Market entry strategy and advisory in Indonesia
A market entry strategy is a method of how a company plans to deliver and distribute goods or services to a new market. A good market entry strategy is preceded by a market research which gives the company and understanding of the market and whether and how to compete in it.
Once a market entry strategy is established it’s followed by a business model. A more tactical plan of how a company will make money.
Emerhub works with our clients in Indonesia all the way from initial research until setting up and supporting the local operations. Reach out to us to get a proposal for your company’s market entry to Indonesia or Vietnam.
1. Market research
During the market research phase we collect and systemise information about the market you are about to enter. The exact activities conducted under a market research depend on what the company sells, how well it already understands the market, budget and many other factors. However, most initial market researches Emerhub conducts contain some form of an analysis on the following:
- Regulatory analysis: what are current and upcoming laws and regulations concerning the industry? E.g. is foreign ownership allowed, what is the minimum capital requirement, required licenses.
- Industry analysis: what is the size of the market, growth rates, trends. Who are the consumers and what they want?
- Competitive analysis: who are the key competitors, suppliers, distributors in the market? What are their strengths and weaknesses? What will be our competitive advantage?
2. Market entry strategy
There are various ways to enter a new market. Most of the strategies can be divided into 5 categories:
- Export: exporting products to a market either directly or using local distributors or agents.
- Licensing: signing agreements that allow local parties to use your product or service under a license agreement.
- Franchising: signing agreements that allow another party to operate a business under your brand name.
- Joint venture: joint operations with one or more parties.
- Greenfield: building foreign operations from the ground up.
Which market entry strategy is right for your company?
At Emerhub we use mainly four factors to determine which of the market entry strategy to go for. Those factors are:
- Objectives: what do you want to achieve in the new market? Are there global and regional strategies that have to be considered?
- Competition: what is the competitive landscape in your industry? How can you compete, where are you the strongest?
- Resources available: what is the available budget for market entry?
- Risk tolerance: how big risks are you willing to take? Do you want to go slow and steady or go as big as possible as quickly as possible?
3. Business model
In a nutshell, business model answers the question of how a company plans to make money. In the context of entering a new market, we look at the following:
- Who are the customers and what do they want?
- How do we reach out to customers?
- How do we deliver the product/service to the customers?
- How much should we charge the customer and how much does it cost us to deliver the product/service?
Once all of the three stages – market research, entry strategy and a business model – are completed, your decisions about market entry will be based on solid foundation of information and our local experience combined with your industry expertise.
This was a short summary of the three stages of market entry strategy and advisory service Emerhub offers. As companies and industries vary greatly we will go much more into details once we start working together.
Get in touch with Emerhub by using the form below to discuss how we can help you enter Indonesia.