How to do market entry in the case of many competitors?
01 Judging the market structure
The more limited the resources, the more work is required. Collect market information to determine which competition structure of this market belongs to:
A perfectly competitive market: Many merchants sell homogenized products to the market.
Monopolistic competition market: Each merchant's products have certain differences.
Oligopoly market: A small number of merchants occupy, each seller's market share is relatively stable.
Complete monopoly of the market: a company owns the entire market.
Behind the different competitive structures are different levels of competition and competition, which determine the difficulty of market entry.
For a perfectly competitive market, the entry point for competition may be price, service capacity, financing ability and operational efficiency. Such market opportunities and obstacles are the most accessible markets, such as hundreds of group buying websites around 2009. .
For a monopolistic competitive market, each company can find a niche for itself through differentiation. For example, in the current beverage market, differentiation is easy to enter.
The oligopoly market is often mature, and the opportunities are not big. For example, today's Chinese e-commerce market and China's express market require high-level planning.
The most difficult thing to enter is the complete monopoly of the market. In China, mainly in the energy and financial industries, there is basically no opportunity to be restricted by policies and so on.
Below we take the example of entering the difficult oligopoly market as an example.
02 Looking for a niche market
To enter a market, we must find a breakthrough and find a market that is intentionally or unintentionally ignored in the competitor's layout, that is, the weak links of the market and even the unmanned areas.
In the oligopolistic market, this weak link is often very small, we call it the Niche Market. The niche strategy can help companies choose a small product or service area, concentrate on entering and becoming a leader, from the local market to the whole country to the world, and at the same time establish various barriers and gradually form a lasting competitive advantage. Because niche markets tend to be small, it is important to choose niche markets with potential – they may become big markets over time. For example, if a small cost entered the cat food dog food market 10 years ago, it should be full today.
Al Ries, the father of positioning at the World Summit of Marketing in October 2014, said: “The more companies focus on the masses, the more often they are, the more they focus on themselves. The niche company, the last to cultivate is the public." This sentence is simply a small company's day: the more limited resources, the more focus and concentration.
There are also some markets that are ignored by big companies. For example, in recent years, "small town youth", which is especially favored by Internet companies, has created a tens of billions of dollars of unicorns, such as fast hands and fights, and the opportunity of Philip Kotler’s father to call it the bottom of the pyramid, Christensen ( Christensen) considers this to be the foundation of disruptive innovation. Go find the market that was lost because of the arrogance of big companies!
The breakthrough of the market will not appear in front of people. On the contrary, it requires people to cut the market based on the in-depth understanding of the market, and to divide a strategic unmanned area with potential and advantages. This is the top priority of market entry. . How to find an important niche market? Go to the industry and consumers, creative cutting!
03 Choice of value elements
In the face of a new market that has been cut, old products and services are destined to not please it, otherwise he will not be blank. INSEAD Business School professors W. Qian Jin and Rennie Mauborgne proposed the method of occupying new markets in the Blue Ocean Strategy: Value innovation. The first step in value innovation is to judge the value elements in the market, that is, what efforts are made by everyone in the industry, what consumers care about, and then these elements are: eliminate, increase, decrease, and create.
The advantage of this is that it is not necessary to build a car behind closed doors. The study of existing value factors can ensure that we do not make big mistakes, and then achieve the overtaking of competitors through the creative combination of value elements or the creation of new value elements.
The most famous case of value innovation is Southwest Airlines of the United States. This company may be stranger to everyone. At the end of this article, I will give a case of China to let everyone better understand. Here, Southwest Airlines is used to explain what is called value innovation.
In the aviation market, consumers' main concerns include price, catering, waiting room, seat comfort, transit, friendly service, punctuality, long-term waiting, etc.
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