Introduction
Oduntol F&D is free to enter new markets, especially if the target market has no barriers. However, a comprehensive analysis must be conducted to determine the best approach possible for success. While getting into new markets, the organization needs to do surveys, pricing trials, and market observation to gather enough information.
In addition, the company should conduct a situational analysis to establish opportunities such as free customer preference and pricing and challenges, including competition and the free market, to strategize on gaining competitive advantage and overcoming the problems.
Market Entry Approach
Since Oduntol F&D Company is enjoying a positive industry performance due to its large market share and profit, it is necessary to use the product entry approach by diversifying the product range or launching a new product. To diversify, the firm can introduce products such as biscuits, cakes, hotdogs, and burgers into the market. Product entry will allow the firm to increase sales and consolidate the market.
Product Entry
Assessment of the Target Market (Desirability)
Oduntol F&D will assess the London market by determining the following factors: First, the firm will evaluate the size of the revenue opportunity and if it can accommodate the new product. Secondly, Oduntol F&D will assess the growth rate of the target market by looking at how quickly or slowly the target market grows. Third, the company will establish if the target market has a desirable customer demographic to support the new product. Fourth, the business will analyze the competitive landscape of the target market and if it will manage. Fifth, DK will identify the stage of the industry lifecycle of the target market. The final market analysis step will be about the anticipated market share.
Evaluating the Internal Capabilities (Feasibilities)
In the second step, Oduntol F&D will assess its internal capabilities concerning entering the new market. The firm will analyze if the new products are suitable and match the standards of the target market. Secondly, Oduntol F&D will assess if its organizational structure and operating model suit the target market. Finally, the company will evaluate its robust processes and if they are enough to perform in the anticipated market.
Analyzing the Investment Case (Viability)
In the third step, Oduntol will analyze if it needs to enter the new market and whether the reasons make sense. The company will assess the estimated costs and revenue required to enter the anticipated demand.
Secondly, the company should check the forecast payback period for the required investment for the market. Third, Oduntol F&D will assess the estimated ROI for joining the new market. And finally, the business will analyze the anticipated risks in the target market, looking at the technological, legal, and political, among others.
Building an Execution Plan
In the final step, the company will analyze the practical preparations by assessing if it has what it takes to join the market. During the execution phase, Oduntol F&D will use the gathered information and implement them to decide on the market’s timeline and how the firm will join. The execution stage will; see the firm converting the plan into action.
How to Gather Information
To gather information about the target market, Oduntol F&D will use various methods in its research. In the era of internet technology, social media will act as an essential source of information. In addition, primary and secondary sources will provide the company with the needed market data. The firm will employ the following techniques in gathering data;
Consumer Surveys
The firm will depend on surveys to gather information. Oduntol can set short-series questions for the target consumers to get their market view. The surveys can take both offline and online forms. In the era where most consumers embrace online media, the company can use online surveys to access more customers and get reliable data. The online survey will reach many target consumers.
Pricing Trials
The second method of gathering market information is the pricing trials. The technique involves testing prices, introducing new pricing models, and assessing market reactions. Price is an essential factor that defines most markets; therefore, using pricing models to evaluate the consumers makes a lot of sense as it will reveal the consumer strength, frequency, and propensity.
Observation
Observation is another alternative method for gathering market information for Oduntol F&D. The firm can send some representatives to have a customer observation session in the market to study and analyze the behaviors of consumers. The observation will focus on the customer interaction with the substitute products and the consumer behavior toward new products, the consumer purchasing power, and the frequency at which customers buy a particular good, especially substitutes.
Sources of Information
The company can gather information from primary data from observed consumer behavior and secondary data from previous market studies. In addition, Oduntol F&D can use information from interview respondents to compile market information. Experimentation is another critical source of market data when conducting experiments on target consumers. Finally, market simulation is a reliable source of market information.
Situational Analysis
Opportunities
Pricing
Price remains an opportunity that Oduntol F&D can explore in the new market. The company can use a low-pricing model to attract customers and increase sales. Being a new firm in the market, lower prices can help it turn many customers to its brand, considering most current businesses charge high prices. Customers will choose the cheaper alternative provided by the new firm.
Customer Preference
Oduntol F&D can capitalize on the consumer preference for packaged food in the new market. Most consumers would prefer packaged food over unpacked since they are easily carried. People with families will have an easier time taking food for their families. Similarly, individuals staying alone will be in a position to bring some food home. Therefore, packaged food will be a preference of most consumers in the food market.
Challenge
New Market
While Oduntol F&D is determined to enter the new food packaging market, it will be challenging to cope and compete favorably with existing firms. It may take more time for the firm to adapt and compete with rival firms. Established firms with popular brands enjoy brand loyalty hence will make it difficult for the new firm to attract consumers.
External
Free Entry
The food industry is an open market with free entry and exit. Firms can freely join the market and leave at will. Oduntol F&D can use the absence of barriers to enter the new market and compete with the existing firms. In the same vein, the company will enjoy the free exit policy of the market to leave the market whenever necessary.
Competition
Even though the new market provides several opportunities for Oduntol F&D, some challenges should be anticipated by the firm. Being an open market with no barriers, the industry comprises several firms which cause competition. Oduntol F&D will face stiff competition from existing and new firms that may enter the market.