Entering a new market is a significant step for any business looking to expand its horizons and increase its market share. Companies can choose from several strategies to penetrate a new market, each with its own set of advantages and challenges. Here, we delve into three primary market entry strategies: Organic Growth, Build-Operate-Transfer (BOT), and Mergers and Acquisitions (M&A), and how our company can facilitate this process.
Organic growth is a fundamental approach where a company uses its internal resources to grow gradually. Our five steps methodology is designed to guide businesses through this process systematically. It starts with market research to understand the local demand, followed by a strategic entry plan that considers the competitive landscape.
The third step involves establishing a local presence, which could mean setting up a new office or distribution center. The fourth step is to scale operations and marketing efforts based on the initial response. Finally, the fifth step is to optimize and refine the approach as the business grows within the new market.
Grus Consultor, as consultant, will guide your steps through the entire process, assisting in all the activities and making sure the plan is realistic and doable.
This methodology was developed for non-European Technology Companies to set foot in Romania as a gateway to the European Union using a five simple steps methodology, in five quarters.
We built a simple methodology, tested for 15 years and proved to be a success. Of course not all the businesses can embrace the same timeline but, strategically speaking, those are the safest steps. The BOT model is a partnership-driven approach. It involves collaborating with local entities that already have a market presence.
Instead of a top-down approach, you can bottom up your expanding philosophy by limiting costs and risks. Use our management, facilities, legal, financial, HR, technical chapters, best practices and capacity. We build a core inside our organization for you. A BOT usually takes around three years to mature.
Our company has developed a network of potential partners to facilitate this process. In the build phase, we work with these partners to establish the necessary infrastructure and operations. During the operating phase, we manage the day-to-day operations, ensuring that the business adheres to the local market's standards and practices.
Finally, in the transfer phase, we hand over the operations to the local partner, who will then continue to run the business, often with ongoing support and collaboration.
Utilizing a BOT for operations presents significant advantages, including a reduction in costs by 50% and a decrease in time spent by 40%. The initiation period for a BOT is considerably shorter, taking only 4.5 months to become operational, as opposed to the typical 13 months. Additionally, a BOT eliminates the need for personnel in overhead positions, where normally at least seven individuals would be required. The maximum cash exposure is halved, and full production capacity is achieved two quarters sooner than usual. These benefits highlight the efficiency and financial savings associated with implementing BOT technology in business processes.
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M&A is the most direct and often the fastest way to enter a new market. This strategy involves either merging with a local company or acquiring one. It can provide immediate access to established customer bases, local market knowledge, and operational capabilities. It is a complex process that requires careful due diligence, negotiation, and integration planning.
Our company assists businesses throughout the entire M&A process, from identifying potential targets to finalizing deals and integrating the new entity into the parent company's operations.
Each market entry strategy has its unique benefits and potential drawbacks. Organic growth allows for a controlled, measured expansion but can be slow. The BOT model offers a balance between control and local expertise, with the added benefit of established partnerships. M&A provides rapid market penetration but comes with higher risks and costs. Our company is equipped to support businesses in choosing and implementing the right strategy, ensuring a smooth and successful market entry.
Many thanks for your interest, we look forward to working together!
We invite you to send us any questions to the address development@grus.ro or to the phone number +40775501404.
Grus Consultor Team - Development