Market Entry And Growth Strategies For Businesses

Understanding the Market Before Market Entry


Produce a report for Sony Ericsson.

Market entry is one of the most strategies that have been used by many companies so that they can be competitive in the market. Before SMC decides to enter a new market, they need to understand the market first. It is always better for the company to understand the complications that they may face when they are planning to enter the new market. The existing mobile companies should be analyzed so that SMC can get an idea if they can survive in the new market or not. Also SMC needs to decide on the mode of entry so that arrangements for the same can be made accordingly. Lastly, the trade barriers also need to be considered so that SMC can get an idea about their eligibility in the market.

Substantive growth strategy will help SMC to grow in the existing area itself. Few of the management members may think that this strategy will not make much difference to the business but that is not true. With the help of substantive growth strategy, a loss making company like SMC will soon become stable and hence, the management will then be stable regarding the direction in which they need to move. Substantive growth will help the business to be competitive enough and hence, the management can be competitive enough to compete with the other similar businesses in the market.

Limited growth strategy can be used by SMC if the management is not willing to take big risks. Few of the managers may think that it is very important for the organization to limit the growth of the company. If the growth is not limited then there are possibilities that the company may land in an unknown direction. Limited growth will help the company to avoid massive debt. The company may think that they can manage debt now but this will be a problem in the near future. The management can take their time and decide on what they want to do and what they should avoid.

Retrenchment strategy

Retrenchment strategy is undertaken by SMC when they are sure that they don’t want to grow back or when they may think that the growth will be planned only after a period of few years. The size of the organization would be reduced and hence, in retrenchment strategy the management will have to look for ways by which the employees who are retrenched should be satisfied by way of monetary benefits or outplacement help. This strategy will have to be dealt with very sensitively so that the sentiments of the existing employees aren’t hurt. Even the trade union may get aggressive if proper justification for retrenchment is not given to the employees (Lecraw 1984).

Sony Corporation should opt for market entry strategy rather than that of looking at other strategies. The management of the company will have to put in extra efforts and also will have to make huge investment but it is worth to make the investment as the company will witness growth in the near future. There are plenty of reasons due to which market strategy is recommended over the other strategies which are available in the market. Few of the advantages due to which Sony Corporation should be recommended to opt for market entry strategy rather than that of any other strategy are discussed below.

Substantive Growth Strategy

Plenty of markets are available so SMC can choose the one wherein they think that they can be successful. SMC should conduct a market research so that they can get an idea about the market that they are planning to enter and at the same time, the company will also get an idea about the risks that they will have to bear if they are planning to enter the new market.

The return on investment is very high if the company is planning to invest to a new market. Initially the management will have to put in extra efforts so that they can be better than that of existing players in the market but the revenue generation opportunity that SMC may get in foreign country cannot be expected in the local country where the competition is high and at the same time, the return on investment will also be lower (Lorange 1996).

If the company is planning to enter a developing nation then there are possibilities that the cost of entering the nation will be very low as compared to that of the cost set-up in the developed nation. If SMC is not sure about the benefits that they may get by way of entering the new country then they are recommended to form a merger with one of the existing companies. This will help the company to share the cost and at the same time, good revenue generation can be expected.

SMC can combine their strengths with the strength of the local company and this will help them to be successful in the market. It is always better to look for ways by which the company can form a union with an existing company as the existing company will be aware of the likes and dislikes of the people in the local market (Nandakumar 2010).

One cannot simply implement the strategy without the help of different team in the organization. It is the responsibility of the management to look for ways by which strategy implementation can be undertaken successfully. Few of the professionals who will be involved in the strategy implementation process are discussed below.

The management will be directly involved in the strategy implementation process. These people will decide on the strategy that needs to be implemented and the different people who will be involved in the process of strategy implementation. All the major decisions that will be taken by different team with regards to strategy implementation will be approved by the management. The management of SMC may not be involved directly in the strategy implementation process but they will be actively involved.

The human resource team will be very actively involved in the strategy implementation process. The human resource team will be involved in the hiring process. The management will have to continuously keep the human resource team informed about the resources that will be hired in the organization. The management of Sony Corporation needs to understand that without proper resources, the organization will not be able to implement the strategy that has been planned. The human resource professionals will closely work with the management so that they can hire the resources as per the strategy that has been planned.

