Capturing New Markets
How Smart Companies Create Opportunities Others Don't
Editorial Review
A new market might cannibalize some of the old, but it also expands overall consumption—cars significantly hurt the makers of buggy whips, but they greatly expanded the use of transportation. If fighting competitors for share is a zero-sum game, new markets are about positive sums that create economic growth. New markets are particularly relevant in today’s economy. As firms emerge from the “great recession,” they are seeking new ways to grow. The downturn has left little appetite to take on the high costs of competing head-on against entrenched competitors, and so it is compelling to pioneer businesses with low costs of entry but high potential rewards. Aside from the short-term economic climate, several long-term trends are also converging to force new markets onto companies’ strategic agendas. This book’s focus is on markets that have not existed previously. It is concerned with tapping talent demand to create new sources of consumption, much as the cell phone did.
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For many firms, emerging markets are new territory. If firms do not play offense in emerging markets now, they soon may be playing defense against globalization’s winners.
Thanks to innovations such as the Internet, e-mail, social networks and cheap telecommunications, information flows far more rapidly today than ever before.
The easy availability of information enables markets to form quickly. Yet information also can lead to transparency of competitor’s pricing, easy comparison shopping, and commoditization.
As well as enhancing information flows, the Internet has created virtual channels that link pioneers with target customers, bypassing the middlemen who often neglect new markets because of their focus on short-term sales quotas.
How can you evaluate something that does not exist? Borrowing techniques used in established markets is often folly.
Your strategy should depend on your circumstances. Top executives have the authority to set a strategy and portfolio plan for the corporation. They should be wary of dictating a new-market concept in too much detail because it is tough for the staff down at the coalface to rapidly adjust approaches on a dictate that comes from the pinnacle of a company.
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