New Year, New Markets: 5 Steps to Successful Market Entry
As we enter the new year, we are seeing signs of improved economic conditions and a continued demand for a ‘return to growth’. But where to turn for growth remains the question of the day/year.
More often than not, companies are looking to new markets as one of the engines of growth. To seize new market opportunities, product designers must take the following 5 steps in order to gain market insights, conceive a ‘market-taking’ innovative product configuration, and deliver fresh ideas on how to implement that configuration.
1. Map the competitive landscape
Without competition there would be no market to enter. So by definition, there is already an established set of functionality fulfilling a spectrum of client needs. The challenge is to determine the best place to insert your specific capabilities into that spectrum. This requires an understanding of current and emerging solutions in a way that yields insights relative to functional differentiation and sustainability.
Traditional market and technology analyses will identify the obvious competitors and their respective offerings, but can easily miss new entrants and early trends in evolving technology. Both need to be proactively identified. The next generation of competitors may be visible only through obscure patent filings in unexpected categories. And future directions in technology maturation can be hard to discern without guidance on probable patterns of system evolution.
One of the best sources of this information is patent literature, but it remains elusive and difficult to mine. Constrained by limited time and conventional search tools, most engineers and product planners are quickly overwhelmed by the sheer volume of data returned. Innovation software can help cull the relevant information to provide an expansive view of the competitive landscape.
2. Understand required functionality and functionality that is vulnerable
To enter a market that is already populated with a commercially viable product, it is necessary to create a version that improves on existing functions, reduces cost, or eliminates causes of failure. Often, the strategy will involve re-configuring one of your own flagship products to meet the new market requirements. And, in some instances, you will want to design a new hybrid product that combines the best features of both your own and competitor’s products. In each case, to formulate an effective solution strategy you need a thorough understanding of the behavior of the targeted products, their underlying attributes and the interactions of their components. Such analyses are conventionally flawed by ad hoc brainstorming sessions that fail to produce the needed level of understanding due to constraints of time, psychological inertia and lack of readily available subject matter expertise. The resulting unchallenged bias and assumptions constitute major risk-factors and common causes of new market failure.
To mitigate this risk, innovation tools and methods can analyze systems for vulnerable functions and the causes of any undesirable behaviors and identify opportunistic design areas where a change or addition to product capabilities or operation will create compelling market value.
3. Identify top opportunities for replacing current functions
Using proven innovation methods, including TRIZ and Value Engineering, review each function or a product – both current and desired. Then, explore alternate product configurations that resolve constraints, reduce system complexity and/or deliver the desired functionality. Often, these new configurations are ‘unconventional’ and offer breakthrough new concepts. Psychological inertia is broken and innovative thinking is accelerated.
4. Generate and discover concepts
Increasing job specialization compounded by the explosion of digital information make it ever more difficult for engineers to draw upon knowledge from outside their areas of expertise. Idea generation from “outside the box” is further impeded by corporate history and culture. And project-oriented data silos make it difficult to find and reuse expertise acquired in other areas of the company. Meanwhile, local corporate knowledge is vanishing as the graying workforce reaches retirement age. In short, there is a critical need for effective methods to extract ideas from worldwide intellectual resources. By giving your innovation workers access to internal and external knowledge, in the context of the problems they are trying to solve, ideation is accelerated and enhanced.
5. Validate concept novelty and feasibility
Once the most promising idea has been identified, the next step is to validate its feasibility. Is there evidence of previous physical implementations, and what do they tell us about the idea’s utility? Is the idea obsolete in the light of more recent technical developments? Is it novel enough to be patented, and can such a patent be defended? If the idea’s use is already blocked by existing patents then are there alternative work-arounds to such IP constraints? Answering these questions early in the product development process avoids costly missteps and ensures that R&D dollars are used most expeditiously.
We all know the odds of failure when entering a new market - the vast majority of new market entrants are doomed to fail because of systematic errors, induced by biases in thinking and in the way that information is filtered and digested during innovation processes.
By following the 5 aforementioned steps, companies can overcome the obstacles to new market entry and position themselves for success.