Framing the Market Opportunity
Chapter 2
Dr. Inas A.Hamid
When should we analyze market
opportunity?
 Market opportunity analysis is an essential tool:
 Launching new business whether:
 Startups
 New ventures within an existing business.
The first key question that a company must address:
“ where will the business compete?
Where
customer
needs are
not fully
meet.
There are
few or no
competitors
There is a large
financial
opportunity
Should market opportunity analysis in networked
economy differ from an analysis in more traditional
sector?
P.32-34.
 Some authors and analysts said ; yes it should, because:
Competition
occurs
across
industry
boundaries
Competition
occurs between
alliances of
companies (coopetition).
Advances in
technology lead
firms to introduce
a new version of its
product rapidly.
Consumer
behavior still in the
early stages of
being defined.
Interacting with
customers 24/7.
Market-Opportunity Analytical
Framework
 It consists of five stages followed by a go/no go decision.
 These stages are not sequential and depending on the situation.





Step 1: investigate opportunity in an existing or new value system.
Step 2: Identify unmet or underserved needs.
Step 3: Determine target customer segments.
Step 4: Assess resource requirements to deliver the offering.
Step 5: Assess competitive, technological and financial attractiveness
of opportunity.
 Step 6: conduct a go/no-go assessment.
Step 1: investigate opportunity in an existing or new value
system.
 Value system: the entire chain of suppliers, distributers,
competitors, buyers, and intermediaries that bring an existing
offering to market.
 A firm is made up of a series of connected activities that result in
the creation of an end product or the delivery of a service that
result in the creation of an end product.
 So in this step the company should identify the arena where the
new company will participate.
Purchasing
inputs
manufacturing
Marketing
and sales
Product
delivery
After sales
support
 So in searching for an opportunity Networked-economy companies
try to:
1. Create more efficient markets: by lowering search and transaction costs,
so customers can buy the best for them at a lower net cost.
For example : A web can bring suppliers and buyers of products and
services for small business. Customers can submit a proposal request,
and qualified suppliers give quotes. The entire transaction can be
arranged over the web.
2. Create more efficient value system: compressing steps in a current value
system can result in saved time or cost.
3. Create new-to-the world benefits. These benefits can enhance an
existing offer or become the basis for a new offer by at least three
ways:
 Customize offerings, that means companies can allow customers to
customize products or services, or removing features that customers do
not value.
 Build community: The internet enables efficient community building, as
seen in the explosion of chat rooms.
 Introduce new to the world functionality or experience.
 Enable ease of access.
Step 2: Identify unmet or underserved needs.
 What the customers need?
 Are these needs currently being met by other
companies in the market, and if so, why will customers
choose the new business over the competition?
 Customers will switch only if the new company does a
better job of meeting some set of needs and effectively
communicates its value proposition.
Customer decision mapping process.
 It is a framework to help managers look systematically for unmet or
underserved needs.
 The customer decision process:
Pre-purchase
Purchase
Post-purchase
 Mapping the CDP may help generate new ideas about unmet needs.
 For example: examining the process that people go through to buy
books might identify the fact that people rely on recommendations
from other, So Amazon.com created a feature where customers can
read reviews and comments from others., so they can get the
information they need to make purchase.
3- Determining target market
 There are some who have begun to question whether
segmentation applies in the online world. Because the
online world enables consumers to customize products,
services , and information, the segmentation concepts
has given away
4- Assess resources requirements to
deliver the offering
 A company must bring a set of distinct resources to win in the
market.
 The company should determine what capabilities and
technology will be needed to deliver its benefits of the offering.
 Resources of a company can be grouped into three
classifications:
 Customer-facing. Include brand name, well trained sales force and
distribution channels.
 Internal. Resources associated with the companie,s internal
operations.( technology, experienced staff).
 Upstream. Resources associated with a company,s relationship to
its suppliers.
5- Assess competitive,Technological and Financial
attractiveness of Opportunity
There are many factors to determine the character of the
opportunity:
The number and
identity of
competitors
The level of unmet
needs.
The level of
interaction between
major customers
segments.
The rate of growth
How easy it is to
enter the space and
to differentiate the
company from
competitors?
Is there sufficient
penetration of the
technologies that
enables the customers
to participate?
6- Conduct Go/No-Go Assessment
 Conducting market opportunity assessment is an
important tool for managers to identify areas where
their company can compete.