framing the market opportunity

Framing the Market OpportunityFraming the Market Opportunity

HelpWithAssignment.com

To introduce the framework for market opportunity analysis

To examine three basic “value-types”

To discuss the identification of unmet and under-served needs

To explore how customers are segmented and targeted

To examine the role of resources in evaluating market opportunities

To discuss how to assess the attractiveness of a market opportunity

To examine eBay’s market opportunity


Market Opportunity Analytic Framework

Three Basic “Value Types”

Use of the Customer Decision Process to Identify Unmet and Underserved Needs

Segmentation and Targeting

The Role of Resources in Evaluating Market Opportunity

Assessing the Attractiveness of a Market Opportunity

EBay’s Market Opportunity

ConclusionHelpWithAssignment.c

om








Conclusion


Influenced by the New Economy

• Competition occurs across industries rather than within industries

• Competitive behavior occurs at unprecedented speed

• Competition occurs between alliances of companies rather than between individual companies

• Easier to influence customer behavior because still in early stages of being defined

• Industry value chains are being reconfigured

Seed Opportunity in Existing New Value System

Identify Unmet and Underserved Need(s)

Identify Target Segment(s)

Declare Company’s Resource-Based Opportunity for Advantage

Assess Competitive, Technical, and Financial Opportunity Attractiveness

Make “Go / No Go” Assessment


Opportunity Analysis Steps Benefit of Step

Step 1: Investigate opportunity in an existing or new value system

Identifies previously unexploited areas of potential market value for further analysis

Step 2: Identify unmet or underserved needs

Uncovers customers decision process and “opportunity nucleus” that a new offering could address

Step 3: Determine target customer segments

Allows a company to craft an offering that will appeal to the target customers

Step 4: Assess resource requirements to deliver the offering

Identifies existing resource strengths and weaknesses needing to be addressed internally or with partners to bring offering to market

Step 5: Assess competitive, technological, and financial attractiveness of opportunity

Determines the character and magnitude of the opportunity; establishes barriers to entry and potential rewards

Step 6: Conduct go/no-go assessment Determines whether the opportunity is attractive enough to pursue









Conclusion


More Efficient Markets

More Efficient Value Systems

Customize Offerings

Build Community

Introduce New Functionality or Experience

Disrupt Pricing

Ease Access

Radically Extend Reach

Trapped Value New-to-the-World Value

Hybrid Value


Trapped Value More efficient markets lower search and transaction costs

• Bizbuyer.com

• Lending Tree Inc.

• OffRoad Capital Corp.

More efficient value systems compress or eliminate steps in an existing value system

• Amazon.com

New-to-the-World Value

Customizing offerings allows customers to add and remove features

• Yahoo

• Quicken.com

Build communities to leverage customers’ participation

• Zeal.com

Introduce new functionality to transform all or part of an industry value chain

• e-books

• Internet telephony

Hybrid Value Disrupt pricing and change pricing-power relationships

• MySimon.com

Enable ease of access and help customers find products

• Abebooks.com

Extend reach and welcome distant customers

• Distance education









Conclusion


OriginationOrigination

Information Gathering


EvaluationEvaluation

Purchase DecisionPurchase Decision

Postpurchase Evaluation and

Behavior


Behavior

Pre-purchase

Purchase

Post-purchase

What prompts the customer to action?

What factors influence the customer’s decision?

What attributes of the product does the customer consider?

What options does the customer identify?What decision(s) does he make?

What does the customer do about his decision?

A framework to look systematically for unmet or underserved needs

Because value creation is basedon understanding

and meeting customer needs.

Because value creation is basedon understanding

and meeting customer needs.








