As a late entrant to the market or as a marginal player there are numerous and formidable challenges to contend with. Creative strategies are required to be able to achieve success and one constantly needs to be agile to spot the opportunities in the market. We believe that the latest technology trends and changes in customer outlook, accelerated over the last year, present a window of opportunity for the late entrants to go on the offensive and grow significantly ¹.

The incumbent leading companies have over time built a steady business and, in the process, erected entry barriers for new players. Even if the late entrants make initial in-roads to establish a base, it is usually limited to a niche market or attributed to favorable market conditions during that specific time or even an initial 'novelty effect' but seldom in a profitable way. The real challenge for them is to scale up their business to make this growth sustainable and profitable in the long run.

Specific to your business context, we highlight below some of the key market entry and scale up barriers that you might be facing:

• Product differentiation – Almost all global players are selling their latest range of products in the country and customers do not really perceive any significant differences in the technical features offered by them. Adding to this is the limited offer of new players who are still 'testing' the market.
• Economies of scale – The incumbent players, over their long presence in India, have produced and sold large volumes of their products aided by local manufacturing leading to lower unit costs for them.
• Demand side network effects – The brand power of the current players along with a larger installed base helps them gain continual acceptance while giving customers reassurance of their proven performance.
• Customer acquisition – Most customers are unwilling to switch to a new brand unless it offers them substantial benefits. The costs involved for them to qualify a new source or retrain their teams deters them to accept the late entrant’s offer.
• Distribution – The main distributors in the market are already partnering the established companies and have built long relationship over the years. Having now a steady business growth there is a general lack of motivation to take up new brands and invest in promoting them in the market.

So, are these challenges surmountable or is the late entrant & marginal player consigned to being only an 'also-ran' in the market? We believe that these companies can turn the situation around if they are vigilant to the discontinuities in the market. The current scenario presents such an opportunity to overcome the above barriers, improve the market position, widen the scope of play, and realize stronger growth

Some of these key opportunities that can be exploited include:

• The Technology shift and Digital transformation – Create new differentiated offers centered around connected products using various new technologies like IoT and Artificial intelligence. In addition, providing value exchange for key stakeholders through a platform strategy can have an exponential network effect.
• Customer interface model - Create better connected experiences along all touch points of the customer journey, where each stage offers numerous opportunities that can be effectively tapped using digital solutions. This includes how the customers search for products, how they select & decide as well as e-commerce solutions thereby helping companies to overcome scale and distribution challenges.
• Electricity Act 2021 amendment - To come into play this year, this amendment aims at delicensing Power distribution and allowing entry of private sector players. This will eventually lead to infrastructure upgrade and acceleration in adoption of digital solutions.