This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
This product (Psychology of Market Entry Analysis) is a 27-slide PPT PowerPoint presentation slide deck (PPT), which you can download immediately upon purchase.
For every successful market entry, about market entry attempts end in failure. This failure is attributed to many factors—timing, scale, competition, capabilities, and particularly irrational decision making. The decision to successfully enter a market necessitates detailed analysis. These critical decisions, however, often get tainted by Cognitive Biases—the systematic errors in the way people process information. Cognitive Biases distort executives’ perception regarding their firm’s capabilities, potential market, and competition.
The presentation starts by highlighting a 2-pronged approach to Market Entry Analysis:
1. Develop a Reference Class
2. Remove Bias from Decisions
The deck then discusses the 6 key factors of market entry success:
1. Size of entry relative to minimum efficient scale
2. Relatedness of the market entered
3. Complementary assets
4. Order of entry
5. Industry lifecycle stage
6. Degree of technological innovation
The details of the 5 core issues in removing biases from decisions are then highlighted:
1. Value Proposition and Capabilities
2. Market Size
3. Competition
4. Market Share and Revenue
5. Costs
The slide deck also includes some slide templates for you to use in your own business presentations.
This PPT delves into the intricacies of cognitive biases and their impact on market entry decisions. It emphasizes the importance of developing a reference class to mitigate these biases and make informed decisions. The presentation also covers the nine most common cognitive biases that can distort decision-making, such as framing bias, conservatism bias, and availability bias.
Executives will find actionable insights on how to identify and counteract these biases, ensuring a more rational approach to market entry. The document also includes practical templates to facilitate the application of these concepts in real-world scenarios. This resource is essential for any executive looking to enhance their market entry strategy and avoid costly mistakes.
This PPT slide focuses on the critical aspect of market size estimation, emphasizing the need to mitigate biases that can distort decision-making. It begins by outlining 2 common biases: the "Optimism" bias and the "Anchoring and Adjustment" bias. The Optimism bias refers to the tendency of individuals to favor positive outcomes, leading to overly optimistic market size estimates. This can result in unrealistic expectations for growth potential. The Anchoring and Adjustment bias highlights how initial values can unduly influence subsequent estimates, often causing firms to overlook changes in market dynamics.
The slide then transitions to recommendations aimed at improving the accuracy of market size estimations. It advises companies to avoid anchoring assumptions based on current growth rates, which may not be sustainable over time. Instead, firms should conduct a thorough analysis of the lifecycle stage of the business they intend to enter. Understanding this lifecycle is crucial, as it can reveal the limitations of relying on current growth figures and help identify more realistic projections.
Additionally, the slide suggests that companies can enhance their market size estimates by using benchmarks from other entrants in the market. This approach can provide a more grounded perspective and assist in setting achievable targets. Overall, the content underscores the importance of a disciplined approach to market estimation, which is essential for informed strategic decisions. By recognizing and addressing cognitive biases, executives can better navigate the complexities of market entry and capitalize on opportunities with greater confidence.
This PPT slide provides an overview of cognitive biases that affect decision-making in business contexts. It begins by acknowledging that all humans possess biases, which can lead to deviations from rational decision-making processes. The text distinguishes between 2 primary types of biases: cognitive and emotional. Cognitive biases are attributed to incomplete information or the inability to effectively analyze available data.
The slide categorizes these biases into 2 groups: Belief Persistence and Processing Errors. Belief Persistence refers to the tendency of individuals to reject cognitive disagreement, which can create conflicts when new information contradicts existing beliefs. Processing Errors occur when there is a failure to organize, compute, or analyze data correctly.
The slide also lists the nine most common cognitive biases, which are visually represented around a central figure. These include Framing Bias, Conservatism Bias, Base Rate Neglect, Confirmation Bias, Sample Size Neglect, Hindsight Bias, Anchoring and Adjustment, Mental Accounting, and Availability Bias. Each of these biases can significantly influence business decisions, often leading to suboptimal outcomes.
Understanding these biases is crucial for executives and decision-makers. By recognizing the potential pitfalls associated with cognitive biases, organizations can implement strategies to mitigate their effects. This awareness can enhance decision-making processes, ultimately leading to more effective and informed business strategies. The slide serves as a foundational reference for those looking to improve their decision-making framework by addressing inherent biases.
