Optimizing your market reach has two distinct elements — broadening your market footprint and rethinking the ways that you serve existing markets.

A “Beijing, Shanghai, Hong Kong” entry strategy may take you directly into competition with most of your competitors. There are 49 cities in China with population in excess of one million.

Broadening your market footprint

Both groups of companies we considered are actively exploring geographical expansion — and there are a broad number of countries where companies indicate an interest for expansion.

Good performers show a significantly increased focus on diversifying geographically and an even greater interest in pioneering innovative entry strategies into those markets, for example, by basing production locations in adjacent markets or targeting distinct segments.

Which of the following market reach
and product/service mix practices
has your company adopted?

Rethinking how you serve your market

The downturn raised challenges with some traditional distribution channels and some were forced to slow investment in technology.

Good performers are ahead of the curve in both areas, as they are with finding new market opportunities for existing products where the major costs have been incurred and the upside can be especially profitable.

New ways to enter new markets

China is a market of vast potential but it is also a complex market with significant variation. And companies have often completed similar analyses to conclude that urban centers on the western seaboard are the most attractive targets.

But a “Beijing, Shanghai, Hong Kong” entry strategy may take you directly into competition with most of your competitors. There are 49 cities in China with population in excess of one million. Some companies are therefore exploring “tier-two” urban entry strategies to build critical scale to reinforce the approach to larger markets.

Management should ask itself:

• Which markets will be the most important in the short, medium and long term?
• Is your analysis of the new market as deep as it needs to be?
• Where have your competitors gone and how have they progressed?
• What is different about your approach?
• Have you explored all the possible routes to achieving your goals?
• What is your time horizon for entry?
• How developed is your thinking for the post-entry phase?