Market Entry Barriers in Germany – What they mean and why they matter
Market Entry Barriers in Germany stand between you and your product´s success in the target market. When people in Germany start evaluating your product, it boils down to two questions: Will any organization buy it and will the people use your product? One of the common models is the AIDA model, which ranges from awareness to interest, then desire to action. You have used this process a hundred times and obviously did this exercise in your home market successfully to overcome the known market entry barriers. For several reasons, this doesn´t mean much when you are trying to approach new markets that come with an own culture.
If for whatever reason, nothing happens in your new target market your journey may end before it really started. This is key to the success of any product or service to find it´s position on the market map. With any new market map that´s not exactly the same as it is in your home market, you have to re-think whom you are considering as an ideal customer, as an ideal partner or consider being your most aggressive competitor.
Working with a local go-to-market specialist will give you access to local insights in form of target market know-how and unbiased expert feedback. And as any bait has to appeal to the fish, not the fisherman, you should focus on your target customers in the new region.
People hate change
People, as well as organizations, don´t like to change the way how and with whom they do business. Especially, they hate to deal with foreigners under new terms and conditions. You may choose, whether it´s just stupid or arrogant to ignore these facts. The truth is: If you enter a new market without any preparation – you will probably lose money. That´s a safe bet. Better check the return on investment of involving a local expert.
Reasons For Doing Nothing are true innovation killers.
These are the dominant Market Entry Barriers in Germany
- The Cognitive Hurdle: Organisations and employees historically have grown comfortable with the status quo.
- The Resource Hurdle: The greater the shift in strategy, the greater the resources it requires for execution
- The Motivational Hurdle: How to motivate key players to move fast and tenaciously to carry out a break from the status quo?
- The Political Hurdle: How to overcome opposition from powerful vested interests
Fight these barriers with "Fair Process."
Fair process is a concept developed by W. Chan Kim and Renée Mauborgne that builds execution into the strategy by creating people’s buy-in up front. If the fair process is exercised in the strategy formulation phase, people trust that a level playing field exists, inspiring voluntary cooperation during the execution phase. Research has shown that people care not only about outcomes but also about the process that produces these results. For a decision process to be seen as fair, the people affected must have the opportunity to give input and possibly to influence the decision, and the decision process and rationale must be transparent and clear. Existing research has shown empirically that fair process enhances both employee motivation and performance in execution.
Whether people are senior executives or shop employees, they all look to these elements.
How does Fair-Process overcome Market Entry Barriers in Germany?
Three mutually reinforcing elements inspire cooperation and define the fair process because people trust that a level playing field exists.:
- Explanation, and
- Clarity of expectation
Fair Process establishes stakeholder buy-in up front.
How to identify stakeholders in a new market?
It´s a waste of time and budget to enter the German market without a plan (so, that´s no option). Better connect with a local expert who knows, what he´s doing. While you may try different value propositions in B2C, that´s hardly an option in B2B (because of implementation efforts). An investment in premium research like our pays if your business has a significant business potential, as we help to understand the target market dynamics within the new region. We identify key stakeholders and accessible customer segments.
- Identify buying centers, their key players, and hidden agendas,
- Work with these individuals with a fair process minded attitude,
- Identify organizational dynamics and the ones open for business.