Market Entry Framework: How to Use It + Consulting Case Example

Market Entry Case. This image shows two consultants discussing pie charts and line charts posted on a conference room wall.
Rebecca Smith-Allen
Rebecca Smith-Allen

Former McKinsey Engagement Manager

Company X wants to know if they can profitably introduce their widget to the Chinese market.

Company Y wants to leverage its knowledge of the North American fast-food market to introduce a new restaurant format. How should they do it and how long will it take to reach profitability?

Have you read case interview examples that sound like these?

Of course you have, because all successful businesses want to become more successful by expanding into new markets, so there are many case interview questions on this topic.

Because of this, it’s important that you have a thorough understanding of the market entry case framework.

We’ve got you covered!

In this article, we’ll:

  • Discuss market entry case interview,
  • Break down the market entry framework into 4 easy steps,
  • Provide an example of a market entry case,
  • Provide tips on using the market entry case framework, and 
  • Point to additional resources to help you with the market entry framework and cases.


Let’s get started!

What is a Market Entry Case Interview?

Our Ultimate Guide to Case Interview Prep goes through everything you need to know about consulting case interviews and how to pass them, so if you have general questions, that’s the best place to turn.

But if you’re ready to move on to market entry cases, read on. 

If you’re asked a market entry case question, there’s a lot of information you’ll need to cover. You’ll be better prepared if you practice this type of case.

A market entry case starts with a company deciding to enter a new market.

  • They could sell a new product into an existing market. Example: Netflix produces its own content to air over its existing streaming service.
  • Or they could take an existing product to a new geography. Example: Starbucks enters the Chinese market.


Whether a company is contemplating entering a new geography or a new product-space, the decision is a big one. The CEO will face complicated questions like:

  • Is the market profitable?
  • Does the company have the skills needed to compete in the new market?
  • Does it have the financial resources needed to successfully enter the market?
  • Should the company create the capabilities to enter the new market in-house? Buy a company already competing in the market? Form a joint venture with another company?
  • What regulatory hurdles might they face?


The high stakes and complexity of market entry decisions are the reason corporate executives facing these decisions often turn to consultants for help.

Breaking Down The Market Entry Framework Into 4 Easy Steps

Market Entry Case Framework. This infographic shows the 4 steps in the

Step 1: Assess the Target Market

Assessing the market is step 1 in the market entry framework because if the new market isn’t profitable (or won’t be profitable in the future), there’s no point in going further with this case.

Questions to ask during the assessment of the target market include:

  • What is the size of the market in terms of revenue?
  • What is the market’s growth rate?
  • What is the profit margin on sales in the market?
  • What share of the market would the client need to break even? Become profitable?

Step 2: Assess the Client’s Capabilities

Questions to ask during the assessment of the client’s capabilities include:

  • Does the client have the capabilities needed to make the new product or provide the new service? (new product market entry) 
    • Do they have the technical skills?
    • Is their cost structure competitive?
    • Do they have the necessary sales or distribution channels?
    • Can they get whatever capabilities they currently lack?
    • Are there barriers to entering the market?
  • Does the client have an understanding of how to compete in the new market? (geographic market entry)
    • Do they understand the customer segments in the new market?
    • Can they tailor the product or service to the requirements in the new market so they can compete effectively?
    • What government regulations will be encountered?

Step 3: Analyze Client Resources Relative to the Investment Needs & Expected ROI

Questions to ask while analyzing the client’s resources relative to the cost of market entry and expected ROI:

  • What fixed costs will be required to enter the market? 
    • Research & development
    • Manufacturing & warehouse capacity
    • Marketing launch & sales/distribution
  • How long will it take to pay back the company’s initial investment?
  • Does the company have or can it raise the required capital?

Step 4: IF Conditions for Market Entry Are Good, Then Determine the Market Entry Strategy

You’ve decided the client in your market entry case should enter the market. 

Again, the decision of whether to enter the new market is only part of the answer. The company must decide how to enter it.

 For product or service market entry, they should ask whether they should:

    • Create the capability to build the new product or provide the new service in-house?
    • Partner with someone already in the market?
    • Buy or license intellectual property?

 For geographic expansions they need to ask whether they should:

  •         Export to the new market from their home country?
  •         Build a greenfield presence in the new country?
  •         Partner with a company that already has a presence in the target market?
  •         License their brand to franchisees?

 Questions to ask when determining the best entry strategy:

  • Are there barriers to entry in the market? Intellectual property? Regulatory approval?
  • Can the company overcome these barriers on their own or will they need to partner to do so?
  • How important is timing? Is there an advantage to early market entrants? How fast do they need to have a product in the market to win?
  • Will partnering allow the company to enter significantly faster than building capacity in-house?

Example of The Market Entry Framework: KFC Enters China

market entry case framework. This image shows two consultants reading bar graphs and pie charts while discussing a client case.

Today, KFC has over 5,000 fast-food restaurants in China. It’s the most popular fast-food chain in the country. 

