Project management and entering into new markets

Entering a new market is not a routine activity, such as reaching a monthly turnover or gross margin. Entering a new market implies a change; it implies getting into an area of uncertainty (not only in geographical terms); it implies the possibility to fail; it implies the need to manage expectations.

Hence it is a project activity and should be approached with the mindset, with the method and with the tools of a project manager.

Why using a project manager approach?

  • Because it allows to minimize and delay the risky investments, spending only as more certainty about the final outcome of the project is reached;
  • Because it allows to explore in advance the unmapped territory;
  • Because it allows to identify intermediate objectives and proceed only once these are achieved
  • Because it forces us to take into account all the necessary aspects (success factors);
  • Because it makes us always being ready to back down before incurring significant damage: an aircraft pilot always lands being ready to go-around, if necessary.

How does this methodology work?

Here are some principles that a good project manager always keeps in mind:

  1. The time “wasted” in the preliminary stages of study is time “earned” in the more costly implementation phase;
  2. The project is divided in subsequent analysis steps and does not move the next stage if the previous are not favorably completed (see below);
  3. All risks related to the project are managed as they emerge. I.e. action plans are ready to be activated in case things go wrong;
  4. The largest investment takes place only at the end, when positive results you are reasonably sure;
  5. Finally, the good project manager is going to use all those well-known methods, for the management of concurrent activities and resources (Gantt, Pert, etc.).

 

 

Example of a project split in four phases

  1. Design:
    (Unstructured) internal analysis phase leading to the decision to try to export to given market and to allocate an initial budget to carry out a feasibility study.
  2. Concept verification (feasibility study):
    It is a thorough check of the assumptions also locally on the market, possibly relying on external resources and experts (consultants).
    The result will be a budget and a project plan for the next stage of incubation or prototyping
  3. Incubation / prototyping:
    Initial tryout in the new market aimed at finding useful responses to decide whether and how to address the next steps, while allowing to minimize investment and commitment.
  4. Implementation:
    Finally, we know exactly what to do, how to do it and what it costs. So we can now invest with minimized risks.

Conclusions

A structured approach to project management does not ensure that the strategic plan to enter into a new market will always be successful. It ensures instead that the disasters that could result from a bad implementation, or worse, by a belated recognition of the difficulties are avoided.

More details will follow with the next newsletters.

Author: Michele Schweinöster

International manager with deep understanding of consumer durable goods and of machinery, functionally expert in the areas of service, logistics and sales.

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