C
H
A
P
T
E
R
4
FOUR
Understanding
Market
Opportunities
McGraw-Hill/Irwin
©2008 The McGraw-Hill Companies,
1-1
All Rights Reserved
Cell Phones
2005 2 billion users
Third generation phones very
popular 30% in Japan and 93% in
Korea
Developing markets
Manufacturer Market driven by
phones with new features, very
volatile
Some consolidation among
providers
Difficult to get licenses
1-2 4-2
4Cs
Company
Context
Competition
Customer
How attractive is the market we serve or
propose to serve?
How attractive is the industry in which we
would compete?
Are the right resources in places to
effectively pursue the opportunity at
hand?
1-3 4-3
The Seven Domains of
Attractive Opportunities
Industry Domains
Market Domains
Macro
Level
Micro
Level
(Exhibit: 4.1.)
Market Attractiveness
Industry Attractiveness
Mission,
Aspirations,
Propensity
for Risk
Ability to
Execute
on CSFs
Team
Domains
Connectedness up
and down Value Chain
Target Segment Benefits
and Attractiveness
Sustainable Advantage
1-4 4-4
The Seven Domains of Attractive
Opportunities
Market Domains
Market Attractiveness
Industry Domains
Industry Attractiveness
1-5 4-5
Discussion Question
1.What’s a market?
1-6 4-6
Discussion Question
2. What’s an industry?
1-7 4-7
Discussion Questions
3. Is the market vs. industry
distinction important?
Why or why not?
1-8 4-8
Discussion Questions
4. Do macroenvironmental
trends matter?
What are their implications?
1-9 4-9
Macro Trend Analysis:
Demographic environment
Sociocultural environment
Economic environment
Regulatory environment
Technological environment
Natural environment
1-104-10
1-114-11
1-124-12
1-134-13
1-144-14
Discussion Question
Let’s identify a trend or two of
each type and consider what
businesses might be affected.
1-154-15
Discussion Question
5.What are the key questions a
macro trends analysis should
answer?
1-164-16
Discussion Questions
6. Does industry attractiveness
matter? Why or why not?
1-174-17
A Tool for Assessing Industry
Attractiveness: Porter’s Five Forces
Threat of new
entrants
Bargaining
power
of suppliers
Rivalry among
existing industry
firms
Bargaining
power
of buyers
Threat of substitute
products
Source: Adapted from Michael E. Porter, “Industry Structure and Competitive Strategy: Keys to Profitability,” Financial Analysts Journal, July-August 1980, p. 33.
1-184-18
1-194-19
Discussion Question
7. If you are preparing a
marketing plan, where’s the
best place to look for
information about macro
trends?
1-204-20
Discussion Question
8. What’s the difference between
the macro and the micro level
of analysis?
1-214-21
The Seven Domains of
Attractive Opportunities
Market Domains
Macro
Level
Micro
Level
Industry Domains
Market Attractiveness
Industry Attractiveness
Mission,
Aspirations,
Propensity
for Risk
Ability to
Execute
on CSFs
Team
Domains
Connectedness up
and down Value Chain
Target Segment Benefits
and Attractiveness
Sustainable Advantage
1-224-22
Understanding Markets at the Micro
Level
• Involves looking individually at
customers to understand the
attractiveness of the target segment
1-234-23
Understanding Industries at the Micro
Level
• Involves looking at the company
and whether it has a sustainable
competitive advantage
1-244-24
1-254-25
1-264-26
The Seven Domains of
Attractive Opportunities
Market Domains
Macro
Level
Micro
Level
Industry Domains
Market Attractiveness
Industry Attractiveness
Mission,
Aspirations,
Propensity
for Risk
Ability to
Execute
on CSFs
Team
Domains
Connectedness up
and down Value Chain
Target Segment Benefits
and Attractiveness
Sustainable Advantage
1-274-27
The Team Domains
• Opportunities are only as good
as the people who will pursue them
1-284-28