The main reason most businesses aren’t very good at creating sustainable strategies is that they don’t address each of these four critical issues that make up the Discipline of Strategy:
Here we will talk about opportunity.
Opportunity is the demand or market need that your company can fill. It’s crucial to explore that demand to determine if there’s enough gold in them-thar hills to justify the expense of your company trying to meet it. If there isn’t any gold, brainstorm to find another demand or market need. Don’t build a product or company and then try to find an opportunity for it.
That’s what happened with Pets.com. In 1998, its founders thought their idea of selling pet food and supplies via the internet was so good that researching the market would be a waste of time. Venture capitalists agreed and jumped on board, pumping money into the business; even Amazon signed on. The company engaged in a massive advertising campaign, including a $1.2 million Super Bowl commercial. But sales never met expectations, and in November 2000, Pets.com closed after blowing through $300 million.
Things would have been different if the people behind Pets.com had done their market research.
Market research could have told Pets.com what solution they could have offered to make a profit, or established whether the product or service they wanted to sell was needed or desired in the marketplace.
Reliable market research can come up with all kinds of useful information that answers important questions. Are your target customers already using something similar to the product you want to market? Is your product or service superior to the oppositions?
Whether you’re determining your business’s place in the market as an in-house project or you hire a firm, these are the primary forms of market research:
- The primary market, which research gathers information directly from the market, using interviews, surveys, questionnaires, and focus groups.
- Secondary market research analyzes collected data that has been gathered by you or by others.
- Data collection, which is quantitative or qualitative.
Market research can help you understand how and where a product will perform in an existing market. Opportunities can result from a little nudging here, and a little sharper focus there.
To recap, the opportunity is created, not discovered. Whether through careful research and reading of the numbers, or matching trends and technological developments, an opportunity is not something to wait for. Do your homework and take advantage of the openings you find before someone else does.
Don’t build a product or company and then try to find an opportunity for it. Find the opportunity and meet it. And use primary and secondary market research, along with data collection, to determine how your business will meet the needs of the market that you identify.
We’d love to hear from you. How do you look for opportunities in the marketplace? Contact us to schedule your complimentary strategy session to learn how to create sustainable strategies in your organization.