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Entering New Markets/Alternative Distribution Strategies
Why
enter a new market?
Sometimes we get a call from a company that needs to get into a new
market. They have grown inefficient, and new competitors in their
current market are taking the market away from them. Rather than
address their inefficiencies and lack of responsiveness, they hope to
find a market where nonresponsive and inefficient companies can
prosper. Unfortunately for them, our free enterprise system doesn’t
leave much room for companies like that. We can’t help them.
There
are plenty of other good reasons to enter new markets, however, and few
things can be as exciting for a company as researching and evaluating
other markets, looking for the best opportunity, and then entering that
market with a better mousetrap. Winning is fun. It’s exciting. Yeah,
and it can be profitable too!
Remember high school? Wouldn’t it be different “if you could go through
high school again, knowing what you know now”? We’ve all said something
similar to that at one time or another. One of the great things about
entering new markets is the chance to do just that….start all over
again, knowing what you know now. If you aren’t grinning, just thinking
about the possibilities, then pause a little longer – because this is an
exciting opportunity!
Of
course, something else we have done is simply change how a company
markets and distributes in its traditional market. While it doesn’t
work for everyone (that’s why you call a consultant – to see if it could
work for you!), you may be able to become significantly more
competitive, simply by trimming one or more layers from your
distribution channel….perhaps even selling “direct”. Now THAT probably
took the grin away – scary thoughts – but something worth considering.
Why?
Well, when manufacturing companies first start up, they need volume and
distribution. Hopefully, somewhere along the way, they have gained some
recognition, have a little better cash position, and a lot more
familiarity with the market. In short, you’ve grown up a bit. The
sales and distribution choices that made sense when you first started
need to be reviewed, just to make sure they are still your best
options. Do you want to do that review now, or just wait for one of
your competitors to demonstrate the possibilities that exist? If they
get a good head start, you may never catch back up. Now, that would be
a shame…. |
