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Framework for Market Opportunity. Seed Opportunity in Existing New Value System. Identify Unmet and Underserved Need(s). Identify Target Segment(s). Declare Company’s Resource-Based Opportunity for Advantage. Assess Competitive, Technological, and Financial Opportunity Attractiveness.

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framework for market opportunity
Framework for Market Opportunity

Seed Opportunity in Existing New Value System

Identify Unmet and Underserved Need(s)

Identify Target Segment(s)

Declare Company’s Resource-Based Opportunity for Advantage

Assess Competitive, Technological, and Financial Opportunity Attractiveness

Make “Go / No-Go” Assessment

framing the market opportunity
Framing the Market Opportunity
  • MSN CarPoint identified an opportunity to leverage the Internet to deliver customer value in the car industry

Leverage the Internet to Improve the Consumer Car-Buying Process

  • The retail car-buying process was frustrating and inefficient:
    • Little information available to the consumer
    • Bargaining with salesperson viewed as an hassle
    • Long process overall

Car Buyers Are Dissatisfied With Current Retail Car-Buying Process

  • MSN CarPoint selected two primary target segments for its service:
    • “The intimidated by the process”
    • “The information seekers”

Shoppers Who Feel Intimidated by Sales People and Look for More Efficient Way

  • MSN CarPoint could leverage Microsoft’s expertise in software development, its brand name and its multitude of online properties

Microsoft’s Software and Free Placement on All Its Websites

  • Competition was getting fierce with more and more online car services entering the market…
  • But the financial opportunity was large: 66% of new car buyers were estimated to use online services in 2000

How Big Is the Online Car-Buying Market? Who Are CarPoint’s Main Competitors?

  • In 1996, the first version of CarPoint was shipped
  • By 1998, CarPoint was driving $5 million in car sales a day

Make “Go / No-Go” Assessment

Competition Occurs Across Industry Boundaries Rather Than Within Industry Boundaries
    • Web-enabled business models often lack theconstraints of physical product manufacturing and service delivery
    • Can match value creation from the customer’s perspective
    • Ex. CarPoint: customer can
      • Research
      • Purchase
      • Finance
      • Obtain insurance
    • all at one place
  • Lesson: Do not limit opportunity assessment to narrow or traditional definitions of industry or value systems
Competitive Developments and Responses are Occuring at an Unprecedented Speed
    • Advances in technology and the adoption of Creative Business Models are occuring rapidly!
    • Ex. Browser Wars
      • Microsoft vs. Netscape in late ‘90s
    • Q: How often do you think new versions appeared?
    • A: Approximately every six months.
  • Lesson: Keep abreast of important trends that could redefine opportunity attractiveness.
Consumer Behaviour is Easier to Influence and Change
    • Companies can introduce products that lead to new behaviour and customer requirements
    • What companies have greatly influenced the music industry and how?;What technology have these companies taken advantage of?;What other industries have also been affected by this trend and how?
Competition occurs between alliances of companies rather than between Individual Companies
    • Ex. Browsers depend on operating systems, PCs and modem technologies
    • Co-opetition
      • Companies as both competitors and collaborators
Industry Value Chains, or Systems are Rapidly being Reconfigured
    • What are some ways in which the Internet has allowed businesses to reconfigure customer interaction?
      • 24/7 interactions
      • Increasing the level of information throughout the value chain
      • Eradicates or reduces the cost of some value chain stages
    • Ex. Job Placement / Executive Recruiting industry
      • Now a two-way exchange (employers search resumes; job seekers search postings)
        • Greatly enhances the access and reach of individuals in this marketplace
Value Systems
    • An interconnection of processes and activities within and among firms that creates benefits for intermediaries and end consumers
    • entire chain of suppliers, distributors, competitors, buyers and intermediaries
    • Often a value system can be reinvented in the networked economy
three value types for new business possibilities
Three Value Types for new business possibilities

1. Trapped Value

  • Unlock trapped value by creating:
  • A. more efficient markets by lowering search and transaction costs
    • (How does Lending Tree ( do this?)
  • B. more efficient value systems by compressing or eliminating steps in a current value system
    • ex. distribute in-house, technical documents over the web
three value types for new business possibilities10
Three Value Types for new business possibilities

2. New-to-the-World Value

  • Enhance an existing offer or become the basis for a new offer by:
  • A. Customizing Offerings
    • How does do this?
  • B. Building Communities
    • What are some community building tools
    • look at for examples
    • Q: What marketing lever is best exploited through community building?
    • A: Viral Marketing
  • C. True New-to-the-World Functionality or Customer Experience
    • Most famous example is Napster with file-sharing (peer-to-peer) and the MP3 file format
    • How does create true new-to-the-world functionality
three value types for new business possibilities11
Three Value Types for new business possibilities

3. Hybrid Value

  • synergy between both Trapped and New-To-The-World Value by:
  • A. Disrupting Current Pricing by creating transparency in the retail industry and offering unbiased information
    • What are two ways in which does this?
  • B. Enabling Ease of Access by creating portal sites (ex or internet channels for existing stores (ex.
  • C. Radically Extending Reach by extending the boundaries of an existing market or creating a new market by delivering more cost-effective reach
    • any distance learning site
exhibit 2 2 three types of basic value
Exhibit 2–2: Three Types of Basic Value
  • Trapped Value
  • New-to-the-World Value
  • Disrupt pricing
  • Ease access
  • Radically extend reach
  • Customize offerings
  • Build community
  • Introduce new functionality or experience
  • More efficient markets
  • More efficient value systems
  • Hybrid Value