Behavior


Behavior

Personal usePersonal use GiftGift

FeaturesFeatures Manufacturer/Brand

Manufacturer/Brand

Type(digital/film)

Type(digital/film) CostCost

Likelihood of repeat purchase or

recommendation

Likelihood of repeat purchase or

recommendation

Pre-purchase

Purchase

Post-purchase

FilmFilm DigitalDigital InstantInstant

APSAPS BasicBasic Fully loadedFully

loaded

ComplexityComplexity Usage occasions

Usage occasions ReviewsReviews Past

ExperiencesPast

ExperiencesBudget

constraintsBudget

constraints

Print qualityPrint quality ReliabilityReliabilityLearning

curve/ease of use

Learning curve/

ease of use

Range of accessories

Range of accessories

35mm35mm

Body TypeBody Type LensLens

ZoomZoom FixedFixedSLRSLR Point & shoot

Point & shoot

Throw-away

Throw-away StandardStandard







Behavior


Behavior

Pre-purchase

Purchase

Post-purchase

Likelihood of Repeat or Referral

Likelihood of Repeat or Referral

ComfortComfort StyleStyle PhotosPhotos Degree of Memorability

Degree of Memorability

EventEvent BreakBreak

Honey-moon

Honey-moon ReunionReunionHolidayHoliday

Number and Relationship of

Travelers

Number and Relationship of

TravelersWeatherWeatherDuration and

DistanceDuration and

Distance ActivitiesActivitiesBudgetBudget

Travel AgentTravel Agent Travel GuidesTravel Guides PastExperiences

PastExperiences

BrochuresBrochures Chat roomsChat

roomsBooksBooks

Vacation PackageVacation Package

Independently Planned

Independently Planned

World TourWorld Tour CruiseCruise Small-Town Discovery

Small-Town Discovery Beach EscapeBeach Escape Outdoor

AdventureOutdoor

Adventure








Conclusion


Segmentation Type Description Examples of Variables

Geographics Divides market into geographical units

Country, region, city

Demographics Divides market on the basis of demographic values

Age, gender, income, education

Firmographics Divides market on the basis of company-specific variables

Number of employees, company size

Behavioral Divides market based on how customers actually buy and use the product

Website loyalty, prior purchases

Occasion (Situational) Divides market based on the situation that leads to a product need, purchase or use

Routine occasion, special occasion, part of day

Psychographics Divides market based on lifestyle and/or personality

Personality (laid-back, type A), lifestyle

Benefits Divides market based on benefits or qualities sought from the product

Convenience, economy, quality


MeaningfulMeaningful

ActionableActionable

SubstantialSubstantial

MeasurableMeasurable

Customers must demonstrate needs, aspirations or behavioral patterns that are similar within a segment and different across segments

– A distinction between a price-sensitive and a quality-seeking segment is meaningful, since the two segments demonstrate distinguishable sets of needs

A company must be able to reach customers within each segment through effective and targeted marketing programs

– A customer segment consisting of customers with blue eyes is not actionable, since it is very hard to identify and reach only customers with blue eyes

Segments must be large and profitable enough to make the investment in serving them worthwhile

– MyCFO.com is targeted toward high-net-worth individuals, helping them manage their portfolios; even though the number of those individuals is small, the dollar amount managed is sizeable, thus constituting a substantial segment

Key characteristics of the segments (e.g., size and spending patterns) must be easy to measure


Business Education Leisure Leisure Hobby or Special Interest

Collection Business Corporate Education

39

40+

39

40+

39

40+

Purchase Occasion

Reader

Self-Consumption Gift InstitutionalBy

Request

College Education

Moderate Education

Limited Education

Reference and Research Materials

How-To Information

Hobby or Special Interest

Entertainment

For Display

In-Depth Topical Insights and Discussion

How-To Information

RequiredReading

Comp-endium by Topic

Advice and

Recom-mend-ations




39

40+

39

40+

39

40+

Purchase Occasion

Reader


Request

College Education

Moderate Education

Limited Education

Reference and Reference and Research MaterialsResearch Materials

How-To Information


EntertainmentEntertainment

For Display

In-Depth Topical Insights and Discussion

How-To Information

RequiredRequiredReadingReading


Advice and

Recom-mend-ations

High Moderate Low




39

40+

39

40+

39

40+

Purchase Occasion

Reader


Request

College Education

Moderate Education

Limited Education

Reference and Research Materials

How-To Information


Entertainment

For Display

In-Depth Topical In-Depth Topical Insights and Insights and DiscussionDiscussion

How-To Information

RequiredRequiredReadingReading


Advice and

Recom-mend-ations

New Economy Either Traditional









Conclusion


Identify core benefits in the value proposition or clusterIdentify core benefits in the value proposition or cluster

Identify capabilities that relate to each benefitIdentify capabilities that relate to each benefit

