Entry of New Firms

DEFINITION:Additional private sector firms have entered the relevant market in which the client operates. Note that this indicator only applies in circumstances where PSD firm level competition indicators are applicable. IFIs who wish to gather additional information on the quality of the result reported may use ‘commentary’ to do so.

Rationale: This indicator seeks to capture an aspect of increased competition that may be related to the success of the client company. However, the observation of entry of new firms should not be attributed directly to the client’s activities and nor is it fully attributable to IFI interventions.

This indicator is applicable only if the IFI client is expected to attract other firms to the same market, and it should only be used if one of the firm-level PSD indicators “Market Entry” or “Market Share Increased” are used for a given client. However, it should be noted that the indicator may be tracked annually (throughout the project cycle) or in an evaluation/survey method.

Increased competition in the relevant market is often manifested by an increase in product or service quality or a decrease in product or service price, though these do not always indicate entry of new firms and may also result from the reaction of existing players in the relevant market to the new entrant. However, note that the entry of new firms into a market is easier to measure as compared to a change in strategy/positioning of existing firms in the relevant market.
Data for this indicator may be sourced by IFI clients who are able to report on the number of competitors in their respective markets (timing to be determined by the IFI) as this is an exercise any such entity would undertake as part of its operations. If needed, the IFI may then conduct market research to verify the data reported by the client.
Unit: Yes/No, with commentary

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