How Do We Identify New Markets?
Identifying new markets is exciting and scary at the same time. It’s exciting because the organization has the opportunity to grow its business, and it’s scary because executives need to identify not just new markets, but the “right” new markets.
In order to figure out the right new markets, executives need to take the time to create a well-defined plan that takes into account external and internal factors, which have an impact on the new market. Let’s take a closer look at external and internal factors.
BusinessDictionary.com defines external factors “as outside influences that can impact a business. Various external factors can impact the ability of a business or investment to achieve its strategic goals and objectives. These external factors might include competition; social, legal and technological changes, and the economic and political environment.”
When identifying new markets, you must have a clear understanding of your potential client population in order to determine if this is a good potential market. In line with this, you will need to understand what customers want and if they have any special decision-making concerns in order to determine if there is a need for your product or service in this arena. Additionally, you need to understand what competition is out there and how does their product/service compare to yours. Another critical piece is understanding the emerging trends and how they will impact your business both short and long term. Have you taken the time to perform an external analysis for your business?
Now, let’s take a look at internal factors. BusinessDictionary.com defines internal factors as “inner strengths and weaknesses that an organization exhibits. Internal factors can strongly affect how well a company meets its objectives, and they might be seen as strengths if they have a favorable impact on a business, but as weaknesses if they have a deleterious effect on the business.”
When looking at internal factors, there are really three elements you need to consider. The first is your structure. Your organization needs to be structured so you can serve your markets and customers without compromising your vision and values. The second are your resources. It is critical you have the resources available to service your markets and customers. Finally, you need to understand your areas of strength and opportunities as well as your areas of limitations and threats. Have you completed an internal analysis?