How did the company enter the market to achieve this success?

When KFC first entered the China market, the success of southern-style American fried chicken in the China market was no guarantee.

The restaurant needed to transfer its successful North-American business model to the new market. 

But it also needed to take into account different consumer tastes, find promotional advertising that would appeal to the Chinese consumer, deal with regulations that required that Western companies to partner with Chinese-owned companies in order to enter the market, and more.

Let’s look through the KFC China example using the market entry framework.

Step 1: Assess the Target Market

Yum! Brands first entered the China market in 1987. At that time, the China market was growing quickly. The country’s middle class was expanding and was receptive to western brands.

The Chinese restaurant market was dominated by a large number of street vendors and small, family-owned, single-location restaurants.

In comparison, growth in the North American market was slowing and there was a high level of competition from McDonald’s, Burger King, Wendy’s, Domino’s Pizza, and other restaurants.

The Chinese market provided an opportunity to enter a market without well-entrenched national chains of fast-food restaurants and capitalize on the market’s growth.

Step 2: Assess the Client’s Capabilities

KFC was positioned as the second-largest fast-food chain in the U.S. by number of stores. It had a winning formula of providing high-quality food at a competitive price and marketing it well.

But KFC knew nothing about the China market. 

The company had to answer important questions like:

  • How to tailor their menu to Chinese tastes?
  • What segment of the market to target?
  • Where to locate their restaurants?
  • How to develop a supply chain in the country?


The challenge facing KFC can be seen by the fact that when they first entered the market, their popular slogan “finger lickin’ good” was mistranslated as “eat your fingers off.”

Gaining insight into the Chinese consumer was a critical hurdle to success in this market. 

At that time, western companies had little experience with dealing in the Chinese communist government. But because the government required western companies to enter the market through joint ventures with Chinese-owned companies, KFC knew they would find help with these decisions by finding the right partner.

Step 3: Analyze Client Resources Relative to the Investment Needs & Expected ROI

KFC considered entering the China market to be an important strategic investment to maintain its revenue and store growth despite high levels of competition in the North American market. 

Their success in North American meant they could allocate substantial funds to the market entry in China despite the fact that it would take years for their investment to pay off.

Step 4: IF Conditions for Market Entry Are Good, Then Determine the Market Entry Strategy 

As mentioned above, KFC was required to partner with a Chinese-owned company. They found a partner that had strong connections with the Communist government to ensure that they would be able to overcome regulatory problems.

Their partner also helped KFC to identify its target market as the middle-class consumer who was interested in western culture. Their sit-down restaurants had a reputation for cleanliness which helped to set KFC apart. 

In the early days, KFC restaurants also leveraged the fact that they were a unique and exciting experience, a view into American culture. 

KFC China’s menu includes many items an American customer would not be familiar with, such as lotus roots, congee, and soy sauce wings.

The restaurant had a 40-page menu because of the Chinese consumer’s preference for variety.

Their promotion was tailored to focus on elements that the local culture valued, such as respect, love, and support for the elderly.

The chain’s success in China depends not only on the taste of its food and its advertising, but also on the speed and convenience of its service. These attributes were as important to winning in the China market as tasty chicken.

Yum China has been so successful that it has been spun off from YUM! Brands as separately listed stock on the New York Stock Exchange.

Tips On Using The Market Entry Case Framework

Market entry case. this image shows a consultant working in an office with graphs on multiple PC screens.

1. Look for market entry cases buried inside other types of case study interviews.

If a company is looking for growth, market entry is one way they might achieve it, so your revenue growth case could turn into a market entry case.

2. Ask your interviewer questions and take good notes on their answers.

Market entry cases require a lot of data–market growth, cost of entry, client capabilities. You’re likely to miss important information if you try to solve the case just through brainstorming and your own knowledge of the industry. Don’t be afraid to ask questions.

3. Don’t only consider whether the target market is attractive.

Look at all 4 elements of the market entry framework. Entering an attractive market without the right capabilities will lead to substantial losses and a CEO being fired.

4. Identify alternative market entry strategies and evaluate one relative to another.

For example, compare the advantages of a greenfield operation (full control over the business model and quality) versus partnering with a company with a presence in the local market (knowledge of the local consumer, speed). The comparison of one entry strategy to another can make the best choice clear quickly.

Additional Resources to Help You With the Market Entry Framework and Cases

This McKinsey article: Beating the Odds in Market Entry is a great resource for those who want to dig deeper on this subject.

In this article, we’ve covered:

  • What market entry case interview looks like,
  • Breaking down the market entry framework into 4 easy steps,
  • A market entry case example, 
  • Tips on using the market entry case framework, and 
  • Additional resources to help you with the market entry framework and cases.


Still have questions?

 

If you have more questions about the market entry framework, leave them in the comments below. One of My Consulting Offer’s case coaches will answer them.

Other people prepping for market entry case interviews found the following pages helpful: 

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