Growth Strategy – Workshop 2 (Market Opportunity)
The Appleton Greene Corporate Training Program (CTP) for Growth Strategy is provided by Mr. Ardila Certified Learning Provider (CLP). Program Specifications: Monthly cost USD$2,500.00; Monthly Workshops 6 hours; Monthly Support 4 hours; Program Duration 27 months; Program orders subject to ongoing availability.
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Learning Provider Profile
Mr Ardila is the co-founder of The Hawksbill Group, a business consulting and investment firm advising medium and large clients in the public and private sectors. Mr. Ardila is also a member of the Board of Directors of Accenture, Goldman Sachs BDCs, Nexa Resources and Ola Electric Mobility. Prior to his current activities, he was Executive Vice President of General Motors and CEO of Latin America from 2010-2016 (March). In his 30-year career with GM, he held several important positions, including country CEO in Ecuador, Colombia, Argentina and Brazil, as well as CFO of Latin America, Africa and the Middle East. He also worked as an investment banker for the Rothschild Group from 1996-1998 and Secretary General at the Ministry of Industry and Trade in Colombia (1983-84).
Mr. Ardila is a graduate of the London School of Economics where he obtained a MSc. Degree in Economics. He has lived in 10 countries and speaks English, Spanish, Portuguese and German.
Simply described, a market opportunity is a gap in the market. Something, someone, or some place that isn’t being serviced by other businesses that you may take advantage of and exploit to expand your company swiftly. However, it is simpler said than done. Everyone is striving for the same spot and searching for that extra, unheard-of thing to put them ahead of the competition. How therefore can you identify a promising market opportunity before your rivals do? And once you have one, how do you go about creating an effective business growth strategy? Four crucial factors come into play when determining a promising market potential for your company: What do consumers want or need? What, more crucially, is your competition NOT doing? How does your product address a specific issue? or strengthen an existing remedy? What is the market like right now? Following the completion of these inquiries, you ought to be in a better position to comprehend your target market, spot product flaws, and ultimately find untapped markets. At the end of the exercise, you also need to understand the profit potential of the opportunity, which normally is arrived at by estimating the gross margin over a period of time.
01. Identify Strengths and Weaknesses: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
02. Purchase Situation Analysis: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
03. Direct Competition Analysis: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
04. Indirect Competition Analysis: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
05. Analysis of Complementary Products and Services: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
06. Analysis of other Industries: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
07. Foreign Markets Analysis: departmental SWOT analysis; strategy research & development. 1 Month
08. Environmental Analysis: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
09. Listen to your Customers: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
10. Consumer Segmentation: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
11. Spot Acute Unsolved Problems: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
12. Profit Potential: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
01. Identify Strengths and Weaknesses: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
02. Purchase Situation Analysis: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
03. Direct Competition Analysis: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
04. Indirect Competition Analysis: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
05. Analysis of Complementary Products and Services: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
06. Analysis of other Industries: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
07. Foreign Markets Analysis: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
08. Environmental Analysis: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
09. Listen to your Customers: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
10. Consumer Segmentation: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
11. Spot Acute Unsolved Problems: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
12. Profit Potential: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
01. Create a task on your calendar, to be completed within the next month, to analyze Identify Strengths and Weaknesses.
02. Create a task on your calendar, to be completed within the next month, to analyze Purchase Situation Analysis.
03. Create a task on your calendar, to be completed within the next month, to analyze Direct Competition Analysis.
04. Create a task on your calendar, to be completed within the next month, to analyze Indirect Competition Analysis.
05. Create a task on your calendar, to be completed within the next month, to analyze Analysis of Complementary Products and Services.
06. Create a task on your calendar, to be completed within the next month, to analyze Analysis of other Industries.
07. Create a task on your calendar, to be completed within the next month, to analyze Foreign Markets Analysis.
08. Create a task on your calendar, to be completed within the next month, to analyze Environmental Analysis.
09. Create a task on your calendar, to be completed within the next month, to analyze Listen to your Customers.
10. Create a task on your calendar, to be completed within the next month, to analyze Consumer Segmentation.
11. Create a task on your calendar, to be completed within the next month, to analyze Spot Acute Unsolved Problems.
12. Create a task on your calendar, to be completed within the next month, to analyze Profit Potential.
Every company needs to know who they are, where they fit into the market, and where they’re going. Only 33% of businesses make it past their tenth year after starting out, while only 66% survive their first two years.
