have to be adapted: product, price, language, service?
Result: Recommended entry mode, target segment, positioning.
Step 5: Business case and recommendation
Contents:
- Revenue potential based on market size, realistic market share and ramp-up curve
- Investments and running costs: staff, sales, marketing, adapting the offering, legal
- Break-even and payback period
- Scenarios (cautious, base, optimistic) and sensitivities of the most important assumptions
- Risks and countermeasures
- Recommendation: go, no-go or stepwise entry
- Roadmap with pilot phase, milestones and metrics for success tracking
Result: Decision paper with executive summary for management or the board.
Checkpoint: Business case and recommendation approved by the partner.
Template: evaluation matrix for market screening
| Criterion | Weighting | Market A (1–5) | Market B (1–5) | Market C (1–5) |
|---|---|---|---|---|
| Market size | 20 % | |||
| Market growth | 20 % | |||
| Competitive intensity (5 = low) | 15 % | |||
| Barriers to entry (5 = low) | 15 % | |||
| Fit with offering and strengths | 15 % | |||
| Legal and political stability | 10 % | |||
| Cultural and linguistic proximity | 5 % | |||
| Weighted total | 100 % |
Adjust the weighting to the client’s question.
Typical mistakes
- Market defined too broadly: the potential is overestimated, the target group stays blurry.
- Barriers underestimated: especially legal, cultural and sales-related ones.
- Secondary data only: without conversations with customers and experts, the reality check is missing.
- Business case too optimistic: ramp-up too fast, costs for sales and adaptation set too low.
- No pilot: full investment without a prior test with a few customers.
