Your Market Strategy
Your overall strategy describes, in broad terms, what your organization will become in the future. At the heart of your strategy are statements of values, mission and vision.
These are used as a basis for an overall statement of what your organization will become; which leads to decisions of what you will accomplish to make your vision for the organization a reality. These future accomplishments will, by and large, be concerned with what will happen within your organization to enhance its overall performance.
But one essential part of your strategy needs special attention – your market strategy. It states what you will do in relation to your customers, both current and new. It declares what will happen outside your organization.
Your market strategy describes your future relationship with your marketplace. It outlines the position your company will occupy, the products (goods and services) you will deliver and the client segments that will comprise the bulk of those you serve. It describes the key products – customer relationships that will help your company thrive long into the future.
Creating a market strategy is a unique process that draws upon what has happened in developing the overall strategy. Here is how it unfolds.
Developing a market strategy begins by looking at your current product (goods and services) lines and current customer segments. You begin by listing each product line that you offer across the top of a matrix, and listing current client segments down the side. Then, looking at each intersection of products and clients, you evaluate the returns your organization receives by offering the particular products to the particular clients. You look at what the organization invests – money, effort, frustration and/or time; and estimate the level of return you receive – revenue, pride, recognition, and/or satisfaction. Each intersection indicates whether the overall return on investment is high, moderate or low.
A cluster of entries will have high returns, many will have moderate returns, and some will have low returns. What you have completed is a size-up of your current market in terms of how it affects your company.
Then, it is time to look at your marketplace: i.e. the changing needs desires and tastes of current clients. By considering changing demographics (age, income, education, etc.) of your current client segments and how they are likely to develop in the future, you can identify those needs, desires and tastes which you can expect to endure well into the future, which minor ones will unfold, which new ones will arise, which are expected to fade and which will disappear. When you are done, you will have drawn a picture of the future demands in your current market.
But, you need to unearth potential new markets. Again looking at overall demographics and migration patterns, you can identify new client segments that will endure in the marketplace and those that will arise, unfold, fade and disappear. Then, you can create a future opportunities matrix.
Future Opportunities Matrix
You create the rows of the Future Opportunities Matrix by listing your current customers and adding to them the potential new client segments that you have unearthed. Create the columns by listing today’s product offerings across the top followed by possible new products. The upper left-hand corner of this matrix will be the current opportunities that you have already evaluated. But the remainder provides space for you to evaluate potential new conjunctions of products to clients.
Part of this new area will represent market development, i.e. offering current products to new clients. Part of it will represent product development, i.e. offering new products to existing clients. The remainder will represent market diversification, offering new products to new clients.
As you did with the Current Opportunities Matrix, you can identify those future opportunities that hold potential for high, moderate and low returns by offering particular products to particular customer segments. A cluster of high return opportunities points to potential opportunities for growing your business in new ways.
Now you are ready to determine, for your current clients, which products you will maintain, which you will penetrate deeper into the marketplace and which you will abandon. You will also decide which new products to introduce to your current customers. You can also choose which new customer segments will be offered your current product lines and, possibly, which new products will be developed and offered to new markets.
The collection of all these decisions is your market strategy.
This new market strategy ensures existing revenue streams continue to flow and new streams are developed. Collectively, they ensure that the organization has the resources to make its overall strategy work and that the organization will survive and thrive long into the future.
February 1, 2007
Type the characters you see in the picture left; if you can't read them, submit the form and a new image will be generated. Not case sensitive.