Grow and Stay Strong in a Market
Updated: Oct 1, 2021
By: Melka Girma
Sure, there is some luck involved in building a successful business. But we, like most successful business people, believe you can make your own luck. An important foundation of making your own luck is a) Understanding your context and ‘Market Universe’ and b) deep and specific assessment of your opportunity or project.
Market Universe - Blue Oceans Vs Red Oceans
There are a whole bunch of ways to think about the types and natures of your business environment. One that we’ve found particularly helpful is based on a book called ‘Blue Ocean Strategy’. Basically, under this approach the market universe is composed of two types of oceans: red oceans and blue oceans . Red oceans are all the industries in existence today – the known market space. Cut-throat competition in existing industries turns the ocean bloody red. Hence the term ‘red ocean‘. Red ocean strategy is all about competition. As the market space gets more crowded, companies compete fiercely for a greater share of limited demand. Competing in red oceans is a zero-sum game. A market-competing strategy divides existing wealth between rival companies. As competition increases, prospects for profit and growth decline.
Blue oceans on the other hand are all the industries not in existence today – the unknown market space. Unexplored and untainted by competition, ‘blue oceans’ are vast, deep and powerful in terms of opportunity and growth.
Blue ocean strategy creates new demand. Companies develop uncontested market space rather than fight over a shrinking profit pool. Creating blue oceans is non-zero-sum. There is ample opportunity for growth that is both profitable and rapid. Opportunities come in many different shapes and sizes, therefore the key and first step towards success is to identify them as such.
2. Market Opportunity Assessment – a key to Grow and Stay
Understanding your market and environment are key to understanding your prospects and investing your time and resources effectively. Constant growth and profitability are never a guarantee. With advancements in technology, life cycles of products and services keep shortening. Additionally, business models keep changing and new competitors enter from various industries. In addition, new sectors which were traditionally solely reserved for local players or the government are now being opened to the international market. This persistent instability of markets makes it very crucial for businesses to seek new market opportunities to grow and stay in a market. No company can survive without moving forward, and moving forward means analyzing more and more opportunities.
Depending on the nature of your business there are different kinds of market opportunities - growing the existing business, creating new business (es), growing the periphery/ancillary of existing business or pivoting during a crisis (like Covid-19). Any organization will benefit from identifying opportunities of where and how they can reach more people and potential clients. Opportunity Analysis results can be used for:
Business expansion / growth opportunities and determining modes of entry for organizations;
Evaluating and support viability of a business going forward (i.e., market share and potential projections given specific company or economic scenarios);
Evaluating and improving current business performance (support specific product/service delivery and operations improvements, and strategic support for general business improvements and;
As an entrepreneur you have ideas but turning those shower ideas into a business opportunity requires further investigation. That is where market opportunity analysis comes in. Not many organizations – no matter whether they are start-ups or corporations – have the time, the resources, and the expertise to conduct a broad and thorough market opportunity assessment. While you and your team may have many new business ideas you want to explore, you do not have time to head down every path. Some of those paths may even end up being dead ends. You are probably wondering how to choose which ideas to pursue, and which ones to let go of. Verdant Consulting PLC, with its intensive experience of primary and secondary research, can help you narrow down your options to the ones with the greatest potential and help to - identify competition, understand your audience, and uncover potential risks.