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MARKET ENTRY FAILURES

Bringing a new product to market, or entering a new geographic market, can provide a company with significant growth opportunities when managed well. However, market entry can be fraught with difficulties, particularly when there is a failure to understand the vagaries of the external environment. This research considers two recent examples of market entry failure, one involving taking an existing product to a new geographic region, the other introducing new products to an existing geographic market.

Egg is an online bank based in the United Kingdom that recently expanded its operations to include France. It entered the French market with a credit card (Carte Egg) that failed to meet the company's internal expectations. Traditionally, France has proved a difficult market for financial institutions based in the United Kingdom, and Egg sought to overcome some of these problems by acquiring ZeBank in 2002. However, the acquisition failed to quell criticism of both the acquisition and the entry of the British company into the French financial market; this criticism was made vocal in French media and is considered by Egg to be one of the main reasons that the company has had difficulty in making inroads in the French market ("Egg Tumbles," 2003).

This example illustrates the failure to recognize the importance of understanding the market where a company is considering conducting business. Egg knew that English financial institutions historically had problems entering the French market successfully, but the allure of Europe's thirdlargest market was strong. Egg's only attempt to respond to problems that others had in the past was to enter the French market·in part·through acquisition. However, this failed to adequately take into account the resistance to foreign financial institutions that had been shown in the past. Thus the company was surprised when the French media did not embrace Egg's entry into the market. Indeed, a...

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MARKET ENTRY FAILURES. (1969, December 31). In LotsofEssays.com. Retrieved 05:24, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1695112.html