ChatGPT Experiment

Generative AI is revolutionising international business expansion. Let's run a quick experiment to assess the value of using ChatGPT to generate market entry strategy guidance.

ChatGPT Experiment: Market Entry Strategy Guidance

By Greg Rogers, Founder, MarketEntryLeaders.com

Generative AI is revolutionising the business landscape - one significant application is in global expansion where AI can help to dramatically increase the likelihood of successful market entry.

Introduction

Generative AI is revolutionising the business landscape, offering innovative tools for leaders to enhance various strategic initiatives. One significant application is in global expansion, where AI can help to dramatically increase the likelihood of successful market entry.

The arrival of this disruptive technology has attracted significant controversy due to concerns about misuse, data inaccuracy, hallucination and data overwhelm but the opportunity to harness AI to increase performance and to generate value is remarkable if deployed responsibly and creatively.

This article outlines five market entry strategy related insights:

Research on the benefits and challenge of international expansion
Reflections on the significance of CEO influence in market entry strategy
Four ChatGPT prompts to help you generate strategic guidance
An overview of the free-to-use AI strategy tools available at MarketEntryLeaders.com
Conclusions on the value of using AI to generate customised strategy guidance.

It is written for a scaleup CEO considering the benefits and challenges associated with global expansion. The insights contained in this article will also assist business advisers at trade and investment agencies, chambers of commerce, business accelerators and other support organsiations.

Research on the Benefits and Challenge of International Expansion

Many scaleup founders and CEOs aspire to accelerate growth by expanding into new international markets, often financed by successful fundraising rounds. The allure of establishing a strong global brand presence is compelling and backed by data.

According to Startup Genome early-stage startups with more than 50% foreign customers experience revenue growth twice as fast as those with less than 50%. This statistic underscores the potential benefits of global expansion.[1]

However, research published in the Harvard Business Review highlighted that it took ten years for companies selling abroad to generate an average Return on Assets (ROA) of more than one per cent based on analysis of 20,000 companies in 30 countries.[2] This compares to companies focused on domestic growth which achieved 1+% ROA after five years.

These researchers concluded:

“Few companies have the size or management capabilities to make a success of going overseas and for most it may well be more profitable to look closer to home.”

Bain & Company research by Chris Zook concluded that only 27 per cent of adjacency moves (including geographic expansion) could be considered successful based on a study of 181 adjacency moves of major U.S. and U.K. public companies, randomly selected from 1995 to 1997.[3]

Setting up and expanding into new markets is difficult. No two markets are the same, and there are many factors to consider. It can take several years to conduct rigorous planning and start generating revenue.

Research published by Frontline Ventures based on analysis of 200+ expansions reports that US software companies expanding into Europe generally wait two to three years to hire their first European employee, six years to open their first European office and a further eighteen months before expanding to two additional European locations after founding. These timelines require understanding, commitment, and tenacity.[4]

CEO Influence and Market Entry Strategy

Successful global expansion relies on multiple factors, with leadership style being a key component. CEOs play a crucial role in market entry strategy, influencing strategic decisions, selecting expansion drivers, choosing target markets, timing entries, determining market entry models, and allocating resources.

The Frontline report closes with the following challenge to CEOs:

“Execution is critical, and requires CEO engagement and company wide prioritization. Given the size of the opportunity and the high stakes involved, CEO leadership is key. European expansion can’t be avoided or delegated. In times of adversity, the best CEOs surround themselves with experts and partners, embrace difficult decisions, and lead through action. In no place is this more important than globalizing your company.”

Every CEO or senior business leader is unique, embodying different leadership styles, strengths and weaknesses. However, prevailing one-size-fits-all market entry guidance can lead to:

Strategies misaligned with a CEO's natural strengths and leadership style.
Inefficiencies and rising costs.
Tensions within the C-suite due to conflicting leadership approaches; as well as
Confusion and ultimately failure.

These research insights raise the following question: How can a scaleup CEO or senior business leader with global expansion ambitions yet lacking experience in international market entry reduce the risk of failure and expedite successful expansion into new markets?