What does it thus take to locate the ideal market opportunities and create a development plan that gets you where you want to go?
What is a market opportunity?
Simply described, a market opportunity is a gap in the market. Something, someone, or some place that isn’t being serviced by other businesses that you may take advantage of and exploit to expand your company swiftly.
However, it is simpler said than done. Everyone is striving for the same spot and searching for that extra, unheard-of thing to put them ahead of the competition.
How therefore can you identify a promising market opportunity before your rivals do? And once you have one, how do you go about creating an effective business growth strategy?
How to identify a good market opportunity
Identifying a good market opportunity for your business boils down to four key areas:
1. What do consumers want/need?
2. What is your competition doing, or more importantly, NOT doing?
3. How can your product solve a particular problem? Or compliment a pre-existing solution?
4. What is the current state of the market?
Following the completion of these inquiries, you ought to be in a better position to comprehend your target market, spot product flaws, and ultimately find untapped markets.
Let’s look at some of the methods you might use to respond to the following four questions.
How to use consumer data analysis to identify market opportunities
The first thing you need to do is figure out who exactly you are selling to. Knowing your audience is essential to assisting you in discovering a new market opportunity, whether you are doing customer surveys, analyzing data from your own website, or using third-party research.
Customer reviews and surveys analysis
Asking your consumers directly is one of the finest methods to find out who they are and what they want from your company. Customer feedback and surveys may provide you with valuable information about every facet of your company, from what clients think of your goods and services to how well your website and customer care department run.
Even though analyzing all of this feedback can be time-consuming, there are tools available to help. Sentiment analysis software can automatically determine the feelings underlying each comment and find recurring patterns in your comments. For instance, you can learn that multiple consumers have brought up a product’s flaw or that they feel your service falls short when it comes to after-sale support.
You may use the information you learn from your reviews and surveys to enhance your offerings, customer service, and brand perception. You must choose what you want to take away from your feedback and how you will apply it moving ahead.
Identifying consumer segments
Examine your current audience and divide it into groups according to characteristics you find common. These can be hard demographic variables that can be used to estimate market size, such as age, gender, geography, income, occupation, etc. You may find out why individuals would purchase your items by analyzing “softer” factors like attitudes, lifestyle, and personal values. These factors can affect everything from price to design.
Creating customer personas
After segmenting your audience, you should become a little more specific and create some distinct client profiles. Customer personas are a more thorough breakdown of the many customer types most likely to patronize your company. For instance, a toy store might include personas for parents, children, grandparents, and so on.
If it helps, you can give each of these personalities a name, age, and personality. The more real-looking they are, the simpler it will be to start relating to them on an emotional level. Personas make it simple for everyone in your company to understand the motives, potential pain areas, and ways in which your company may assist your target customer.
Based on actual clients, create each of your personalities. You may go deeper into who has purchased from you in the past and why by using surveys, feedback, and site analytics. In the long run, your business growth strategy will benefit from personas more if they are accurate.
Market opportunity examples across the world: Starbucks
When it comes to illustrating the failures of worldwide expansion, Starbucks has been virtually every expert’s go-to case study. Its failed attempt to dominate the Australian scene resulted in the closure of almost 70% of its outlets.
But another American coffee shop, Gloria Jean’s, did well in Australia.
It was a case of Starbucks not knowing how to make their brand relevant, not knowing how Australians loved their ambiance, and not being able to offer a menu that was palatable to the general populace.
Purchasing pattern analysis
Until you know how frequently and how much a consumer is likely to spend with you, you cannot assess the potential value of a new market opportunity. Your target audience’s frequency, amount, and value of purchases are revealed by their buying behaviors.
