Without a winning strategy your journey has no destination and success would be an accident –they do happen but are unlikely.
At the foundation of strategy is finding a need for a good or service that is either solving a problem or creating a benefit that customers want and will pay enough for you to generate a profit.
Understanding a market by the fundaments is an important first step.
There are 4 questions:
- What is the Market?
- Why does the Market exist?
- Who are the Leaders?
- How will you carve out you niche?
What is the market answers the question of what is being provided to meet a need of consumers of such value that there is a demand. For instance farmers grow the food that people must have unless they grow it themselves or restaurants are a market that serves prepared food. Both meet a defined need.
Why the Market exists is about understanding why the need exists and how that need is addressed. Farmers are needed because in much of today’s society people don’t grow their own food. Restaurants exist to serve people that can’t or don’t want to buy food and prepare it for a variety of reason.
Who are the leaders is about understanding how the market is currently being serviced by the major players of each definitive market segment. This is understanding who, currently, are the major participants such as Kroger, WalMart or McDonalds. These players are market leaders in their respective category. There is great diversity on market segments, how providers service specific consumer groups, and who owns consumer mindshare within each category.
And finally how will you position your product or service to capture enough business to be successful by defining a unique offering and hopefully defendable position. By understanding the why the market exists the provider can position to meet the needs of specific consumer preferences. You don’t need to be the biggest to own a segment but, you have to be unique enough to carve out your dominance and meet your segments consumer’s preferences. For instance, Trader Joes does not compete with Kroger for selection or price but instead attracts and serves a specific customer group.
While the questions are simple the answers can be very complex and challenging. Successfully understanding the questions is essential to the crafting of the winning strategy for your organization. Strategy is about making informed choices and commitments that must concisely define your organization’s vision before the execution can be undertaken to successful achieve the strategy. Yes there is order in the universe.