Cognitive biases significantly hinder executives' ability to make informed decisions. This PPT slide outlines 5 core issues that leaders should address to mitigate these biases. It emphasizes the importance of recognizing biases, implementing rigorous decision-making processes, and enhancing market analysis.
The central graphic identifies 5 specific areas where biases can impact decision-making: Value Proposition and Capabilities, Market Size, Competition, Market Share and Revenue, and Costs. Each of these areas represents a critical aspect of strategic planning that can be distorted by cognitive biases. For instance, an executive's perception of market size may be skewed by overconfidence or anchoring effects, leading to flawed market entry strategies.
The slide suggests that organizations can improve their decision-making success by confronting these biases head-on. Educating decision-makers about the existence and effects of biases is crucial. This education can empower them to recognize when biases may be influencing their judgments. Furthermore, establishing stringent decision-making processes can help create a structured environment that minimizes the impact of these biases.
Conducting thorough market analysis is also highlighted as a key strategy. By relying on data-driven insights rather than subjective perceptions, organizations can make more rational decisions. The slide concludes with a reminder that biases are inherent to human nature and influenced by behavior, training, and culture. Addressing these biases is not just about improving decision-making, but also about fostering a more rational organizational culture.
This PPT slide addresses a critical issue in market entry strategy, focusing on the need to anticipate both market share and revenue expectations. It highlights a common cognitive bias known as the "brick wall effect," where companies fail to consider how existing competitors might react to new entrants. This oversight can lead to unrealistic assumptions about market dynamics and potential revenue generation.
The left side of the slide outlines the common biases that companies face. It emphasizes that firms often believe competitors will not alter their pricing, product offerings, or strategies in response to new competition. This narrow focus on current competitors can blind companies to the broader market landscape, which includes potential shifts in behavior from established players.
On the right side, the slide provides actionable recommendations to mitigate these biases. One suggested approach is to conduct role-playing exercises that simulate competitor responses. This method encourages executives to think critically about how existing players might react, allowing for more informed decision-making regarding entry strategies. Additionally, using a reference class can help set realistic expectations for market share estimates, ensuring that companies do not overestimate their potential success.
Overall, the slide serves as a reminder that understanding competitor behavior is essential for effective market entry. Companies that neglect this aspect risk misjudging their position and facing unexpected challenges. The insights provided can help organizations refine their strategies and improve their chances of success in new markets.
This PPT slide addresses the significant impact of cognitive biases on market entry decisions. It highlights that for every successful market entry, there are 4 failures, primarily due to various factors such as timing, scale, competition, and capabilities. The text emphasizes that cognitive biases lead to systematic errors in how executives process information, which can severely distort their judgment.
Executives often rely on intuition and internal perspectives when making critical decisions. This reliance can be misleading, as it prevents them from considering external market conditions and previous experiences. The slide points out that cognitive biases can warp perceptions regarding a firm's capabilities, the potential market size, and the competitive environment. This distortion can lead to flawed judgments that have substantial financial consequences.
Two case studies illustrate these points. The first example discusses Anheuser-Busch's attempt to enter the snack food market, where they underestimated the competitive threat from Frito-Lay. This miscalculation resulted in a failed market entry. The second example involves EMI, which overestimated its ability to compete in the CAT scanner market while underestimating the strengths of established competitors like GE and Siemens. Both cases serve as cautionary tales about the dangers of cognitive biases in strategic decision-making.
The concluding statement reinforces that cognitive biases can undermine planning and decision-making processes, urging executives to adopt a more analytical approach to market entry analysis. This slide serves as a critical reminder for decision-makers to recognize and mitigate the influence of cognitive biases in their strategic planning.
This PPT slide outlines 6 critical factors that companies should consider when entering new markets. Each factor serves as a predictor of market entry success, providing a framework for strategic decision-making.
The first factor is the "Size of Entry Relative to Minimum Efficient Scale." This suggests that companies entering closer to the minimum efficient scale of an industry are more likely to succeed. It implies that entering below this threshold may require rapid scaling to test market viability, which can be risky.
Next, the "Relatedness of the Market Entered" emphasizes the importance of leveraging existing portfolios. Companies with relevant assets have better chances of success,, but they must evaluate how closely related their current offerings are to the new market.
