A Pass / Fail Test for Any New Market
If you are considering entering a new target market, with an
existing or new product or service, it makes sense to first
systematically analyze the market in question via some
fundamental market evaluation criteria. It is not only
rational but most cost effective to determine if a new market
pursuit makes sense for your company before any significant
resources are further applied to the effort. A "pass or fail" test of your targeted market is recommended
with your company's core management team collective
involvement. Discussing the attributes of a given market and
further analyzing the business logic behind your intention to
participate in a new market will generate some very
enlightening conversation among your key decision makers.
Having various management functions present for the discussion
generates the most effective, broad base perspective,
appropriate "next step" for this strategic decision. Besides further justifying or reducing your intentions to enter
a new market, weighing all the same attributes of any one
targeted market candidate against another target markets of
consideration can lead to a pivotal decision for the future
direction of your company. The opportunity cost of choosing
the "wrong" or "least rewarding" target market, given limited
corporate human and financial resources, can make or break
your collective ability to meet or exceed your company's short
and long term growth objectives. Again, effectively utilizing
a simple, systematic evaluation checklist made up of some of
the market attributes listed below can be most time efficient
and cost effective. Our list of market attributes cover various business sectors
and should not be considered a complete listing. To make this
evaluation exercise most productive for your management team,
first evaluate this list for relevancy and then add whatever
number of additional categories or attributes that correlate
to your company's collective business priorities, resources,
risk/ reward tolerance levels and growth objectives. MARKET PRODUCT / SERVICE LINE ATTRIBUTES:
* Market has a viable need for product application advancements or transitions
* Market is not dominated by short product life cycles
* Market allows for effective competitive advantage without extraordinary design, engineering or research cost
* Market allows for effective competitive advantage without extraordinary testing, certification or performance compliance issues
* Market offers opportunities for relatively high product / service gross profit margins
* Market does not require a large number of products or services to effectively compete
* Market share is gained more from product value or by high value service
* Market product/ service applications have worldwide demand
* Market product/ services are compatible with existing company core competencies
* Market product/ service offerings can be legally protected
* Market generally does not present extraordinary financial liability exposure
* Market demand is not extraordinarily seasonal or difficult to forecast MARKET CUSTOMER ATTRIBUTES:
* Market offers a diversified mix of key customer product / service users
* Market offers financially stable customers
* Market offers relatively consistent purchase loyalty
* Market has existing product/ service users who will purchase other related offerings
* Market is supported long term by fundamental economic and demographic growth MARKET SERVICE ATTRIBUTES:
* Market does not require an inordinate amount of after-the-sale service
* Market can be supported by a centralized customer service location
* Market does not require extensive service certification from 3rd party entities
* Market does not proliferate extraordinary product/ service warranties
* Market service requirements are not hazardous to company personnel
* Market does not require extraordinary distribution requirements
* Market share can be augmented with effective e commerce tactics MARKET COMPETITION ATTRIBUTES:
* Market is dominated by well known competitors and suppliers
* Market is not dominated by one company (> 80% market share)
* Market has reputable competition, a quality image and history
* Market offers competitors that would be future acquirers or acquisition candidates
* Market is not targeted for international penetration via pricing tactics
* Market requires a reasonable level of financial and technical resource barriers to entry MARKET GROWTH:
* Market has a proven history of growth
* Market has a high probability of long term future growth
* Market offers traceable causes of growth
* Market has worldwide growth
* Market has regional growth niches
* Market growth cannot be negatively affected by existing or pending legislation
Justification of entry into any new market or niche thereof
involves effectively identifying all viable competitors,
relevant market attributes, key market participants and their
market shares. Being able to strategically apply this
qualified information with respect to your known company
financial, technical and human resources can result in
extraordinary business growth opportunities. If you want to further quantify this analysis you can
numerically weight each market attribute with your own
specific market attribute priorities and then give numerical
"grades" to any or all new market entry candidates to
calculate a weighted value for each new market opportunity. Evaluating new business opportunities should be a well thought
out, straightforward, iterative process. Beginning the
evaluation process with a simple tool to justify further
analysis is a prudent procedure. The more effective your
analysis, the greater the probability your strategic decisions
will maximize return on investment. About the Author:
Mark Smock is President of http://www.business-buyer-directory.com,
the FIRST international business buyer directory of its kind.
Business Buyer Directory provides a non-traditional means for
proactive business buyers to locate businesses for sale
worldwide that meet their exact registered purchase criteria.
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Every January, trade publications put out a list of predictions for the coming year. They discuss products, services and trends that they think will change the way business is done, labeling these "disruptive technologies."
The idea of disruptive technologies comes from Clayton Christensen's 1997 book, The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. A disruptive technology is a method, procedure, skill, device, or material that redefines the competitive standards. Note that the technology doesn't have to be a physical item and that it often forces us to re-examine the way we work.
InfoWorld's list of disruptive technologies for 2003 included open source, self-service CRM, digital identity, and my personal favorite, Weblogs. How can a simple, Web-based journal be disruptive?
