Market opportunity analysis where will the business compete

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Market opportunity analysiswhere will the
business compete?
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Learning objectives

• What is market opportunity analysis?
• How to identify unmet and/or underserved customer
  needs?
• How to identify the most attractive customers?
• How to assess your competitive advantage?
• How to assess your resource needs?
• How to assess the market readiness of technology?
• How to craft an opportunity story?
• How to assess the market opportunitys
  attractiveness?

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Learning objectives

• What is market opportunity analysis?
• How to identify unmet and/or underserved customer
  needs?
• How to identify the most attractive customers?
• How to assess your competitive advantage?
• How to assess your resource needs?
• How to assess the market readiness of technology?
• How to craft an opportunity story?
• How to assess the market opportunitys
  attractiveness?

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Market opportunity analysis

• What? A tool to identify and assess the
  attractiveness of business opportunity
• Why? Unique e-commerce environment
• Competition across (vs within) industry boundary
• Competition between co-opetitors (vs competitors)
• Competition on speed of response
• New ways to bring value to customers
• New ways to reconfigure value chains value
  systems

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Market opportunity analysis

• A value chain a set of value creating activities
  within a firm
• A value system a set of value creating
  activities connecting a firm with other firms and
  customers

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Market opportunity analysis

• Considerations for value creation
• Trapped value efficiency, accessibility,
  customer empowerment
• New value personalization, extension,
  community-building, collaboration
• Horizontal plays improve functional operations
• Vertical plays improve industry specific
  business activities

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Market opportunity analysis
Create More Efficient Markets, e.g., eBay
Enable Ease of Access, e.g., Gap
Liberate Trapped Value
Create More Efficient Systems, e.g., FedEx
Look at Value System to Discover New Business
Opportunities
Disrupt Current Pricing Power, e.g., Priceline
Customize Offerings, e.g. MyYahoo
Extend Reach and Access, e.g., keen.com
Introduce New-to-the-World Value
Build Community, e.g., MyFamily.com
Enable Collaboration, e.g., ProjectPoint
Introduce New Functionality/Expertise, e.g.,
C-Mode
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Market opportunity analysis

• Questions for value creation
• Is there a high degree of asymmetric information
  between buyers sellers that trap values?
• Are significant amount of time resources
  consumed in bringing people together to make a
  transaction or complete a task?
• Do customers view activities as more collapsed
  than do industry participants?
• (see pg.81)

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Market opportunity analysis

• How? Using a market opportunity analysis
  framework that revolves around four key elements

Customer

• Analysis of the customer environment uncovers
  unmet or underserved customer needs, as well as
  the market they occupy

• Analysis of the technology environment reveals
  the readiness of the particular technology, as
  well as any alternative technologies, on which
  the manager anticipates deploying the firms
  offering

Technology
Company

• Analysis of the company environment provides the
  current state of the companys resources

• Analysis of the competition environment reveal
  the structure of the industry and market, key
  competitors in the marketplace, and the firms
  relative advantage to each of the key players

Competition
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Market opportunity analysis
Customer
Competition
Company
Technology
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Learning objectives

• What is market opportunity analysis?
• How to identify unmet and/or underserved customer
  needs?
• How to identify the most attractive customers?
• How to assess your competitive advantage?
• How to assess your resource needs?
• How to assess the market readiness of technology?
• How to craft an opportunity story?
• How to assess the market opportunitys
  attractiveness?

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Identify customer needs
The Customer Decision Process framework
analyze and discover customer needs

• Problem Recognition

Need for Activity/Class
Gift
Interested in Author/Subject Matter
Information Gathering
Search for Availability
Read Reviews
Review Contents
Prepurchase
Evaluation
Quality
Price
Availability
Fits Needs

• Purchase Decision

Purchase Offline
Purchase Online
Purchase

• Satisfaction

Good Quality of Contents
Arrived on Time
Easy Buying Experience
Postpurchase

• Loyalty

High Percentage of Consumers Book Purchases
Repeat Purchases
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Identify customer needs

• Questions to reveal unmet or underserved needs
• What is the ideal customer experience?
• Is there a gap between customers actual and
  ideal experience?
• What are customer beliefs and associations about
  the buying process?
• What barriers block some/all potential customers?
• What are the opportunities to enhance the
  customers experience?

