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The hidden costs of entering rapid-growth markets
Source Ernst & Young
Of the many and varied costs of market entry, there are six we have identified as areas of particular concern for CFOs. In order of the reported likelihood to overspend, they are:
1. Financing costs – rising inflation and currency fluctuations
2. Mode of entry costs – choosing the right partner and accuracy of valuations
3. Operational costs – R&D costs and finance function integration
4. Regulatory costs – evolving regulatory systems and high levels of bureaucracy
5. Human capital costs – shortage of the right talent and high levels of attrition
6. Political costs – Government instability and dealing with bribery and corruption