Key inquiries to make are:
• When do customers purchase our goods or services?
• When they need it, is it there?
• Where do people make the purchase?
• How are payments made?
Types of buying pattern
Every consumer purchase falls into one of the following categories:
How to carry out purchasing pattern analysis
Consumers often go through five stages when making any purchase, regardless of the pattern they fall into. It’s crucial to comprehend each of them to determine where and how your company fits in.
1. Problem recognition
When a consumer realizes they either need or want to buy something, this is when it happens. They might require new headphones because their old ones broke, or they might decide to update their existing set of headphones since a new model just came out.
2. Collect information
At this point, buyers start to learn more about the products they might buy from a variety of sources, such as asking for suggestions, reading reviews, speaking with salespeople, clicking on advertisements, and more.
3. Evaluate alternatives
Consumers will have a number of options to pick from in terms of the kind of product or service and the brand or company after doing their research. Consider purchasing headphones as an example. The buyer will need to determine the brand they want to purchase as well as the sort of headphones they want (in-ear, wireless, or over-ear) (Sony, Bose, Beats, etc.).
They will evaluate the benefits, costs, and features of each good or service during this stage of the process in order to make a choice.
4. Final buying decision
Time to make or break! The consumer will now make a final decision regarding the good or service they’re going to acquire, albeit they also have the option of choosing not to do so! If they do decide to move further, they will additionally think about the location, timing, and mode of their intended purchase.
5. Post-purchase evaluation
The last stage is the most crucial if you want to keep your consumers. After making a transaction from you, did your consumer express satisfaction with it? Do they know who to call if they require assistance?
Asking for feedback at this point is a wonderful approach to assess how easy the consumers’ entire purchasing process was for them as well as to uncover any problems with the product or service so you can address them quickly and keep the client satisfied.
2. How to use product analysis to identify market opportunities
Product analysis can take many different shapes, but to put it simply, it is enquiring about and gathering feedback on your product. You can get information from a variety of sources for this, such as focus groups, current customers, and industry or product specialists. Almost any step of the design process is a good time to conduct a product analysis.
Evaluating your existing products using consumer feedback
Finding and analyzing customer reviews of items is a terrific approach to receive insightful feedback on both new and existing products. Sentiment analysis tools can highlight the positive and negative aspects of your product so you can quickly see what is working well and what needs to be improved.
When you know which products are popular with your customers and are receiving positive reviews, you can choose to concentrate on expanding the lines of these products, or you can switch up your marketing strategy by emphasizing the aspects of your products that your target market finds most appealing.
Evaluating complimentary or new product launches
You should be watching not just your own items but also those of others. Your growth strategy will be greatly influenced by how well items that complement your own perform. You must stay current with current trends in order to comprehend how these complementary items might impact you.
For example, if you make printers, you should monitor paper sales because more and more companies are putting a premium on sustainability. If you see a dip, you’ll need to either come up with a different plan of action or modify your growth approach.
But it’s vital to keep in mind that it’s not just passively monitoring how other people fare. Building connections and collaborating with like-minded companies might actually help your clients and open up new market prospects.
Market opportunity examples across the world: Ikea
The culture of the area is another element that has a significant impact on how people perceive products.
Ikea is renowned for its ready-to-assemble furniture and DIY philosophy. But in India, people are accustomed to having their furniture constructed. Indians of the middle and upper classes rarely own power tools, much less utilize them, or read manuals with complex graphics.
Ikea has however made progress in figuring out what the target market wants, changing everything from the type of wood used in the furniture to the Indianized Swedish meatballs offered on the menu.
It’s too soon to predict if Ikea will succeed in the subcontinent, but it surely helps to conduct accurate fieldwork the first time.
A business would be well to consider expanding to another area, especially if the market it serves is starting to become saturated. Untapped markets can present a variety of new prospects, potential clients, and business lessons.
3. How to use competitor analysis to identify market opportunity
The following phase in creating a successful growth strategy is comprehending your competition. There are several approaches, but the main thing you want to attempt and unearth are the primary advantages and disadvantages of each of your competitors. Then, use what you’ve discovered to influence the course of your firm.
