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Market Opportunity & Analysis Part 2. CPS 181s Jan 21, 2003. Future Case Studies. 500 words initial post and each response Raise questions, point out contradictions What was fascinating, what did you struggle to understand? Extrapolate future areas of inquiry

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future case studies
Future Case Studies
  • 500 words initial post and each response
  • Raise questions, point out contradictions
  • What was fascinating, what did you struggle to understand?
  • Extrapolate future areas of inquiry
  • Focus on ideas, depth and critical analysis
  • Use other resources for research
grading
Grading
  • Each Case Study (9) - 40 points
  • Case Discussion Leader - 50 points
  • In-Class Assignments - 80 points
  • Class Participation - 50 points
  • Midterm Project Progress Report - 100 points
  • Final Project Presentation - 400 points

Total = 1040 points

tools techniques to determine where will business compete
Tools & Techniques to Determine Where Will Business Compete?
  • Customer needs?
  • Financial opportunity?
  • Competitors?
  • Company resources or partners to fulfill needs?
framework for diagnosing market opportunity
Framework for Diagnosing Market Opportunity

What is the Playing Field for the Business?

Identify Unmet and Underserved Needs

5 Conditions

To Satisfy

Identify Target Customer Segments

Company’s Capabilities that Bring Opportunity or Advantage

Assess Competitive, Technical and Financial Opportunity Attractiveness

Make Go / No Go Assessment

does segmentation matter
Does Segmentation Matter?
  • Can you give an example of a company that segments the market?
  • Do you feel segmentation increases profits?
  • Does it make any difference in the on-line world?
  • Does it provide any value to the customer?
  • Does segmentation facilitate customization or personalization?
which is better analysis vs no analysis
Real goal is to reach critical mass with key customer segment in as short a time as practical

No-analysis blind alleys, partner negotiations, and customer complaints bog a company down if they don’t sort out a clear opportunity path from the start

Second and third movers capitalize on the mistakes of other to get more customers for less cost

No-analysis may feel like moving fast without assessment, but actually generating more heat than light

Speed not precision (=lost time)

Network economics capitalize on first-mover momentum

Rapidly connect and lock in large numbers of customers

Large customer base provides lower costs

Old rules no longer apply, a company is better off learning by doing

Which is Better? Analysis vs No Analysis
trapped value vs new value
Create more efficient markets

Create more efficient delivery (value) system

Enable ease of access

Disrupt current pricing power (consumer power)

Customize offerings

Radically extend reach and access

Build community

Enable collaboration-across people, location, time

New functionality or experience

Trapped Value vs New Value
tools
Tools
  • Segment Prioritization Chart?
segment prioritization chart
Segment Prioritization Chart

Occasion

Trip Purpose

Personal

Business

Flexibility

Who

Last Minute

All Other Trips

Business Trips

Students on Vacation

Students Going Home

Students

Retirees

Retirees

Low – Middle Income / Not Frequent Fliers

Low / Mid Income on Getaways

Low / Mid Income Families on Vacation

Other Low / Mid Income on Vacation

Demographics and Behavior

Middle – Upper Income / Frequent Fliers

High Income Families on Vacation

Total Number of Trips = 45%–55% of the Market

High Income Non-Family Trips

Group Trips

Groups

= Approximately 45%–55% of the Total Market

= Primary Focus

tools1
Tools
  • Segment Prioritization Chart
    • Analyze which customer segments to pursue
tools2
Tools
  • Segment Prioritization Chart
  • Competitor Maps (egg diagram)
competitor profiling eastman kodak
Competitor Profiling — Eastman Kodak
  • HP
  • Olympus
  • cameraworks.com
  • Snapfish

