The benefits of a wave strategy for market entry as oppose to a sprinkler or waterfall strategy.
When it comes to entering new markets, businesses often have to make important decisions on how to approach the market. Three common market entry strategies are the wave strategy, sprinkler strategy, and waterfall strategy. While each of these strategies has its advantages and disadvantages, the wave strategy stands out as the most effective and efficient approach for businesses to enter new markets. In this article, Robin Buxton, a market entry expert at Evestico will explore the benefits of a wave strategy and why it is the preferred market entry strategy for businesses.
First and foremost, the wave strategy allows businesses to enter a new market in a controlled and calculated manner. Rather than diving into the market headfirst, businesses can enter the market in waves, starting with a small entry point and gradually increasing their presence as they gain a better understanding of the market. This approach allows businesses to assess the market’s demand and competition, adjust their strategy accordingly, and minimise risks associated with market entry.
Additionally, the wave strategy enables businesses to take advantage of the economies of scale. By starting with a small entry point, businesses can test the waters and determine the most efficient and effective way to expand their operations in the new market. As they gain more experience and knowledge about the market, they can gradually increase their presence and scale their operations, allowing them to take advantage of the economies of scale and reduce costs associated with market entry.
Another benefit of the wave strategy is that it allows businesses to establish a strong brand reputation in the new market gradually. By starting with a small entry point, businesses can focus on building strong relationships with their customers and stakeholders, providing high-quality products and services, and ensuring customer satisfaction. As they gradually increase their presence in the market, they can continue to build on their reputation, establish themselves as a trusted brand, and differentiate themselves from the competition.
Compared to the wave strategy, the sprinkler strategy involves launching a broad-based marketing campaign and saturating the market with the company’s products or services. While the sprinkler strategy may seem like a more aggressive approach to market entry, it can be costly and difficult to sustain. By launching a broad-based marketing campaign, businesses risk spreading themselves too thin and diluting their brand message. Moreover, the sprinkler strategy does not allow businesses to test the waters and assess the market’s demand and competition before expanding their operations.
The waterfall strategy, on the other hand, involves launching the company’s products or services in one go and saturating the market with a large influx of offerings. While this approach can generate quick revenue, it can be difficult to sustain in the long run. By saturating the market with a large influx of offerings, businesses risk oversupplying the market and driving down prices, resulting in lower profit margins. Additionally, the waterfall strategy does not allow businesses to test the waters and assess the market’s demand and competition before expanding their operations.
In contrast, the wave strategy allows businesses to enter the market in a controlled and calculated manner, taking advantage of the economies of scale, and establishing a strong brand reputation gradually. By starting with a small entry point, businesses can minimise the risks associated with market entry, test the waters and assess the market’s demand and competition, and adjust their strategy accordingly. Additionally, the wave strategy allows businesses to scale their operations efficiently, take advantage of the economies of scale, and establish a strong brand reputation in the new market gradually.
In short, the wave strategy is the preferred market entry strategy for businesses looking to expand their operations into new markets. By entering the market in a controlled and calculated manner, taking advantage of the economies of scale, and establishing a strong brand reputation gradually, businesses can minimise the risks associated with market entry, scale their operations efficiently, and differentiate themselves from the competition. While the sprinkler and waterfall strategies may seem like more aggressive approaches to market entry, they can be costly and difficult to sustain.
If you you’d like to know more about how Evestico can help you with your market entry plans, read about our market entry services here. or if your are not quite ready, simply follow our company page on LinkedIn.
