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Identifying Market Opportunities: Applying Innovation
Intelligence for Market Segmentation and Targeting
Competitive Intel...
Do you see the illusion?

2
Intelligence Has Always Been About Removing Illusions To
Improve Decision-Making


Strategic Decisions
 What Business ar...
Intelligence has Focused on Decisively Minimizing Threats &
Maximizing Opportunities




Minimizing Competitive Threats
...
Three Key Business Trends Driving Business Evolution
Human Capital & Enterprise Collaboration
Everyone in the Firm becomes...
Collaborative Insights Team
Key Intelligence Topics (KITs)
Process of Interactive Dialog with Decision-Makers
through KIT Interviews
Consists of 3 Pro...
Why Connect KITs to Methods?
Product Management Process Decisions
Positioning

Marketing
Plan

Sell Against

Business
Mode...
Porter’s Five Forces


Principles of Defensive Warfare









Defensive

The main consideration is the
strength of the leader's positi...
STEEP (Macro Environmental) Analysis


Strategic analysis begins with environmental market scanning and impact
assessment...
Tactical CI Project Example: Cost Analysis
Stage
Criteria
Integration

Level of CI Involvement in M&A
ID
Targets

Evaluate
Analyze

Due
Diligence

ConsumRecommend Ne...
Seven Steps to Effective Competitive Benchmarking
1.

2.

3.

4.

5.

6.

7.

Determine functional areas within your opera...
Growth Vector Analysis


Growth Vector Analysis (GVA) reviews the different product alternatives available to
the firm in...
Competing head-to-head can be cutthroat 
especially when markets are flat or growing 
slowly.
Managers caught in this kind...
Look Beyond the Current Business
Knowing Why They Buy
“Companies may know a
good deal about their
customers. They know
not...
10 Types of Innovation
Innovation
Category
Finance

Innovation
Type
Business model

Description of type
How you make money...
10 Examples
Success Breeds Complacency
“It is a classic conundrum for business titans: How much
money and attention should be focused ...
Customers “Hire” Products to
Do “Jobs” for Them

Concentrate Less on
What Customers “Want” and
More on What Customers “Nee...
Disruptive Technology
Disruptive Innovation Theory
Performance

Sustaining Innovations
Better Products Brought to
Established Markets

Differenc...
Customer Demand & Signals of Change
1.

2.

3.

4.

Non-Market Contexts: External Forces (Government, Economics,
etc.) Inc...
Value Chain Evolution Theory
Disruptive Business Models: Vertically Integrating VC to Improve
What’s “Not Good Enough” in ...
Signals
of
Change

Likely Outcome of

Strategic Choices

Competitive

Influencing

Battles

Success

Performance-Driven Or...
RECON
Intelligence Should Concentrate on
Five Domains of Business Problem Solving


RISK



EFFICIENCY



CUSTOMERS


...
What’s Next?

Leadership to Act is
Based on Confidence
Intelligence Combats the Paralysis that
Accompanies Uncertainty
Fee...
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Identifying Market Opportunities: Applying Innovation Intelligence for Market Segementation and Targeting

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Opening presentation to the October 17th competitive intelligence track at the Altamont Group's Business Forecasting 2013 meeting in San Francisco.

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Identifying Market Opportunities: Applying Innovation Intelligence for Market Segementation and Targeting

