Developing A Market Entry Strategy

strategy Mar 10, 2022

Using Competitive Landscape Maps as a Positioning Tool

Developing a Competitive Landscape Map ("CLM") is a very important early step in developing your market entry strategy and getting other people to understand it. There may be several of these maps (see samples below) charting different market variables that are significant to customers in that market. There should almost always be one that uses quality and price as the X and Y-axis. Additional maps will look at other key dimensions, significant in that space to customers, or dimensions may be major product differences. Sufficient competitive intelligence should be done on each potential competitor to understand its size/resources, current market position, sales strategy, target markets, and other factors specific to the industry. On initial market entry, it is always best to position yourself where no one else already is on this map. When you do this you are not selling head-to-head on day one while you are weakest. This would force you into price competition early, whereas if you have a unique position, you offer a differentiated product (hopefully tuned to the target market) and can offer the best product for the customers you are approaching.

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Steps to Developing A Successful Market Entry Strategy:

  1. Understand the competitive landscape well and have a short profile of each competitor. Market research is the key here. Keep this information in a living and breathing document that evolves with the market.
  2. Decide on the key variables and develop several landscape maps to find a differentiated position that implies an identifiable target customer group.
  3. Design your business, including pricing, sales strategy, marketing, product delivery (operation), and customer service for that price point and target customer.

SIMPLE CLM SAMPLE #1 - The levels and dimensions here are somewhat arbitrary and will be different for each space and set of competitors, but price and quality are two dimensions that impact almost every market space, except raw commodities which are not discussed here. A simple example showing the automotive industry as rated by consumer reports might look something like this (not real data, only for illustrative purposes):

Highest Quality

Medium Quality
Lowest Quality
  Low Price Mid-Price Higher Price Highest Price

 Other variables and CLMs to develop for entering this market might include:

  1. Sportiness (horsepower, sports cars, and "sporty" features)
  2. Luxury and comfort appointments (i.e. Lincoln, Cadillac)
  3. Size of vehicle, number of seats, etc. (minivans and large SUVs with 3-row seat)
  4. Utility for storage (i.e. inside volume for storage, larger trunk size, pickup trucks to SUVs)
  5. Sales Style (i.e. Saturn no-hassle pricing)
  6. Try before you buy (i.e. GM's new overnight test drive)
  7. Demographic targeting (i.e. young families, X Generation, and the Nissan Xterra campaign)
  8. Geographic targeting (i.e. Subaru 4WD in heavy snow regions)

All of these can be looked at against each other, or against price. These different looks will systematize what an excellent marketer will do in their head by submerging in the market data.


A MORE COMPLEX SAMPLE CLM #2 - This landscape map for the content management space in 2001. This is a market that has many more variables and very complex products, but these variables can be broken down into more maps. The arrows indicate the direction the companies seem to be moving in the market while evolving their product(s) and/or acquiring competitors to broaden their product line.

Once this map is developed, it becomes easy to see spaces (customer segments) that are not served by competitors. What does that mean? Well, it means there is a group of customers out there, who hopefully you can identify by profile, who would want the exact product you could offer over any competitor. This means with these customers you have the advantage and can probably maintain your price and not go into a beauty contest with every customer bid. This means when you initially enter the market when you are weakest, you can:

Focus your sales efforts on a manageable number of high yield target customers.

  1. Protect your margins
  2. Not attract the attention of larger competitors
  3. Get customers to take the extra risk of working with a new supplier in exchange for that differentiator you have created
  4. Get customer references more quickly
  5. Get customer feedback that allows you to make product improvements more quickly
  6. Build reference accounts

Remember, every day you run your company without sales you are leaking fuel, like the SR-71, without making progress. You must get time on your side, not against you by getting revenue flowing quickly. This is best done by serving a narrow niche first with exactly what THEY want, then broadening from there. Not only does this allow you to find customers with the lower expenses, but it will also increase your closing ratio dramatically.

There is no reason your market entry strategy needs to be the same as your longer-term strategy, as your company grows and builds revenue and resources it can take on established competitors in spaces they control, but you must expect some margin degradation and harder selling. Often times it is good to have a plan to evolve your company through several market positions to avoid head-to-head competition with the toughest players in the market. This can fight with the desire to "Brand" your company with a single particular image, but this is a manageable problem and is a topic for another article.

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