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Learning objectives

• What is market opportunity analysis?
• How to identify unmet and/or underserved customer
  needs?
• How to identify the most attractive customers?
• How to assess your competitive advantage?
• How to assess your resource needs?
• How to assess the market readiness of technology?
• How to craft an opportunity story?
• How to assess the market opportunitys
  attractiveness?

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Identify specific customers
Market segmentation approaches identify
customers (must-haves vs nice to have)
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Identify specific customers

• Actionable segmentation
• easy to identify
• readily reached
• described in terms of their growth, size, profile
  attractiveness
• Meaningful segmentation
• Customers within a segment behave similarly,
  while customers across segments behave in
  different ways.
• provides some insight into customers
  motivations.
• corresponds to the set of barriers customers face
  when they buy or use a product or service.
• corresponds with how customers currently (or
  could) buy or use the product or service.
• correlates to differences in profitability or
  cost to serve.
• differences are large enough to warrant a
  different set of actions by a company.

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Learning objectives

• What is market opportunity analysis?
• How to identify unmet and/or underserved customer
  needs?
• How to identify the most attractive customers?
• How to assess your competitive advantage?
• How to assess your resource needs?
• How to assess the market readiness of technology?
• How to craft an opportunity story?
• How to assess the market opportunitys
  attractiveness?

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Assess competitive advantages

• Direct competitors
• Firms offering products or services that are
  close substitute
• Rivals in the same industry
• Indirect competitors
• Substitute Producers
• Firms that, though they reside in different
  industries, offer products and services that
  perform the same function
• Adjacent Competitors
• Firms that have the potential to provide products
  or services that are substitutes

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Assess competitive advantages
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Assess competitive advantages

• Competitor mapping
• Assess competition intensity
• Identify underserved and most competitive areas
• Identify current competitors strengths
• Identify collaborators
• Assess competitive hurdles

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Assess competitive advantages
Competitor mapping
Medium performance level
High performance level
Low performance level
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Learning objectives

• What is market opportunity analysis?
• How to identify unmet and/or underserved customer
  needs?
• How to identify the most attractive customers?
• How to assess your competitive advantage?
• How to assess your resource needs?
• How to assess the market readiness of technology?
• How to craft an opportunity story?
• How to assess the market opportunitys
  attractiveness?

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Assess resource needs

• Resource characteristics
• central to delivering new benefits or unlocking
  trapped value.
• Hold the promise for winning against current and
  prospective competitors.

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Assess resource needs

• Three types of resources
• Customer-facing brand name, a well trained sales
  force, and multiple distribution channels.
• Internal technology, product development,
  economies of scale, and experienced staff.
• Upstream suppliers relationships.

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Assess resource needs

• Partnership close resource gaps
• Complementary Intel Microsoft.
• Capability AOL Associated Press.

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Learning objectives

• What is market opportunity analysis?
• How to identify unmet and/or underserved customer
  needs?
• How to identify the most attractive customers?
• How to assess your competitive advantage?
• How to assess your resource needs?
• How to assess the market readiness of technology?
• How to craft an opportunity story?
• How to assess the market opportunitys
  attractiveness?

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Assess technologys market readiness

• A high-level judgment on
• Technology vulnerability
• What are the technology trends?
• How vulnerable is the opportunity to these
  trends?
• Technology adoption
• What is the customers technology penetration
  rate?
• What penetration is necessary to make the
  offering financially viable?
• When is the minimum penetration likely to be met?
  
• Is there an introductory version that could be
  upgraded as technology penetration increases?