  1. 1. Identifying Market Opportunities: Applying Innovation Intelligence for Market Segmentation and Targeting Competitive Intelligence 2013 San Francisco California USA Thursday 17 October 2013 Arik Johnson Founder & Chairman, Aurora WDC Managing Director, Center for Organizational Reconnaissance
  2. 2. Do you see the illusion? 2
  3. 3. Intelligence Has Always Been About Removing Illusions To Improve Decision-Making  Strategic Decisions  What Business are We in and Where are New Opportunities for Growth?  Operational Decisions  How do we structure and align those business units to most effectively compete for and win Market Share?  Tactical Decisions  Which customers are available to us and how can we convince them to select us over any and all functional equivalents?
  4. 4. Intelligence has Focused on Decisively Minimizing Threats & Maximizing Opportunities   Minimizing Competitive Threats  Understanding Threats to Current Business Status Quo: Competitors, Legislation, Technology Shifts, Obsolescence, Substitutes, Customers Backwards Integrating, Vendors Forwards Integrating, etc. Maximizing Market Opportunities  Identifying New Sales, Revenue and Profit Centers  Develop New, Innovative Products & Services  Benchmarking Cost Reduction and Efficiencies from Direct Rivals & Best-of-Breed non-competitors
  5. 5. Three Key Business Trends Driving Business Evolution Human Capital & Enterprise Collaboration Everyone in the Firm becomes a Virtual Member of the Intelligence Apparatus, Better Engagement by Rank & File, Shared Visibility of Issues & Actions Corporate Governance & Risk Oversight Board-level Priority Ensuring Reliability of Management’s Earnings Forecast & Assessing Risks to Status Quo Business Model Disruption & Value Innovation Predicting the Outcome of Competitive Battles by Anticipating Changes in Product/Strategy Dynamics
  6. 6. Collaborative Insights Team
  7. 7. Key Intelligence Topics (KITs) Process of Interactive Dialog with Decision-Makers through KIT Interviews Consists of 3 Protocols w/Subtle Differences:  Strategic Decisions/Issues  Key Marketplace Players  Early-Warning Topics
  8. 8. Why Connect KITs to Methods? Product Management Process Decisions Positioning Marketing Plan Sell Against Business Model & Case Sales Process Awareness Bldg. Plan Presentations & Demos Capabilities & Resources Distinctive Competence Pricing Market Requirements Customer Acquisition Sales Automation Event Support Market Problems Strategic Product Performance Operational Metrics Buy, Build or Partner Product Roadmap Customer Retention Sales Training Answer Desk Market Analysis Quantitative Analysis Product Strategy Product Planning Program Strategy Sales Readiness Channel Support Technology Assessment Market Sizing Innovation User Personas Buyer Personas Collateral & Sales Tools Channel Training Competitive Analysis Win/Loss Analysis Life Cycle Strategy Product Contract Market Messaging White Papers “Special” Calls Channels Analysis Market Segments Thought Leaders Release Milestones Launch Plan Competitive Battle Cards Lead Generation Win-Loss Supplier Analysis Tactical Market Research
  9. 9. Porter’s Five Forces
  10. 10.  Principles of Defensive Warfare       Defensive The main consideration is the strength of the leader's position. Find a weakness in the leader's strength and attack at that point. Launch the attack on as narrow a front as possible. Offensive Market Leaders • • Attacking themselves with new ideas Blocking competitive moves No 2 or No 3 • • Avoiding leader’s strengths Attacking leader’s weaknesses Principles of Flanking Warfare     Marketing Warfare Principles of Offensive Warfare   Only the market leader should consider playing defense. The best defensive strategy is the courage to attack yourself. Strong competitive moves should always be blocked. A good flanking move must be made into an uncontested area. Tactical surprise ought to be an important element of the plan. The pursuit is just as critical as the attack itself. Principles of Guerrilla Warfare    Find a segment of the market small enough to defend. No matter how successful you become, never act like the leader. Be prepared to bug out at a moment's notice. -- Jack Trout Flanking Guerrilla New Players • • Moving into uncontested area Element of surprise Small Players • • Finding market small enough to defend Prepared to bug out at moment’s notice
  11. 11. STEEP (Macro Environmental) Analysis  Strategic analysis begins with environmental market scanning and impact assessment. STEEP covers this broadest “high-altitude” point of view of the market environment, covering five aspects impacting competitiveness: 1. Social: values, lifestyles, ethical norms, literacy, cultural attitudes, customs, beliefs, education 2. Technological: digital communications, biotech, chemicals, energy and medicine 3. Economic: balance of payments, inflation, fiscal/monetary policy, spending, income growth 4. Ecological: climate change, resource depletion, sustainable development, recycling, pollution 5. Political: regulation, legislation, lobbying, political party platforms, local, regional and national
  12. 12. Tactical CI Project Example: Cost Analysis
  13. 13. Stage Criteria Integration Level of CI Involvement in M&A ID Targets Evaluate Analyze Due Diligence ConsumRecommend Negotiation mation Intelligence Research Business Units Finance Technical Assessment Legal Executives M&A Specialists Transition Team Logistics HR High Level of CI Involvement Low
