Strategic Opportunity Analysis
Updated: Oct 3, 2022
גירסה בעברית של מאמר זה תוכלו למצוא כאן.
As managers, we often need to seize on business opportunities as they present themselves.
Alas! Not always do we have the necessary time and scope required to do the analysis properly.
Naturally, we may resort to gut feeling, taking the dive...
But how deep is the water, anyway?
Luckily, there is method to the madness - a process available for assessing such opportunities, and we're here to help!
Five Steps And A Single Decision
It's not necessarily easy or short, but these are the stages to take a calculated risk on such opportunities:
Market Sizing and Structure
For-profit companies seek large opportunities, in a market they can understand and compete in.
The first challenge managements face, evaluating new opportunities, is therefore: What the opportunity size is?
Seemingly straight-forward, this could be a devilishly difficult task, for what is your "market", anyway?
Should your solution be unique or innovative enough, the very boundaries of the market tend to change as you look at them from different angles:
- Who are your customers?
- How are they segmented?
- What is the need you are addressing?
- Who would use the product, and who would take the purchasing decision?
- Who competes in this market?
- How are goods and services sold in it?
The next thing is to analyze the market for its players, their offerings, their business models, their pricing, and their target customers. Then we map the market to segments and subsegments on several axes, to find where your company can shine.
Finally, and this can be tricky, we put some numbers in place:
- How large is the market?
- How fast is it growing?
- Is the market saturated? Fragmented? Consolidated?
These questions should give us a sense of the economic potential of the opportunity, and to each company its own aspirations: Some would budge only for global domination of a multi billion market, while others would be content with much humble a goal.
What do your competitors do?
How well do they do it? And what can you do that they cannot?
Understand your competitors positioning and offering:
- What do they say about themselves?
- What core functionalities do they offer?
- To what kind of customers?
- What is their business model?
- And what is the pricing model?
Articulate your own capabilities, offering, and how will you communicate it to the world:
- The features only you will offer
- The price only you can sustain
- The unserved segment you are targeting
- The moat you are to build, preventing others to surpass you
- And how will you capture this into a catch phrase?
Unique Value Proposition
What will you offer that no one else can?