Select Which Markets to Grow
You are responsible for generating billions of dollars in new revenue in the coming years. Where do you begin? You begin by selecting the markets in which you will offer new products and services that will have the potential to generate that revenue. This may mean investing more heavily in markets you have already entered, or it may mean entering altogether new markets. A company’s market choices can make or break its ability to grow, yet many companies struggle to make the right decisions. Part of the problem lies in how companies define a market.
In Outcome-Driven Innovation®, the focus is on the jobs people are trying to get done, so the starting point in defining a market is the job. In order to help customers get a job done better, you have to know what the job is and who is trying to get it done. The people trying to get it done are the job executors. When you know the job executors and the job, you have defined the market of interest – and defined it in a way that makes predictable innovation possible.
Having defined the market in this manner, the next step is to analyze how attractive various markets are. Simply stated, a market is attractive for pursuit when it consists of a large number of job executors, executing a job frequently, who are both dissatisfied with their ability to execute the job effectively and willing to pay handsomely to get the job done perfectly. The ODI approach thus enables the discovery, sizing, and evaluation of new and emerging markets, as well as evaluation of existing markets.
Defining a market in this manner provides a company with a unit of analysis that can be studied. Using this approach, a company is able to dissect the job of interest and see exactly where the executor is struggling to get the job done. This makes possible the development of targeted solutions to help the executor overcome those difficulties and get the job done better. By contrast, when a market is defined in terms of the product employed (the cell phone market) or the technology used in a product (the semiconductor market), it becomes difficult to figure out what job to address or where and how to improve it.
It is not always easy to choose which job executor and job to target. A company may, for example, create products and services associated with surgery – a complex domain that includes several job executors (surgeons, nurses, managers, anesthesiologists) executing several different sets of jobs. A company might choose to target nurses who prep the patient for the procedure, surgeons who open the patient, or managers who prepare the surgical suite.
Strategyn’s market selection framework will help a company organize the inherent complexities and make the right market selection decisions.