The third factor, "Complementary Assets," highlights the significance of marketing and distribution capabilities over core assets like engineering. This suggests that successful market entry often hinges on effective support systems rather than just product innovation.
The "Order of Entry" factor discusses the dynamics of market timing. While first movers can gain advantages, established players diversifying into new markets may outperform them. This indicates that timing and market experience are crucial.
The "Industry Lifecycle Stage" factor points out that entering early in the lifecycle increases the likelihood of success. Companies should be aware of the stage they are entering to align their strategies accordingly.
Lastly, "Degree of Technological Innovation" notes that industries requiring significant inside knowledge can favor incumbents. New entrants may find opportunities in niche markets overlooked by larger players, suggesting a need for strategic differentiation.
These insights collectively guide companies in making informed market entry decisions, emphasizing the importance of strategic alignment with these 6 factors.
This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
For $10.00 more, you can download this document plus 2 more FlevyPro documents. That's just $13 each.
ABOUT FLEVYPRO
This document is part of the FlevyPro Library, a curated knowledge base of documents for our FlevyPro subscribers.
FlevyPro is a subscription service for on-demand business frameworks and analysis tools. FlevyPro subscribers receive access to an exclusive library of curated business documents—business framework primers, presentation templates, Lean Six Sigma tools, and more—among other exclusive benefits.
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.
Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
Read Customer Testimonials
"FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The
quality of the decks available allows me to punch way above my weight – it's like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.
"
– Roderick Cameron, Founding Partner at SGFE Ltd
"I like your product. I'm frequently designing PowerPoint presentations for my company and your product has given me so many great ideas on the use of charts, layouts, tools, and frameworks. I really think the templates are a valuable asset to the job."
– Roberto Fuentes Martinez, Senior Executive Director at Technology Transformation Advisory
"Last Sunday morning, I was diligently working on an important presentation for a client and found myself in need of additional content and suitable templates for various types of graphics. Flevy.com proved to be a treasure trove for both content and design at a reasonable price, considering the time I
saved. I encountered a download issue during the ordering process. However, a quick email to Flevy's support team, even on a Sunday (!!!), resulted in assistance within less than an hour, allowing me to download the content I needed. Fantastic job, Flevy! I give 5 stars for both content/price and customer service. Thank you!
"
– M. E., Chief Commercial Officer, International Logistics Service Provider
"Flevy.com has proven to be an invaluable resource library to our Independent Management Consultancy, supporting and enabling us to better serve our enterprise clients.
The value derived from our [FlevyPro] subscription in terms of the business it has helped to gain far exceeds the investment made, making a subscription a no-brainer for any growing consultancy – or in-house strategy team."
– Dean Carlton, Chief Transformation Officer, Global Village Transformations Pty Ltd.
"Flevy is now a part of my business routine. I visit Flevy at least 3 times each month.
Flevy has become my preferred learning source, because what it provides is practical, current, and useful in this era where the business world is being rewritten.
many challenges and there is the need to make the right decisions in a short time, with so much scattered information, we are fortunate to have Flevy. Flevy investigates, selects, and puts at our disposal the best of the best to help us be successful in our work.
"
– Omar Hernán Montes Parra, CEO at Quantum SFE
"As a consulting firm, we had been creating subject matter training materials for our people and found the excellent materials on Flevy, which saved us 100's of hours of re-creating what already exists on the Flevy materials we purchased."
– Michael Evans, Managing Director at Newport LLC
"If you are looking for great resources to save time with your business presentations, Flevy is truly a value-added resource. Flevy has done all the work for you and we will continue to utilize Flevy as a source to extract up-to-date information and data for our virtual and onsite presentations!"
– Debbi Saffo, President at The NiKhar Group
"As a consultant requiring up to date and professional material that will be of value and use to my clients, I find Flevy a very reliable resource.
The variety and quality of material available through Flevy offers a very useful and commanding source for information. Using Flevy saves me time, enhances my expertise and ends up being a good decision."
Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S, Balanced Scorecard, Disruptive Innovation, BCG Curve, and many more.
Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S, Balanced Scorecard, Disruptive Innovation, BCG Curve, and many more.
Click main image to view in full screen.
