by Kenneth Rudich
In today’s marketplace, every business is feeling the pressure of having to remain agile, keep pace, and make the right moves at the right time. For many, their survival depends on it, and they often have a small margin for error.
A big part of staying on top of this challenge rests with the ability to effectively scan the market and retrieve information about it that is both timely and relevant to their business. Such information should provide a foundation for making informed decisions about what to do next.
the market opportunity scan
This is where the Market Opportunity Scan enters the picture. It encourages an organized approach for regularly assessing the market outlook of the business.
One aspect is to make sure the information is relevant, which requires a determination of what qualifies as desirable in terms of quality and scope. The scan should be business-specific, and it should be comprehensive enough to give people a good complement of what they need without trespassing into information overload.
Regular assessment speaks to the concern for timeliness. This means it should be replicable in design, and that it should be routinely monitored.
In the final analysis, the objective is to support the Strategic Learning Cycle of the business as was discussed in an earlier post.
the basic elements of a market opportunity scan
The market opportunity scan encompasses those parts of the value chain that are highlighted in yellow up above. These areas exert the most influence on what can or should be done across the value chain as a whole.
It concentrates on achieving three broad objectives:
- Analyze the composition of the customer base for your business
- Recognize the impact of the external forces on your business
- Reconcile the implications of both as they converge on your value chain
For now, I’ll give a brief overview of the activities involved within each of these objectives. Later posts will discuss them in greater detail.
As you read this content, bear in mind that part of the overall goal is to help you establish a business framework for developing timely strategies and tactics. As always, the focus is on creating a value chain that will deliver value fulfillment.
analyzing the customer base
The customer base consists of the current and potential customers for your business. There are two vantage points from which to survey the customer base for identifying applicable opportunities:
- Start with existing internal competencies and find related opportunities in the market
- Find a need in the market and develop the internal competencies to fill it
Future posts will examine some different tools and techniques for analyzing the customer base from both of these perspectives.
analyzing the impact of the external forces
The external forces are typically beyond your control but exert an influence on your business nonetheless. The challenge is to navigate the external forces in a way that minimizes the harm when they’re working against you, and maximizes the good when they’re working for you.
My preference is to divide the analysis of the external forces into two categories because each can be substantially influential in its own right, and it makes more intuitive sense to me if they are organized in this manner. The two categories are:
- All the external forces minus your competition
- Your competition by itself
reconciling the value chain implications
Fashioning a value chain that factors in the results of the market opportunity scan involves the ability to transform raw information into knowledge – or more specifically, into applied knowledge. With that knowledge in hand, you might then decide to:
- launch new value chain initiatives
- modify old ones
- leave some current value chain initiatives alone
- stop doing some current value chain activities
More often than not, the real challenge will lie in pinpointing which actions to take and where, particularly when you have to establish priorities in the face of budget constraints. As authors David Kaplan and Robert Norton point out in The Balanced Scorecard, “The essence of strategy is not just choosing what to do; it also requires choosing what not to do.”