Prepared By ; Gihan Aboueleish
1. What is market opportunity analysis? 2. How to identify unmet and/or underserved
customer needs? 3. How to identify the most attractive
customers? 4. How to assess your competitive
advantage? 5. How to assess your resource needs? 6. How to assess the market readiness of
technology? 7. How to craft an opportunity story? 8. How to assess the market opportunity’s
attractiveness?
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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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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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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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Look at Value System to Discover
New Business Opportunities
Liberate Trapped
Value
Introduce New-to-
the-World Value
Create More Efficient Markets, e.g., eBay
Enable Ease of Access, e.g., Gap
Customize Offerings, e.g. MyYahoo
Extend Reach and Access, e.g., keen.com
Create More Efficient Systems, e.g., FedEx
Disrupt Current Pricing Power, e.g.,
Priceline
Build Community, e.g., MyFamily.com
Enable Collaboration, e.g., ProjectPoint
Introduce New Functionality/Expertise, e.g., C-
Mode
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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?
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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
Technology 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 firm’s offering
Competition
Analysis of the company environment provides the current state of
the company’s resources Company
Analysis of the competition environment reveal the structure of the
industry and market, key competitors in the marketplace, and the
firm’s relative advantage to each of the key players
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Specify Opportunity in Concrete TermsSpecify Opportunity in Concrete Terms
Assess Advantage Relative to CompetitionAssess Advantage Relative to Competition
Assess the Company’s Resources to Deliver the OfferingAssess the Company’s Resources to Deliver the Offering
Assess Market Readiness of TechnologyAssess Market Readiness of Technology
Identify the Specific Customers a Company Will PursueIdentify the Specific Customers a Company Will Pursue
Identify the Unmet and/ or Underserved Customer NeedIdentify the Unmet and/ or Underserved Customer Need
Assess Opportunity AttractivenessAssess Opportunity Attractiveness
Customer
Technology
Competition
Company
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Po
stp
urc
ha
se
Search for Availability Read Reviews Review Contents
Evaluation
Problem Recognition
Information Gathering
Purchase Decision
Satisfaction
Pre
pu
rch
as
e
Pu
rch
ase
Need for Activity/Class Gift Interested in
Author/Subject Matter
Good Quality of Contents Arrived on Time
Loyalty
Quality Price Availability Fits Needs
Purchase Online Purchase Offline
Easy Buying Experience
Repeat Purchases High Percentage of
Consumers’ Book
Purchases
The “Customer Decision Process” framework: analyze and discover customer needs
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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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Segmentation Type Description Examples - Variables
Geographic
Divides the market into different geographical units
Country / region / city
Demographic Divides the market on the basis of demographic variables
Age, gender, income
Firmographic Divides the market on the basis of company-specific variables
Number of employees, company size
Behavioral Divides the market based on how customers actually buy and use the product
Website loyalty, prior purchases
Occasion (Situational)
Divides the market based on the situation that leads to a product need, purchase, or use
Routine occasion, special occasion
Psychographic Divides the market based on lifestyle and / or personality
Personality (laid back, type A), lifestyle
Benefits Divides the market based on benefits or qualities sought from the product
Convenience, economy, quality
Market segmentation approaches: identify customers (must-haves vs nice to have)
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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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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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Competitor mapping;
Assess competition intensity
Identify underserved and most competitive areas;
Identify current competitors’ strengths
Identify collaborators
Assess competitive hurdles
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Target Segments Kodak Canon Snapfish
Cost-Conscious
Disposable cameras
Low-end film and digital cameras
No deals on developing
Limited low-end cameras
No services
Deals on services
No products
Middle-Income Families with Children
Mid-line cameras
Film
Photo services; developing, sharing
Mid-range cameras
No services
Services—developing, sharing, gift cards
High Income/Tech Savvy
High-quality accessories (film, paper, CDs)
Products are less sophisticated
High-tech products
Software
Printers—consumers don’t need to process
Services, though limited
High performance level Medium performance level Low performance level
Competitor mapping:
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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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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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Partnership: close resource gaps;
Complementary: Intel & Microsoft.
Capability: AOL & Associated Press.
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A high-level judgment on; Technology sensibility;
What are the technology trends?
How sensible 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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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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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 in-house, 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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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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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 eBay’s auction market is 80%
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Priceline.com’s overall opportunity assessment:
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Process Steps
View Current Business and Financial News
Plan Investment Strategy
Place Stock Order*
Track Portfolio Performance
Tax Reporting
News constantly updated around the clock
Real-time quotes
Comprehensive chart data
“Story behind the numbers” from experienced staff
Personalized investment tools
Comprehensive portfolio tracking
Unmet and Underserved Needs
Learn About Investing
Read Analysis / Commentary
Education on investing options and strategies
Step 1: Identify unmet and underserved needs
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Step 1: Identify unmet and underserved needs
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Step 2: Identify specific customers
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Step 3: Assess competitive advantage
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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
Step 4: Assess resource needs
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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
Step 5: Assess technology’s market readiness:
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Step 6: Craft an opportunity story:
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Competitive
Vulnerability
Magnitude of
Unmet Needs
Interaction
Between
Segments
Likely Role of
Growth
Technology
Vulnerability
Market Size Level of
Profitability
Neutral
Factor
Positive
Factor
Negative
Factor
Step 7: Assess opportunity’s attractiveness:
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