Impact of Cognitive Biases on Market Entry Decisions PPT

This PPT slide, part of the 27-slide Psychology of Market Entry Analysis PowerPoint presentation, 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 slide is part of the Psychology of Market Entry Analysis PowerPoint presentation.

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Market Research Psychology Cognitive Bias Strategic Planning Market Entry

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