ChatGPT Experiment: Generate Market Entry Strategy Guidance

If you are a scaleup CEO aiming to accelerate your business growth through global expansion, consider testing these two hypotheses:

AI generated strategy toolkits can increase the chances of successful market entry by enabling users to generate valuable customised strategic insights.
Strong alignment between market entry strategy and the leadership style of a CEO increases the probability of successful market entry.

Let’s run a quick experiment to assess the validity of these two hypotheses. Sign in to ChatGPT. It’s free. Copy and submit the below four prompts one at a time into ChatGPT:

PROMPT 1

“Create a five-column table illustrating the strengths, weaknesses, opportunities and threats of a CEO whose market entry strategy leadership style is characterised as risk-averse, visionary, people-oriented and adaptive.

Column 1: Leadership Characteristic

Column 2: Strength

Column 3: Weakness

Column 3: Opportunity

Column 4: Threat

This table should be informed by the below Market Entry Project Profile and Ten Market Entry Strategy Steps:

Market Entry Project Profile:

Business model: Cloud streaming platform focused on dog well-being, training and owner entertainment. Offering a freemium and advertising revenue model, it provides personalized generative AI video functionality enabling users to create movies starring their furry friends. Channel partnerships with pet brands, behaviourists and veterinarians offer exclusive content and discounts. Interactive features, AI-driven health monitoring and a mobile app enhance user engagement. Localized content, community features, data analytics, and a loyalty program add further value.
International expansion drivers: revenue growth, market diversification, access to talent and funding.
Market Entry Model - Greenfield Direct Investment functions: sales, services, R&D.
Home market: USA
Target market profile: UK

Ten Market Entry Strategy Steps: Market Research; Regulatory Analysis; Competitor Analysis; Market Segmentation; Local Partnerships; Business Plan Development; Resource Allocation; Marketing Strategy; Implementation; Monitoring and Evaluation. 25 words per cell.”

PROMPT 2

“Make this table more tailored to the Market Entry Project Profile and ten Market Entry Strategy Steps.”

PROMPT 3

“Create a four-column table for a Market Research step for a Market Entry Strategy Leaders Guide specific to this Market Entry Project Profile and bespoke to the two CEO Profiles using the following information providing suggestions for harmonising collaboration between the two different profile approaches.

Column 1: Sub-section

Column 2: CEO Profile 1 (Risk-averse, visionary, people-oriented, adaptive)

Column 3: CEO Profile 2 (Risk-tolerant, pragmatic, process-oriented, determined)

Column 4: Activities to Harmonise Collaboration between the two Profiles

Sub-sections:

Rationale: (Max of 25 words)
Objectives: (Max of 25 words)
Key Indicators: (Max of 25 words)
Key Insights: (Max of 25 words)
Tips: (Max of 25 words)
Potential Pitfalls: (Max of 25 words)
Success Factors: (Max of 25 words)
Workshop activities: (Insert 3 bullets)
Outcomes: (Insert 3 bullets)

Market Entry Project Profile:

Business model: Cloud streaming platform focused on dog well-being, training and owner entertainment. Offering a freemium and advertising revenue model, it provides personalized generative AI video functionality enabling users to create movies starring their furry friends. Channel partnerships with pet brands, behaviourists and veterinarians offer exclusive content and discounts. Interactive features, AI-driven health monitoring and a mobile app enhance user engagement. Localized content, community features, data analytics, and a loyalty program add further value.
International expansion drivers: revenue growth, market diversification, access to talent and funding.
Market Entry Model - Greenfield Direct Investment functions: sales, services, R&D.
Home market: USA
Target market profile: UK

Maximum of 25 words per table cell.”

PROMPT 4

"Make this table more insightful and tailored to the step, the two CEO Profiles and the Market Entry Project Profile.”

END OF EXPERIMENT.

What are your observations and conclusions from this experiment?

