Article at a glance:

Beating the odds in market entry

• Most new market entrants are doomed to fail. Why? Cognitive biases—systematic errors in the way people process information—often undermine the planning and decision-making processes of otherwise astute executives.
• Taking biases out of decision making is difficult. Few executives are well equipped to sort out which biases undermine what aspects of the planning process.
• This article shows executives how to overcome common biases when they weigh the factors—capabilities, market size, potential competition, market share and revenue, and costs—that most companies take into account in deciding whether to enter a market.
• A reference class—a group of similar cases—provides a valuable reality check.