Eastman Kodak

  • Fuji

PurchaseCamera

Purchase Accessories

Purchase Film

  • Moto Photo

Take Pictures

Store Pictureson CD

Direct Competition

IndirectCompetition

Digitally ManipulatePictures

SharePictures

  • Seattle Filmworks
  • AdobeSystems

Download and Choose Pictures to Print

Print and Receive Pictures

  • Geocities
  • Shutterfly
  • District
  • Ofoto
  • Snapfish
  • HP
tools3
Tools
  • Segment Prioritization Chart
  • Competitor Maps (egg diagram)
    • Underserved areas
    • competitor strengths
    • potential collaborators
tools4
Tools
  • Segment Prioritization Chart
  • Competitor Maps (egg diagram)
  • Competitor Mapping to Selected Customer Segments
tools5
Tools
  • Segment Prioritization Chart
  • Competitor Maps (egg diagram)
  • Competitor Mapping to Selected Customer Segments
    • Unconstrained opportunities
    • segment interactions
    • growth potential
tools6
Tools
  • Segment Prioritization Chart
  • Competitor Maps (egg diagram)
  • Competitor Mapping to Selected Customer Segments
  • Opportunity Assessment Chart
tools7
Tools
  • Segment Prioritization Chart
  • Competitor Maps (egg diagram)
  • Competitor Mapping to Selected Customer Segments
  • Opportunity Assessment Chart
    • Overall effect considering all factors
    • Managers assess magnitude of company’s impact
go no go assessment opportunity story rough draft of business plan
Go/No-Go Assessment (Opportunity Story) =Rough Draft of Business Plan
  • Describe target segment within selected value system
  • Articulate high-level value system
  • Spell out customer benefits
  • Identify critical capabilities and resources needed to deliver customer benefit
  • Categorize critical capabilities as in-house, build, buy, or collaborate
  • Describe how company will monetize the opportunity (i.e., how it will capture some portion of the value that it creates for its customers)
  • Provide an initial sense of the magnitude of the financial opportunity
schwab unmet and underserved needs 1997 timeframe
Schwab: Unmet and Underserved Needs (1997 Timeframe)

Process Steps

Unmet and Underserved Needs

Plan Savings Goal

  • Planning tools to simplify goal setting

Determine Optimal Asset Allocation

  • Education on investing

Receive Ideas and Recommendations

Research Stocks

  • Aggregation of investment information

Place Order

  • Place order and track status anytime, anywhere

Track Portfolio Performance

  • Access real time account information

Receive Dividends

Sell Stock

  • Place order and track status anytime, anywhere

Tax Reporting

  • Download to tax software
schwab opportunity attractiveness vs resource availability
Schwab — Opportunity Attractiveness vs. Resource Availability

Quality

Information

High

Customer

Service

Quality

Advice

Opportunity Attractiveness

Low

Low

Price

Full

Management

Low

High

Resource Availability

Note: Opportunity attractiveness based on competition level and opportunity financials

schwab resource availability

Capability highly addressing segment need

Capability moderately addressing segment need

Capability not addressing segment need

Schwab Resource Availability

Segments

Company Capabilities

Partner Capabilities

Overall

effectiveness of different segmentation methods

= Low

= High

Effectiveness of Different Segmentation Methods

Segmentation Methods

Segmentation Criteria

needs based segmentation charles schwab

“Saving For a Goal”

“Financial Planning”

“Traders”

  • Saving for retirement
  • Saving for college
  • Saving for house down payment
  • Estate planners
  • Tax planners
  • Trust fund managers
  • Hobby investors
  • Active traders
Needs Based Segmentation: Charles Schwab

Schwab’s market segments fall into three categories

Source: Jeffrey Veen, Hot Wired Style, Monitor Analysis

schwab segmentation 1997 timeframe

Secondary Priority

High Priority

Tertiary Priority

De-emphasize

Schwab Segmentation (1997 Timeframe)

Other White Collar

Blue Collar

Retiree

University Student

High Net Worth (<$1M)

Buy and Hold

Frequent Trades

Current Offline Schwab Customer

< 30

Single

> 30

No Children

Not Schwab Customer

Married

Children

Mature( > 55)

schwab competitor map to segments

High performance level

Low performance level

Schwab — Competitor Map to Segments

Medium performance level

case study virtual vineyards
Case Study – Virtual Vineyards
  • What are the market conditions that allow VV to provide value to suppliers? To end-users. What end-users does VV target?
  • What is the business model of VV?
  • How has VV established its acknowledged dominance of virtual retailers in this category? What are the resources that VV has used to develop this dominance?
  • What are the attributes of a high quality retail service when it is delivered screen-to-screen rather than face-to-face?
  • What additional actions might VV take to enhance their position in the marketplace?
  • What are the major problems confronting online firms when they attempt to craft a unique, sustainable business model?
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