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Assess technologys market readiness

• A high-level judgment on
• Technological impacts
• What new technologies could radically alter the
  economics of delivering an offering or require
  adjustment of the actual features and
  functionality of an offering?
• How likely is it that your target population or
  competitors will use these technologies?

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Assess technologys market readiness

• Moores Law
• the processing power of successive generations of
  microchips will double every 1.5 years
• Gilders Law
• total bandwidth of communications systems will
  triple every 12 months

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Assess technologys market readiness
Source The Net Effect
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Learning objectives

• What is market opportunity analysis?
• How to identify unmet and/or underserved customer
  needs?
• How to identify the most attractive customers?
• How to assess your competitive advantage?
• How to assess your resource needs?
• How to assess the market readiness of technology?
• How to craft an opportunity story?
• How to assess the market opportunitys
  attractiveness?

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Craft an opportunity story

• Describe the target segment(s) within the
  selected value system
• Articulate the high-level value proposition
• Spell out the expected elements of customer
  benefits
• Identify the critical capabilities and resources
  needed to deliver the customer benefits
• Lay out the critical reasons to believe that
  the identified capabilities and resources will be
  a source of relative advantage over the
  competition
• Categorize the critical capabilities (and
  supporting resources) as inhouse, build, buy, or
  collaborate
• Describe how the company will capture some
  portion of the value that it creates for its
  customers
• Provide an initial sense of the magnitude of the
  financial opportunity for the company

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Learning objectives

• What is market opportunity analysis?
• How to identify unmet and/or underserved customer
  needs?
• How to identify the most attractive customers?
• How to assess your competitive advantage?
• How to assess your resource needs?
• How to assess the market readiness of technology?
• How to craft an opportunity story?
• How to assess the market opportunitys
  attractiveness?

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Assess opportunity's attractiveness

• What? Attractiveness f(long-term profitability,
  relative competitiveness)
• How? Determine the magnitude character of the
  opportunity
• Level of unmet need and the magnitude of
  unconstrained opportunity
• Level of interaction between major customer
  segments
• Likely rate of growth
• Size/volume of the market
• Level of profitability

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Assess opportunity's attractiveness

• Five attractiveness factors
• Unconstrained opportunity, e.g., eBay
• Segment interaction, e.g., Zoomerang.com
• Growth rate 30-50 annual growth of customer
  market
• Market size, e.g., pet food and supplies market
  generates 23 billion of sales
• Profitability, e.g., profit margin at eBays
  auction market is 80

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Assess opportunity's attractiveness
Priceline.coms overall opportunity assessment
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Marketwatch.com
Step 1 Identify unmet and underserved needs
Process Steps
Unmet and Underserved Needs

• News constantly updated around the clock
• Real-time quotes
• Comprehensive chart data

View Current Business and Financial News
Read Analysis / Commentary

• Story behind the numbers from experienced staff

Learn About Investing

• Education on investing options and strategies

Plan Investment Strategy

• Personalized investment tools

Place Stock Order
Track Portfolio Performance

• Comprehensive portfolio tracking

Tax Reporting
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Marketwatch.com
Step 1 Identify unmet and underserved needs
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Marketwatch.com
Step 2 Identify specific customers
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Marketwatch.com
Step 3 Assess competitive advantage
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Marketwatch.com
Step 4 Assess resource needs

• Customer-facing resource brand name and CBS
  associations
• Internal asset in-house writers
• Upstream resources access to CBS news outlets
  reporting resources existing relationships with
  financial institution clients

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Marketwatch.com
Step 5 Assess technologys market readiness

• Consumers low-bandwidth services ? streaming
  video and broadband friendly services have to
  wait
• Advertisers receptive to alternative online
  advertising placements ? make technology
  investment accordingly
• Licensees seamlessly integrate modularized
  content into their sites ? ensure scalability of
  its technology to meet increasing licensing
  demands

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Marketwatch.com
Step 6 Craft an opportunity story
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Marketwatch.com
Step 7 Assess opportunitys attractiveness
Positive Factor
Neutral Factor
Negative Factor