MarketEntryLeaders.com AI Strategy Tools

MarketEntryLeaders.com offers business leaders access to a free to download Market Entry Leaders AI Toolkit ChatGPT Prompt Book. This enables users to generate customised strategic insights tailored to their leadership profiles.

The Market Entry Leaders AI Toolkit is informed by four data groups:

The Market Entry Leader Profiler Assessment identifies whether a CEO or senior business leader is primarily risk averse or risk tolerant, visionary or pragmatic, people oriented or process oriented, and adaptive or determined. Each of the sixteen profiles is named after a migratory bird.
A Market Entry Project Profile which requires the user to enter their home and target markets, a short business model summary, international expansion drivers, and Greenfield Direct Investment corporate functions.
Additional Market Entry Project Profile Characteristics comprising a selection of twenty data points that generate a high degree of customization in AI output.
Ten Market Entry Strategy Steps from Market Research through to Monitoring and Evaluation.

These four data groups are used to customise an extensive range of AI prompt engineering resources – some are Market Entry Leader profile neutral, but many are profile specific.

These ChatGPT prompts generate the following outputs using a combination of text and audio outputs:

A SWOT analysis
Leadership related reasons for market entry strategy failure and success
A market entry strategy guide overview, ten step guide and workshop templates
Coaching advice and simulated coaching and C-suite interaction

Users can harness the ChatGPT mobile app voice mode prompts to generate insights from different personas such as market analysts, customers, investors, and potential hires.

One of the ChatGPT prompts generates a market entry strategy disagreement between a CEO and COO with contrasting leadership profiles. Subsequent prompts generate conflict resolution advice by a coach in text format who shares reflections via the voice mode on the experience of supporting this company. These prompts also generate reflections by the CEO and COO on the impact of this coaching. This reflexive approach will spark your imagination.

MarketEntryLeaders.com provides free access to Custom GPTs to enable users to quickly generate guidance on international business culture and market entry strategy across different models of market entry (Greenfield Direct Investment, Cross-border M&A and Cross-border Joint Ventures) and global markets. The site also provides users guidance on the responsible use of AI including specific best practice advice for generating coaching advice.

Conclusions

The efficacy of the Market Entry Leaders AI Toolkit rests on the layering of non-confidential data submitted into and generated by ChatGPT. The more data that is generated and recycled by using follow-up prompts the higher the quality of the strategic insight generated.
This can help scaleup CEOs to play to their strengths, mitigate weaknesses, enhance collaboration, save time, reduce costs, and increase the chances of success. However, this guidance is designed to support the process of strategy development and is not a substitute for detailed research, workshop discussions or accessing professional advice.
It is easy to focus on self when using profiling techniques, but it is essential to extend this understanding to C-suite colleagues’ leadership styles. This can unlock significant value by recognising and leveraging these colleagues’ strengths. Deeper mutual understanding within the C-suite can help pave the way for more constructive and effective collaboration, aligning efforts towards successful market entry.
The potential applications of ChatGPT for generating market entry strategy guidance are vast utilising text and audio outputs. The key lies in crafting precise prompts and iteratively deploying this technology throughout the strategy development process.

Contact Greg Rogers to arrange a virtual coaching session. E: info@marketentryleaders.com

About the Author

Greg Rogers founded MarketEntryLeaders.com to help scaleups harness generative AI, streamline strategy development, and enhance their chances of successful market entry. With over twenty years of experience in international trade and investment, economic development, and innovation, Greg has supported numerous C-suite clients in achieving their strategic goals.

References:

[1] Startup Genome (2023) The Scaleup Report. What Makes a Startup Succeed? Identifying Scaling Success Factors (startupgenome.com)

[2] Stadler, C. Mayer, M. and Hautz, J. (2015) Few Companies Succeed at Going Global. Harvard Business Review Magazine. https://hbr.org/2015/03/few-companies-actually-succeed-at-going-global

[3] Zook, C (2004) Beyond the Core: Expand Your Market Without Abandoning Your Roots. Bain & Company Inc.

[4] Frontline Ventures (2023) The European Expansion Report. https://frontline.vc/frontline-growth/