Link resources to each capabilityLink resources to each capability

Identify to what extent the firm can deliver each capabilityIdentify to what extent the firm can deliver each capability

Identify partners who can complete capabilitiesIdentify partners who can complete capabilities


UniquenessUniqueness Good resource systems provide benefits, capabilities and activities

that are different from those of competitors

LinksLinks

Good resource systems have links between capabilities and benefits, among capabilities, among resources, and between virtual-world and physical-world business systems

SustainabilitySustainability Good resource systems are difficult for competitors to replicate









Conclusion


CompetitiveVulnerability

TechnicalVulnerability

Magnitudeof Unmet

Need

InteractionBetween

Segments

Likely Rateof Growth

TechnologicalVulnerability

MarketSize

Level ofProfitability

PositiveFactor

NeutralFactor

NegativeFactor









Conclusion


4186

224

431

748

3270

167

335

614

0

100

200

300

400

500

600

700

800

1997 1998 1999 2000 2001

Mill

ion

s o

f d

olla

rs

Net Revenue

Gross Profit


eBay 73%

uBid 17%

Yahoo 3%

Amazon2%

Egghead 5%


Value Type How Extent

Create more efficient markets

Create more efficient value systems

Disrupt market pricing

Hybrid Enable ease of access

Radically extend reach

Customize offerings

New Enable community building

Introduce new functionality or experience

Trapped


Conduct preliminary research on items

Bid

Win?

Seller

Auction House / Dealer Buyer

Realize he or she would like to sell

something

Like to browse or have a specific interest or

need

Research the value of the item and a possible channel for exchange

Research venues / channels for procurement

Choose exchange agent and negotiate

terms

Choose procurement channel

Establish and agree to selling / buying

process

Deliver merchandise

Determine appropriate schedules and

locations

Set auction schedule and choose venue

Attend auction Hold auction

Receive payment Pass a percentage of

proceeds to seller

Pay Receive payment

Receive merchandise Take commission

Notification of when specific items are being sold

Easy channel / venue access Objective listing agent

Passive search and decision process Easy listing process and objectives Ability to list modestly priced items

Improved availability and access Simplified shipping; elimination of two-stage process

Time to conduct due diligence research on items

Time to think about purchase

Ease of payment

Reasonable agent fees

Minimized time lag between merchandise surrender and compensation

Pre

-Pu

rch

as

e P

urc

ha

se

Po

st-

Pu

rch

as

e

Promotional

Behavior

User Demographics

Very High High Moderate Limited None

39

40+

39

40+

39

40+

High Income

Moderate Income

Limited Income

Active Deal-Makers with Means

Active Frugal Collectors

Price-Sensitive

Active Frugal

Collectors

Passive Collectors

Ease

Convenience

Limited Accessibility or Options

History of Responding to Promotions


CompetitiveVulnerability

Magnitudeof Unmet

Need

InteractionBetween

Segments

Likely Rateof Growth

TechnologicalVulnerability

MarketSize

Level ofProfitability

PositiveFactor

NeutralFactor

NegativeFactor









Conclusion


A firm needs to follow a rigorous approach to correctly isolate market opportunities — the market opportunity analysis framework is a six-stage process that addresses this need

The six stages of the framework are: 1) seed opportunity in an existing new value system, 2) identify unmet and underserved need(s), 3) identify and choose target segments, 4) declare the company’s resource-based opportunity for advantage, 5) assess competitive, technological and financial opportunity attractiveness and 6) conduct a “go/no-go” assessment

In assessing the attractiveness of an opportunity, four dimensions should also be considered: 1) competitive intensity, 2) customer dynamics (e.g., unmet needs, likely rate of growth, etc.), 3) technological vulnerability and 4) microeconomics (industry size and profitability)


About the Company: HelpWithAssignment.com is an online tutoring company. Our network spans 3 continents and several countries.

We offer three kinds of services: Assignment Help, Thesis Help and Online Tuitions for students in their college or University.

Visit us at http://www.helpwithassignment.com/

framing the market opportunity

Business

market opportunity analysis

market opportunities

world value hybrid value

basic valuetypes

basic value types

reconfigured seed opportunity

trapped value new

efficient value systems