A new business opportunity can open up greater revenue streams for your business. But even the best, most innovative products or services risk failure if their audience’s needs aren’t properly considered. Are you sure you are not backing the wrong horse?
When analysing potential business opportunities, we recommend an opportunity analysis framework that identifies risks across five key areas:
1. Risks posed by customer preference
Under-met or under-served customer needs create opportunities. If you can fill a gap, you’re onto a winner, especially if your offering meets all of the value drivers customers desire. But why should customers choose your product or service over those offered by competitors – especially competitors who are already established in this particular market? It’s likely you’ll need to adjust your value propositions and possibly your entire offering to align with the needs of the new environment.
2. Risks posed by brand perception
Your rate of success can also be influenced by the perception of your brand. It’s vital to know how your brand is perceived and how this will affect the acceptance of your new product or service. Are you sure that your customers’ perception of your brand matches up to your own image of your brand? Will people buy in to the new service straight away, or will you need to put in extra work to build up their approval? Perceptual Mapping is a technique that can help your business understand how the market perceives your brand. Data, collected from your audience, is plotted on a chart, showing how your market perceives your brand in relation to those of your competitors. Perceptual maps compare the attributes of a brand or product and display ideal combinations in a visual diagram. Not only is it a great way to see how your market perceives your brand, but you can then use this information to develop marketing activity that closes the perceptual gap.
3. Risks posed by your own internal limitations
After placing great effort into getting your new product or service ready for launch, it’s time to make sure other internal factors that will impact your performance have been addressed. Do you have enough resource and skill for effective marketing in this new environment? Are clear processes in place for managing the new service and do they focus on customer needs? Is your customer service team prepared to deal with all possible eventualities? Are your ready operationally? You’ll also need to plan your investment in the new product or service, ensuring your budget fully supports the costs of bringing it to market. Are your systems ready to bill accurately for all sales of your new product or service? Are management reports in place to provide visibility of performance?
4. Risks imposed by technology
Technology influences many markets and their adoption of new products or services. Some of our clients, for example, offer cloud-based applications. Here, the need to analyse risks imposed by alternative technologies is obvious. But we’ve also seen what can happen in environments where technology is not considered a big influence. Have you considered the possibility that some of your target markets just aren’t ready for your new technologies or technology-based processes? On the other hand, some markets may already be ahead of you in terms of technology. Never underestimate the need to conduct a thorough analysis of the technology environment.
An opportunity analysis based on our suggested framework will help you make more informed decisions. You’ll be able to identify whether or not this new product launch or implementation is likely to offer your business real benefits. Is it worthwhile? Will the new product generate enough revenue to justify the process? Are you likely to encounter any negative effects to your business and what are they? Ultimately, an opportunity analysis, when performed correctly, will help you determine if your product is needed, whether it will be accepted, and what influences might affect its profitability.
If you have any questions or you’d like help with your opportunity analysis, we’re here to help. Contact KG Moore on 01206 646 006.