Limited Growth Strategy

The finance team in the organization will have to be involved in the strategy implementation process. Every penny that is used by Sony Corporation for the purpose of strategy implementation will be directly approved by the finance team (Paul 2013). If the finance professionals at Sony aren’t convinced with the money that the company is going to spend for the purpose strategy implementation then the funds will not be allocated. The finance team will have to be given an estimation regarding the cost so that the finance team can approve. Depending on the approval, finance team will allocate funds for the strategy implementation.

The middle level managers are the only connectivity between the top level management and the employees. The employees in the organization cannot be ignored while strategy implementation is being undertaken. The middle level managers will get a brief explanation on the strategy that will be implemented and accordingly, the middle level managers will communicate the same to the employees. It is very important for the middle level managers to be informed. In case of ignorance, the employees will continue to follow the same routine and this may lead to failure in strategy implementation. It is merely impossible for the management to inform all the employees individually and hence, middle level managers should be involved (Rajala 2009).

Market entry is the strategy which has been opted by Sony Corporation so that they can fight against the problems that they are facing in the market. It is very important for Sony Corporation to look for ways by which the new strategy can be implemented in the organization. If there is no proper planning then there are very less chances that the strategy can be successfully implemented. The resources that will be required by Sony Corporation for the successful implementation of strategy are discussed below.

First and foremost, the management will have to make arrangements for the financial requirements. If the organization is entering a new market then they will require lot of money. Sony Corporation will have to set aside the funds required for the purpose of entering new market. In case of lack of financial resources, the company will not be able to explore all the available options.

The company will also have to look for tangible property like land, equipments and furniture. The land and office will be required so that Sony Corporation can start with their operations in the new place. If Sony Corporation wants to set their manufacturing plant in the new market then they will require a lot of equipments. On the other end, if the company is just planning to set their office then there will be very less equipments like computers, printers and few more things (Rumelt 1982).

Sony Corporation will also look for human resources. The resources should be well trained so that the employees can be productive from the day of hiring and at the same time, getting employees, who are aware of the work that they need to do at Sony Corporation, is also a difficult task. The organization can hire employees who are technically strong so that the management can provide cultural training to the employees regarding the culture and attitude of Sony Corporation workplace.

Retrenchment Strategy

Technology is also one of the things that Sony Corporation will require so that they are successful in the strategy implemented. If Sony Corporation is planning to enter into a developing economy then they will find it difficult to find the existing technologies. If Sony thinks that they have better technology in their current office then they can transfer the same to the new location. Government approvals and other formalities will have to be taken care of before the organization starts with exporting technology (Webster 1996).

Sony Corporation very well understands that they will have to set SMART objectives for the business so that they can survive in the business. Few of the SMART objectives that would help Sony Corporation to improve continuously and also achieve the market entry strategy are as follows: –

1. Sony Corporation will increase the sale of Sales mobiles in the new market by 15%, in the next two financial years.

2. The company wants to achieve 90% customer satisfaction in the first year. Slowly and steadily, they want the customer satisfaction to increase to 99.9% by the third year.

3. The company wants the produce mobile for people with different expectations. Simple basic mobile will also be produced and at the same time, high end mobiles will also be produced (Schaap 2012).

Balance score card will help Sony Corporation to understand the expectations that the customers have from them and also the place where they stand. The balance score card of Sony Corporation with regards to the market entry strategy is as follows.






Increase the market share

Attract the customers to buy Sony Corporation mobiles over the competitor product.

15% increase in the revenue

Mobile will be available in different price range.

Extensive marketing so that the customers are aware of the presence of Sony Corporation.


Produce mobiles at low price

Lower cost of production

Decrease the price of mobiles by 20-30%

Cheaper modes of marketing will be undertaken.

Internal business processes

Increase the number of mobile sets

Quantity in the number of customers

$100,000 increase in the revenue

Every person will have a mobile that fits their budget.

Learning and growth

Understand the expectations of the customers

Number of training programs will be increased

Every employee will have to undergo minimum 30 hours training in a month’s time

The manager’s suggestion with regards to training will be taken into consideration.


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