A European company specialising in biostimulants were looking to branch out to new markets to ensure larger revenues and to consolidate their organisation.
A European company specialising in biostimulants were looking to expand their area of coverage to new regions. They had established a secure customer base in their own country, but were aiming to branch out to new markets to ensure larger revenues and to consolidate their organisation in one of the leaders in sustainable crop protection. They approached Challenge Advisory to assist their new market entry efforts.
The Challenge Advisory agriculture team, alongside the new market entry team, set out to identify suitable markets for the client to expand to. To assess suitability, the teams underwent extensive research of the agricultural sector in order to understand the opportunities and challenges in the crop protection sector, and aligned these with the client’s strengths and weaknesses to pinpoint a market area that would be extremely suitable for the client.
Challenge Advisory identified two markets that would be the most suitable for the client’s particular organisation; one in Eastern Asia and one in South America. In each of these countries, Challenge Advisory made the client aware of the opportunities available in each region, as well as the potential dangers of the chosen markets, and allowed the client to formulate their own views and opinions on each of the markets. At this point, the client mentioned their preference for a market in a secure political environment, and this led them to choose the East Asian nation as a market to develop their revenue.
Once the client had chosen the market to enter, Challenge Advisory’s agriculture and strategy teams worked to facilitate their entry into this market. They arranged meetings for the client with the government in that region, who provided the client with finanicial incentives to enter their market.The client was also introduced to many local agricultural organisations, who enabled a smooth integration into the foreign supply chain. Finally, Challenge Advisory acted as an intermediary to the discussions that took place between the client and the foreign government, advising them on correct customs, and helping them to build a team that would have the most positive effect in the region.
Although growth in the first year was slow, the time taken to establish themselves in this new Asian market proved beneficial, and the relationships formed in the communciation phase of this market entry served the client well as they achieved significant growth in their fifth and sixth quarters. Their second year saw revenues of over $200 million USD, and they are projected to surpass these numbers in their third year.
Due to their success in their first market entry strategy, they expect to undertake another expansion in the next two to three years.