Many new firms overlook competitor analysis, yet doing so will help you create good offensive and defensive plans, as well as forewarn you of any prospective possibilities or threats as early as feasible.
In order to compare your performance to that of your primary competitors, competitor benchmarking makes use of a variety of metrics. With anything you’re comparing, whether it’s market share, sales, or even your Net Promoter Score, you may be as general or particular as you wish. This is your chance to assess your performance in detail and determine the potential location of your next market opportunity.
How to choose competitors to benchmark against
Keep your attention on the task at hand and resist the urge to simply put everyone’s name in the hat. If you want to understand how you can improve right away, the main players in your field if you have higher growth aspirations, or even those who are playing catch up if you want to prevent being caught off guard in the future, you can opt to look at your direct competitors.
How do you choose what to benchmark
Where do you begin when there is so much to look at? Consider your company’s goals and the KPIs that will be most helpful in achieving your growth objectives. If you’re still hesitant, you can start in a few of the following places:
• Financial results (revenue, profit, year-on-year growth, etc.)
• Marketing stats (brand recognition, social following, engagement rates, etc.)
• Sales numbers
• Customer service statistics (customer relationship, action and efficiency, response times, etc.)
• Customer experience metrics (Customer Satisfaction Score, Net Promoter Score, Customer Effort Score etc.)
Establishing your existing standing in the business you have chosen is also crucial. You can get a better understanding of where you stand in the market and identify new growth possibilities by comparing your business processes to “best practice” approaches and your performance to industry standards.
How to choose what to benchmark
It’s not always the simplest information to obtain, but if you look carefully, you can find a lot of data that you can use as a benchmark. Brand awareness, for example, could be difficult to measure precisely, but site traffic, Net Promoter Score, and social engagement are all quantifiable if you know where to look.
Here are a few metrics you may start monitoring to better understand how you’re doing in comparison to industry standards:
• Average order value
• Net promoter score
• Site traffic
• Average revenue per customer
• Social engagement
• PPC cost and rankings
• Feedback response rates
What to do if you’re looking to enter a new industry
Benchmarking won’t do if your business growth strategy calls for entering a new sector of the market. To more accurately assess the market opportunity available, you’ll want to learn as much as you can about your new industry.
Before starting your new business, there are a few things you should learn more about, such as:
• Market size
• Market share
• Growth rates
• Brand positioning of competitors
• Pricing and sales rates
4. How to use market analysis to identify market opportunity
Understanding the market, or the elements of the business environment, that may have an impact on the course your organization is taking, is the last piece of the puzzle. There are many external events that could possibly disrupt or even increase your odds of success, including political decisions like Brexit, legal changes like GDPR, and broader economic changes.
It might be challenging to keep up with everything that is happening, but it is critical that you do so in order to make more informed decisions for your company.
The following are a few things you should pay particular attention to:
• Technological developments
• Government regulations
• Geopolitical shifts
• Economic indicators
• Trade policies
• Social and cultural changes
Although much of this research will involve some fieldwork, using customer feedback can help you immediately gauge how seriously your consumers take these concerns.
Customers can be questioned about how these concerns might effect them in surveys, which gives you a wealth of viewpoints and more knowledge to assist inform your strategy for dealing with any potential roadblocks.
How to develop the right growth strategy for your brand
You’ll need a business growth strategy that enables you to capitalize now that you’ve finished a thorough analysis of the market and located the opportunities.
Because they never stop moving forward, companies like Apple, Netflix, and Amazon are able to maintain their growth. Their growth plan is adjusted as a result of their listening to and learning from the marketplaces and, most crucially, their consumers.
It all comes down to creating a reliable brand with lasting appeal. Creating a brand identity and a growth strategy that aims for constant and flexible expansion is crucial. Sure, there are some fast wins that could give you a few additional leads in the near term.
Ultimately, each firm is unique, so what works for one company might not work for you. If you’re still unsure about where to start, let’s look at a few possibilities.
