C

H
4
A
P
T
E
R

FOUR
Understanding
Market
Opportunities

McGraw-Hill/Irwin
©2008 The McGraw-Hill Companies,
1-1
All Rights Reserved
Cell Phones

2005 2 billion users

Third generation phones very
popular 30% in Japan and 93% in
Korea
Developing markets
Manufacturer Market driven by
phones with new features, very
volatile
Some consolidation among
providers
Difficult to get licenses
1-2 4-2
4Cs
Company
Context
Competition
Customer
How attractive is the market we serve or
propose to serve?
How attractive is the industry in which we
would compete?
Are the right resources in places to
effectively pursue the opportunity at
hand?
1-3 4-3
 The Seven Domains of
Attractive Opportunities (Exhibit: 4.1.)

Market Domains Industry Domains

Macro Market Attractiveness Industry Attractiveness

Level
Mission, Ability to
Aspirations, Execute
Propensity on CSFs
for Risk
Team
Domains
Micro
Connectedness up
Level and down Value Chain

Target Segment Benefits Sustainable Advantage

and Attractiveness

1-4 4-4
The Seven Domains of Attractive
Opportunities
Market Domains Industry Domains

Market Attractiveness Industry Attractiveness

1-5 4-5
Discussion Question

1.What’s a market?

1-6 4-6
Discussion Question

2. What’s an industry?

1-7 4-7
Discussion Questions

3. Is the market vs. industry

distinction important?

Why or why not?

1-8 4-8
Discussion Questions

4. Do macroenvironmental
trends matter?

What are their implications?

1-9 4-9
Macro Trend Analysis:

Demographic environment
Sociocultural environment
Economic environment
Regulatory environment
Technological environment
Natural environment

1-104-10
1-114-11
1-124-12
1-134-13
1-144-14
Discussion Question

Let’s identify a trend or two of

each type and consider what
businesses might be affected.

1-154-15
Discussion Question

5.What are the key questions a

macro trends analysis should
answer?

1-164-16
Discussion Questions

6. Does industry attractiveness

matter? Why or why not?

1-174-17
 A Tool for Assessing Industry
Attractiveness: Porter’s Five Forces
Threat of new
entrants

Bargaining Rivalry among Bargaining

power existing industry power
of suppliers firms of buyers

Threat of substitute
products

Source: Adapted from Michael E. Porter, “Industry Structure and Competitive Strategy: Keys to Profitability,” Financial Analysts Journal, July-August 1980, p. 33.
1-184-18
1-194-19
Discussion Question

7. If you are preparing a

marketing plan, where’s the
best place to look for
information about macro
trends?

1-204-20
Discussion Question

8. What’s the difference between

the macro and the micro level
of analysis?

1-214-21
 The Seven Domains of
Attractive Opportunities
Market Domains Industry Domains

Macro Market Attractiveness Industry Attractiveness

Level
Mission, Ability to
Aspirations, Execute
Propensity on CSFs
for Risk
Team
Domains
Micro
Connectedness up
Level and down Value Chain

Target Segment Benefits Sustainable Advantage

and Attractiveness

1-224-22
Understanding Markets at the Micro
Level

• Involves looking individually at

customers to understand the
attractiveness of the target segment

1-234-23
Understanding Industries at the Micro
Level

• Involves looking at the company

and whether it has a sustainable
competitive advantage

1-244-24
1-254-25
1-264-26
 The Seven Domains of
Attractive Opportunities
Market Domains Industry Domains

Macro Market Attractiveness Industry Attractiveness

Level
Mission, Ability to
Aspirations, Execute
Propensity on CSFs
for Risk
Team
Domains
Micro
Connectedness up
Level and down Value Chain

Target Segment Benefits Sustainable Advantage

and Attractiveness

1-274-27
The Team Domains

• Opportunities are only as good

as the people who will pursue them

1-284-28