MARKET ENTRY POTENTIAL

Analysing Market Entry Potential

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Executive Summary

This analytical report looks at the market entry potential for Nokia. First, the report shows the methods and tools for measuring the attractiveness of a given market. These include the Porter's five forces model, SWOT, and PEST tools. These tools accurately identify the attractiveness of the chosen market for entry. Still, the five forces model is the best.

Next, the report shows the various tools available for assessing the internal capabilities of a firm. These include value chain analysis, Kay's method, SWOT, 7 Ps of marketing, and BCG matrix. It is clear that all of these tools are effective in exposing the capabilities of the business.

There are three modes of entry into a foreign market. First is multidomestic or multinational approach whereby the organisation does not integrate with the global headquarters and provides locally-tailored products. Second mode of entry is a global approach. Under this approach, the business enters the foreign market as a global firm with international brands. Finally, the business may enter a foreign market as a transnational corporation. Such a corporation engages in high collaboration with the global headquarters, still sells both locally-tailored and international products and services. There are relative advantages and disadvantages of each mode of entry. The global approach has the highest brand equity while the transnational corporation attains the highest local growth and expansion.

Accordingly, it is recommended that Nokia conduct international market expansion analysis for various markets that it currently operates. Yet, it is clear that Nokia has both core and dynamic capabilities to enter any market. Still, Nokia is currently operating in international markets as rudimentary foreign market player by using foreign distributors and third-party agents. Therefore, it is highly recommended to Nokia that it expands into multiple foreign markets with a global approach.

Table of Contents

Executive Summary1

1 Introduction4

2 Analysing Market Entry Potential for Nokia5

2.1 Tools for Measuring Market Attractiveness5

2.1.1 5-Forces Model5

2.1.2 SWOT Analysis8

2.1.3 PEST Analysis8

2.1.4 Relative Strengths and Weaknesses9

2.2 Tools for Gauging Internal Capability of the Company10

2.2.1 Value Chain Analysis10

2.2.2 Kay's Analysis of Competitive Advantage10

2.2.3 The Marketing Mix11

2.2.4 SWOT Analysis12

2.2.5 BCG Matrix12

2.2.6 Relative Strengths and Weaknesses13

2.3 Market Entry Modes14

2.3.1 Multidomestic or Multinational Approach15

2.3.2 Global Approach15

2.3.3 Transnational Approach15

2.3.4 Relative Strengths and Weaknesses16

3 Conclusions and Recommendations19

References22

Analysing Market Entry Potential

1 Introduction

When we analyse the market entry potential of a given geographic area we look at various elements and factors. Internationalisation or entering into potential global markets is not an easy task. It requires a specific corporate strategy as well as a business-level strategy for the firm. In addition, several factors have to be taken into account when deciding about entry into a global market. These factors inter alia include market analysis, analysis of the competitive position, determining the quality requirements, assessing distribution channels available, and conducting comprehensive risk analysis where these risks range from the sovereign risk to product risk, etc. (Petschnig, n.d.).

International market expansion is also a challenging issue. Accordingly, the retailers and other local or multinational firms are faced with multiple problems when deciding ...