Question

Q) Entry into a market by a new competitor evokes a reaction. As a result, a competitive dynamic-action and response begins. Before responding to a competitor, firms must understand the competitive dynamics of the business in order to succeed with a growth opportunity. Suggest and critically discuss a model that helps managers to meet this objective

Answer 1

New market entry is always a critical situation for any organizations. This needs deep level market, economical and social situations analysis to understand the feasibility, mode of operation and political support for ease of doing business. Market anakysis has to be done properly to determine which market model can help to survive in the market whether it is licensing, franchisee, direct operations, strategic alliance etc. Competitors understanding is quite important as what's thsir mode of operation, customer base, market share and pricing is important to design for better competitive situation and beat the market. The growth opportunity has to be analysed using the fmvarious PESTEL model and SWOT analysis. This helps in reducing the risk and improving themself by re designing the strategy and avoiding the mishaps. When a market for the certain industry is saturated or economical situation is not favorable it is highly risky to start operations in new market. The makret potential evaluation through market studies, surveys and competitiors evakuai can eliminate major risk and help in preparatory sessions.

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