For starters, it's worth describing what a Weblog is. Basically, a Weblog or "blog" is a personally created, online, time-stamped web page that includes the thoughts, ideas, and comments of the "blogger." The musings are usually brief, but they are published frequently and consistently. People can subscribe to receive the blog updates via e-mail. Often, the blogger is an expert on the subject he/she is discussing.
At first glance, it doesn't appear that blogs would be at all disruptive. So why all the hype? If we look closely at the structure and intent of blogs as a communications tool, we can see some powerful ideas at work.
Blogs are a direct, one-to-many vehicle for communicating ideas. They expand an individual's ability to communicate. They are fresh and timely. The blogger, in order to maintain interest, must communicate often. Blogs enable a single person to share ideas, insights, and useful knowledge with an audience. Thanks to the Web, the audience can be a global one.
Whenever a new tool or process-such as e-mail- expands communications, the effects are far-reaching and dramatic. Even though blogs have been around for 3-4 years, they could be the next big thing.
Blogs Are The "Real Voice"
Two important characteristics of blogs are that they are written by a person who is knowledgeable and passionate about the topic, and that they are written in a "real voice." This is a cosmic shift from the marketing and public relations materials that are the staple of business communications.
Often, when information goes through a formal marketing or PR process, the end result is an attractive, expensive, stale, diluted document written in corporate speak. This result is generally due to the processes that evolved to accommodate the costs and standards of print technology, rather than to the incompetence or malevolence of corporate communicators. The edge, the authenticity, and the voice of the professional speaking to his fellow professionals is lost.
Blogs offer the human voice that can be loud, controversial, and even wacky. But the realness of the blog inspires trust and piques people's curiosity. A blog can create a community and a dynamic discussion.
If you are a product manager working in the chemical products industry, chances are that you would rather hear about the real experiences of other product managers in your industry than read a glossy marketing piece put out by the marcom department. Blogs fit this communications requirement perfectly.
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Blogs Empower The Individual
There are a host of tools on the Internet that make blogging a snap! Blogs empower a single person to capitalize on the reach and ubiquity of the Web. And they don't require the investment or recurring costs of print technologies.
Blogs Empower The Enterprise
Blogs empower the knowledgeable people within a company to share their insights, know-how, and expertise. The value to a corporation is that this knowledge can be organized, distributed, and leveraged to increase the value of different product and service offerings to the customer.
If a corporation is going to use a blog, however, it should understand that controlling the content of the discussion is difficult. If you want an authentic exchange, you have to be willing to accept the stone-throwing and critical comments that often occur in a blog. This requires extending trust and giving up some of the control a company would normally have when it publishes a press release or hosts its own online forum, for example. The upside is that people will listen to a real voice.
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You can adapt blog technologies to your corporate electronic newsletters by taking advantage of the underlying concepts. You can, for example:
* Publish a small amount of well-organized information frequently and regularly
* Include content from individuals who are knowledgeable and passionate about their work
* Make it easy for your employees to communicate directly in their own, human voice
* Respect the reader by making sure your e-newsletter provides value and that he/she wants to receive it.
E-newsletters geared towards educating a marketplace, rather than those focused on advertising or marketing, turn out to be particularly effective. E-newsletters offer an affordable, direct way for the experts in a company to communicate with an audience. This means that a product manager or an engineer can enhance the flow of information and make it more accessible to those who want it.
Think of your channel and the information needs of your partners. Your company has a wealth of information that would help them sell your products more effectively. There is much insight within your partner community that could be leveraged throughout the channel. And your technical experts and engineers have critical knowledge and understanding that everyone could utilize.
What's often missing is an easy way for the "know-how" keepers to capture their knowledge, organize it, and deliver it. The best e-newsletters are written in a real voice, not in corporate speak.
Two years ago, the book The Cluetrain Manifesto shook up the business community (see http://www.cluetrain.com/book.html). The revelation? That business is about humans. As Wall Street Journal columnist Thomas Petzinger Jr. writes in the foreword: "I was dumbstruck. There in a few pages, I read a startlingly concise summary of everything I'd seen in twenty-one years as a reporter, editor, bureau chief and columnist for my newspaper. The idea that business, at bottom, is fundamentally human. That engineering remains second-rate without aesthetics. That natural, human conversation is the true language of commerce. That corporations work best when the people on the inside have the fullest contact possible with people on the outside."
It turns out that the human "voice" is an underserved or ignored need. In a world of 6+ billion inhabitants, the individual craves to speak and to be heard.
References
Blogs As Disruptive Tech: How Weblogs Are Flying Under The Radar Of The Content Management Giants, By John Hiler, CEO, Webcrimson, http://www.webcrimson.com/ourstories/blogsdisruptivetech.Htm
Making Room For Disruptive And Emergent Technologies, By Hugh Blackmer, Science Librarian, Washington & Lee University, http://home.wlu.edu/~blackmerh/sabb/nitle2.html*
Blogs As Disruptive Innovation: What A Brave New World Blogging Is Building!, by Dr. James V. McGee, Professor, The Kellogg School Of Management,
http://www.mcgeesmusings.net/2002/05/15.html
Weblogs At Harvard Law, Bookmark List For ABCD Weblogs Meeting, By Dave Winer,
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