CAPTURING THE ASEAN MARKET


The combined economic potential of ASEAN makes the region equivalent, in economic terms, to the world’s seventh largest economy:
  • a combined land area of 4.46 million square kilometres, larger than the EU
  • a combined GDP of US$2.4 trillion, larger than the BRICs ex China
  • a population of 620 million, twice as large as the United States
  • combined cumulative growth rate of 10.2% in nominal GDP from 5 years to 2014.
Their scale and growth make the ASEAN markets highly attractive for market entry in many sectors.
Formulating your market entry strategy
Formulating a successful market entry strategy for any or all of the ASEAN markets requires a consideration of at least the following questions:
  • what are the company’s strategic aims for the region?
  • is the market attractive?
  • can the company compete in this market? What are the chances of success?
  • where should the company play?
  • how does the company win? What is the business case?
An evaluation framework


The starting point of any effective market entry strategy should be to articulate the company’s financial and strategic objectives in order to guide market selection.
  • Financial goals and constraints, considering investor, corporate and business requirements.
  • Vision, mission and values. Why are we here as a company, and what are our fundamental values that must be respected?
  • Strategic priorities and commitments, past and present.


The ASEAN markets vary massively in size, wealth, growth, cultural and political environments. Their high diversity highlights the importance of setting an evaluation framework that reflects the company’s strategic aims. Developing a short list of markets requires an assessment of such factors as:
  • market size and growth
  • barriers to entry
  • country risks
  • industry structure and competitive landscape
  • regulation
The precise factors and their relative weighting would be guided by the company’s strategic aims and constraints. For example, are there markets that are sub-scale and will not provide the incremental contribution to revenue that the company is seeking by coming to ASEAN? Will the company consider entering markets where it can only enter via joint venture with a local partner, as in the financial sector of many emerging markets in ASEAN, or does it need a controlling stake?



An internal capability assessment is critical to determine areas of competitive advantage, or where the company could add value. It should also involve a realistic assessment of the company’s ability to operate in the markets of interest. These internal factors, specific to the company, include:
  • Digestibility
    What is the size of the industry relative to the company’s own operations and aspirations? For example, if the company has an aspiration to be top three in every market in which it operates, can it realistically deploy the capital to achieve this?
  • Capability
    Does the company have the capability to deploy into markets of interest or will it need to hire in the market? Is there available talent?
  • Proximity
    How close is the market to the company’s own culture and language? Are there significant barriers which would hinder the ability to operate in that market?


Market selection requires the application of the company’s strategic aims in ASEAN through to the market attractiveness and prospects for success in the markets of interest in ASEAN.

One way to do this is to develop screening filters comprised of agreed selection criteria and relative weightings. These are then applied to markets of interest to develop long and short lists. In our experience, this process is highly iterative. The selection criteria and weighting of these criteria is a product of both objective data and subjective assessments by advisors and management and requires refinement as the process unfolds. Validating the market opportunity in shortlisted markets also requires a detailed consideration of the market segments in order to define the business case for market entry. Strategic questions will include:
  • what are the dynamics shaping the industry? Can we challenge the current industry structure to create new sources of value?
  • are potential future shifts in value creation expected across the value chain or competitors?
  • which market segments are emerging or maturing?
  • are there underserved market segments?
  • what drives competitive advantage today? What do we expect it to be in the future?
  • what is the company’s competitive position and where should it focus in order to drive growth?


The development and refinement of a business case requires defining the target markets, propositions and products and clients and channels by which the company will go to market in selected ASEAN countries.

In addition, the company will need to define its structure for market entry. It could be through the acquisition of a firm in the market, either in part or whole depending upon foreign investment regulations, an alliance or joint venture with a local partner or establishing new Greenfield operations. Partner selection will be through a selection and risk assessment process and an investment will require a detailed review of available acquisition targets and some level of due diligence.


Case study
Recently KPMG worked with a European insurer on the development of a digital market entry strategy for ASEAN and selected countries in the Asia Pacific.

The team, comprising customer & growth and insurance subject matter experts from the advisory practice in KPMG in Singapore, developed an evaluation framework to identify a prioritised list of countries. Market attractiveness, chance of success and digital consumption potential by market were key considerations.

The client feedback was highly positive, suggesting that the process challenged existing hypotheses and provided an additional dimension of thinking for the management team, thereby leading to a strengthened strategic outcome and business case.

The 9 levers of value framework
KPMG has developed a proprietary framework for the development of transformational strategy through to execution. We call it the 9 Levers of Value. This framework provides a holistic framework to study a market, or a business, and we use this framework, and its models, to drive our approach to market entry strategy development. The 9 Levers are:
  • financial ambition
  • markets
  • propositions and Brands
  • clients and Channels
  • core Business Processes
  • operational Infrastructure and Technology
  • organisational structure, Governance and Controls
  • people and Culture
  • measures and Incentives
Setting successful market entry strategy would take all of these levers into account, with a weighting to the first half since they shape the business model and business case for the business.

KPMG can help your company formulate a market entry strategy for ASEAN
Globally, KPMG employs more than 162,000 professional including more than 9,000 partners in 155 countries. Our offices in ASEAN are staffed by 8,600 professionals and 300 partners, serving all major industry sectors in the region. Our Strategy, Deal Advisory, Management Consulting, Risk Consulting and Tax teams have extensive experience in market entry analysis, structuring and planning.

With its deep local knowledge, technical insight and expertise and collaborative working approach across the region, KPMG is ideally placed to help your company formulate a market entry strategy in ASEAN.
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