Improve the reputation of your company
How is your brand viewed by consumers? Have you earned a good or bad reputation? Do you even have a reputation for your brand given how well-known it is? There is always space for improvement, regardless of how positive, negative, or neutral your reputation is, and doing so could greatly accelerate your progress.
To begin with, you must ascertain the reputation of your brand, which may be done by starting a client feedback collection process. Reviews and polls are a great place to start, but you can also utilize social listening techniques to find out what customers are saying about your business even though they might be reluctant to say it to your face.
You can leverage any favorable comments you receive to enhance the reputation of your brand. You can utilize them to influence any upcoming marketing initiatives, share them on social media, and include them into your PPC advertising. For instance, if your research reveals that your customers adore your eco-friendly packaging, your upcoming campaign might emphasize just how green your business is!
It’s also important to think about if you’re taking any actions that can damage your reputation. For instance, if you ignore or respond poorly to negative comments, it will harm your relationship with your clients.
Market opportunity examples across the world: Netflix
Over the years, Netflix has filled a variety of market voids. The business started out by mailing out DVD rentals for a monthly charge in 1997. The business had a DVD rental website in 1998 that was in competition with Blockbuster Video, which had physical storefronts.
One of the first profitable online DVD rental businesses, the business had more than a million clients by 2003. When the company launched its streaming service, it had 10 million subscribers by 2009, and Blockbuster declared bankruptcy the following year. As of 2022, Netflix has 200 million subscribers worldwide and is available in 190 countries.
Your employees are the face of your company, so whether you know it or not, if they’re unhappy, they’ll be talking poorly about it. This may have a long-term negative effect on your reputation and stunt the development of your brand.
Additionally, it can make your initiatives unsuccessful, as was the case with Starbucks’ recent transgender acceptance campaign. Unfortunately, the campaign became viral for all the wrong reasons because the brand values portrayed in the video advertisement didn’t align with how many transgender employees felt.
It is simple to determine where your brand is succeeding and failing from the viewpoint of your employees. Your staff members can voice any complaints, express what they enjoy about their positions, and participate in the development and success of the company by participating in regular anonymous employee engagement surveys.
Even if you won’t be able to accommodate every employee’s request, you still need to demonstrate that you value their input, even if it’s not always favorable.
Focus on customer experience
Isn’t it time you stopped thinking about selling items and started focusing on selling experiences since firms who excel at their customer experience generate 5.7 times more income than the competition?
The economy of experiences is flourishing. 72% of millennials decide to spend their hard-earned money on experiences rather than actual things when making purchases. Due in part to technology, but also to changing consumer behavior that places a premium on shared experiences and the convenience of using smartphones for socializing, sharing, and shopping.
You must first understand what makes your customers tick if you want your firm to benefit from it. However, receiving feedback from your consumers before you start developing a new customer experience-focused growth plan will help you learn a lot about what you’re doing properly and, more crucially, what might be missing from your existing offering. Start building individualized brand experiences that are based on what your clients are telling you they genuinely want by utilizing his insight! removing the uncertainty and providing you an edge over the competitors.
Even though you already have some excellent goods under your belt, you still need to have a product development strategy in place if you want to stay ahead of the competition. You must be able to stand out in a crowded market, and distinctive goods and services are a wonderful method to achieve this. In addition to helping you keep your current consumers, fresh product advancements can draw in new ones.
To create a successful product development plan, you must first understand the needs of your target market. Consider:
• What your customers need
• What needs to be improved
• What your competitors are doing
Engaging your customers in your strategy is one of the finest methods to learn this information. To get input for improving your product offering, create surveys, read reviews, organize focus groups, and execute beta tests on new items. This will not only guarantee that you are producing goods that consumers value, but it will also strengthen your relationship with your current clientele because they will feel invested in the expansion and success of your business. If you want to expand your business, you need to check both of these boxes: this can assist increase customer loyalty and draw in new clients.
What is the difference between market research and market opportunity analysis?
Consider that you are in charge of putting up an ice cream counter in a shopping center. How would you approach the whole thing?