From New Technologies to New Markets: A Mad Entry Rush

2008-11-26

One of the most surprising facts about newly created radical markets is that despite enormous technological and customer uncertainty and despite the relatively small size of these young markets, what we see in industry after industry is a mad rush by hundreds of firms to enter the new market. Given the description of the characteristics of supply-push innovations that create these new markets, the reason for the entry rush and the amazing product variety in early markets should be clear: since supply-push innovation processes do not produce a single new product or service and do not result in new products that are ready to go to market from day one, the early phase of these markets is pure exploration.

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Positioning Current Products: Why Does Messaging Often Fail to Tout a Product’s True Value

A company can have a great product, but if it fails to communicate the product’s value, it will not optimize its sales revenue. Although marketing managers know this, we have found that positioning and messaging strategies often fail to communicate a product’s true value because companies are unaware of the opportunities that exist in a market, use vague messaging that fails to hit the mark, and stick with outdated messages.

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Winning the Battle for Insight: Doing Situation Analysis

The situation analysis probes the following key areas for insights (i) Customers; (ii) Competitors; (iii) The firm’ss own realities; (iv) Industry dynamics and (v) The broader environment. The first order of business is to develop a set of questions to ask within each of these areas. The questions will vary depending on the industry and the particular issues your company faces. The following is a set of guiding questions that is typically used to start with when doing a situation analysis with an executive team.

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Gary Hamel on Strategy: Strategy Making Must Be Democratic

2008-11-25

Despite years of imploring people to bring their brains to work, to get involved in quality circles, process reengineering, and the like, senior managers have seldom urged them to participate in the process of strategy creation. But if senior managers can’t address the challenge of operational improvements by themselves’ witness their reliance on quality circles, suggestion systems, and process-improvement task forces — why would they be able to take on the challenge of industry revolution? After all, what do a company’s top 40 or so executives have to learn from one another? They’ve been talking at one another for years. Their positions are well rehearsed, and they can finish one another’s sentences. In fact, there is often a kind of intellectual incest among the top officers of a large company.

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Blueprint Value Propositions - Shapers of a New World: Creating a New Market

According to David G.Thomson, the most successful companies, so called blueprint companies, fell into three categories. The top Blueprint Companies were either Shapers of a New World—companies that literally created a new way for the world to live or work. Then there were Niche Shapers—companies that followed the Shapers of the New World by redefining the market to create a large market or product niche that filled an unmet need. Then come the Category Killers—companies that optimize a market by creating and disrupting the value proposition platforms of the established incumbents. This post will present the first tier of blueprint companies: Sharper of a New World.

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3-D Customer Insight to Drive Profitable Growth: An Introduction

To find profitable growth opportunities in an increasingly competitive marketplace, many companies are trying to deepen their understanding of existing and potential customers. They have the right idea, but most go about it the wrong way. Either they rely too much on information about customer attitudes or – if they do look at customer behavior and economics – they make little attempt to integrate the three sets of data. The result is likely to be both an incomplete and a misleading view of how to manage growth investments. This post introduces a more comprehensive approach to generating customer insights that can improve almost any organization’s ability to drive profitable, customer-focused growth. The approach, so-called ‘‘3-D customer insight,’’ provides fact-based answers to the following critical questions: (i) What customers and customer segments should we focus on? (ii) What new products should we launch, and to which customers and customer segments should they be introduced? (iii) How can we most profitably differentiate our offer from those of competitors? and (iv) Where and how can we get the biggest bang from our growth investments (e.g. marketing initiatives)?

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What New Markets Are Available to You? Known Customers, Known Products

2008-11-24

For most excellent operational managers, the most obvious strategy is to try to create a market from known customers and known products (see the figure below). Intuitively, it seems that if you know both, you can probably reduce your risks commensurately. The problem in application comes in minimizing the risks too much and producing a line extension instead of a new market. Extending a line of products is very useful as a strategy to fund new market efforts, but line extensions are not new markets.

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