  14. 14. Seven Steps to Effective Competitive Benchmarking 1. 2. 3. 4. 5. 6. 7. Determine functional areas within your operation to be benchmarked. This is likely to be those areas that will benefit most from the benchmarking process, based upon the cost, importance and potential of changes following the study. Identify the key factors and variables with which to measure those functions. Two general forms – wherewithal/resources and goals/strategy. Select the best-in-class companies for each area to be benchmarked -- those companies that perform each function at the lowest cost, with the highest degree of customer satisfaction, etc. The companies you select will be those that do whatever you’re measuring better than you do and/or are ones you wish to emulate or copy. Measure performance of the comparison companies for each benchmark being considered. Measure your own performance for each variable and begin comparing the results in an "apples-to-apples" format to determine the gap between your firm and the best-in-class examples. Specify programs and actions to meet and surpass the competition based on a plan developed to enhance those areas that show potential for compliment. Implement your improvement program by setting specific improvement targets and deadlines, and by developing a monitoring process to review and update the analysis over time. This will also form the basis for ongoing monitoring, revision and recalibration of measurements in future benchmarking studies.
  15. 15. Growth Vector Analysis  Growth Vector Analysis (GVA) reviews the different product alternatives available to the firm in relation to its market options, not already being pursued by competitors. Four complimentary characteristics are used for defining common threads of strategy:  Product-Market Scope specifies particular industries to which a firm confines its position.  Growth Vector indicates the direction a firm is moving relative to current product-market posture (market penetration, market development, product development and diversification).  Competitive Advantage defined as particular properties of individual product markets conveying a strong market position.  Synergy is the combined effect on the firm’s resources that is greater than the sum of its parts.   Present Products Improved Products New Products Existing Market Market Penetration Product Extension Product Development Expanded  Market Market Extension Market Segmentation / Product  Differentiation Product Development / Market  Extension New Market Market Development Product/Service Extension &  Market Development Diversification
  16. 16. Competing head-to-head can be cutthroat  especially when markets are flat or growing  slowly. Managers caught in this kind of competition almost universally say they dislike it and wish they could find a better alternative. They often know instinctively that innovation is the only way they can break free from the pack. But they simply don’t know where to begin. Chan Kim and Renee Mauborgne
  17. 17. Look Beyond the Current Business Knowing Why They Buy “Companies may know a good deal about their customers. They know nothing, as a rule, about their non-customers -- the people who should be their customers but buy from someone else. Why do they do that? And yet it is the noncustomer where important changes always start first.”
  18. 18. 10 Types of Innovation Innovation Category Finance Innovation Type Business model Description of type How you make money Networks and Alliances How you create and add value to your offerings Product performance How you design your core offerings How you link and/or provide a platform for multiple products. Service Delivery How you support the company's core processes and workers Product system Offerings Enabling process Core processes Process How you join forces with other companies for mutual benefit How you provide value to customers and consumers beyond and around your products Channel How you get your offerings to market Brand How you communicate your offerings Customer experience How your customers feel when they interact with your company and its offerings
  19. 19. 10 Examples
  20. 20. Success Breeds Complacency “It is a classic conundrum for business titans: How much money and attention should be focused on a new, but growing, operation that is far less profitable than the core business?” - Prof. Clayton Christensen, The Innovator's Dilemma
  21. 21. Customers “Hire” Products to Do “Jobs” for Them Concentrate Less on What Customers “Want” and More on What Customers “Need”
  22. 22. Disruptive Technology
  23. 23. Disruptive Innovation Theory Performance Sustaining Innovations Better Products Brought to Established Markets Difference Performance Measure Low-End Disruptions Target Overshot Customers with a Lower Cost Business Model New-Market Disruption Compete Against Nonconsumption Nonconsumers or Nonconsuming Contexts Time
  24. 24. Customer Demand & Signals of Change 1. 2. 3. 4. Non-Market Contexts: External Forces (Government, Economics, etc.) Increasing or Decreasing Barriers to Innovation Undershot Consumers: Opportunities for Up-Market Sustaining Innovations Overshot Consumers: Opportunities for Low-End Disruption, Shifting Profits by Specialist Displacements (Modularity) and the Emergence of Rules Non-Consumers: Opportunities for New Market Disruptive Growth Established Companies almost always Lose to Disruptive Innovators
  25. 25. Value Chain Evolution Theory Disruptive Business Models: Vertically Integrating VC to Improve What’s “Not Good Enough” in the company’s products and services judged by customers. • Performance Defining Subsystems: Companies must control all those activities and combinations of activities in the value chain that drive the product performance characteristics that matter most to customers. • Specialists will seek to control performance drivers based on asymmetric differences in Motivation and Skills around a modular interface in the VC. (Sword & Shield) •
  26. 26. Signals of Change Likely Outcome of Strategic Choices Competitive Influencing Battles Success Performance-Driven Organizational Reconnaissance Engages the Workforce in Collaborative Intelligence and Analytics to Anticipate and Act on Industry Change to Ensure Good Governance for Stakeholders
  27. 27. RECON Intelligence Should Concentrate on Five Domains of Business Problem Solving  RISK  EFFICIENCY  CUSTOMERS  OUTLOOK  NOVELTY
  28. 28. What’s Next? Leadership to Act is Based on Confidence Intelligence Combats the Paralysis that Accompanies Uncertainty Feel free to ask for help:       Email: Arik.Johnson@AuroraWDC.com Phone: +1 (608) 630-4242 Twitter: @ArikJohnson LinkedIn: http://linkedin.com/in/ArikJohnson Skype: ArikJohnson Web: http://IntelCollab.com & http://AuroraWDC.com

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