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Limited Market Size and Growth

By Edited Dec 30, 2015 0 0

Companies of all sizes have to face the challenge of determining the limitations and the potential of their markets especially when doing business in a foreign country. It is crucial to perform a thorough market research considering demographics (e.g., aging, baby boomers, local income), psychographic trends (e.g., increased health consciousness), past sales trends and consumption rates, price movements, competitor brand shares, new product development.

Walt Disney is one of the most successful companies of all times and despite all the successes, the company has faced some level of difficulty on its journeys. In 1992-1994 Walt Disney started exploring the European territories launching Euro Disney in France. The company had $3 billion in debt and was on the verge of bankruptcy as business was not giving the expected results due to the economic recession and to resistance from its local market.

Walt Disney had to restructure its business model, assessing its limitations and expanding growth by accommodating the needs and preferences of its local public (by serving alcohol, as an example). It is important for companies like Walt Disney to be sensitive to the local responsiveness, tailoring its business model, system, and products to meet the needs of a specific national market. By understanding the market an International Manager will be able to assess it capabilities and difficulties and he/she will be able to find innovative ways to overcome the problem.


Opening a new business will require a very good mapping of the surroundings to evaluate the possible competition and how much of threat they are facing. Many companies have failed internationally because they underestimated their competition. For instance, Kellogg's is an example of a company that pushed breakfast cereal consumption to a population accustomed to warm breakfasts which include everything but cereal. The result caused losses in the millions of dollars. The company did everything they usually did while entering new markets without realizing that they were about to enter an emerging economy with strong cultural roots and essentially a very low-priced breakfast Industry competition which included Hot milk, Idli, Dosa, Vadaa, Bread & Spread, etc depending on the various regions.

Barnes & Nobles was founded in 1917 and by 1987 it was a national chain in the United States. Barnes & Nobles offers a great selection of books and music in spacious stores complete with cafes that sells Starbucks coffee. It has become a destination for people, a sort of town meeting place. This innovative concept of urban superstore generated 96% of Barnes & Nobles retail sales. Barnes & Nobles has a great business model providing value to its customers and increasing profits though competitive advantage.



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