This document discusses moving from a production-oriented approach to creating new market opportunities. It provides three approaches: 1) Moving from focusing on product value to customer value creation through understanding customer needs. 2) Shaping markets by influencing market practices like transactions, competition, and norms instead of just participating. 3) Adopting an experimental and effectual approach to business planning rather than traditional predictive planning. These approaches can help companies discover and create new markets for growth.

1. Tuotantolähtöisyydestä uusien
markkinamahdollisuuksien rakentamiseen
Sitra
Osallistava kasvu -työpaja
24.11.2011
KTT Suvi Nenonen
Partner
Vectia

2. The ineffective quest for market share
Case: 200 largest US corporations
Average 5.5% Market growth
annual
top line
growth
8.6%
3.0% M&A activity
0.1% Market share increases
Overall Sources of
growth rate growth
Source: Baghai, Smit & Vigurie, 2007
case • case • case • case • case • case • case • case • case • case • case • case • case • case • case • case •
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3. Three
lighthouses for
“finding”
growing
markets

4. From product to
customer value
creation

5. Radical innovation destroys existing products and creates new
customer value – against customer research and expert advice
case • case • case • case • case • case • case • case • case • case • case • case • case • case • case • case •
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6. Radical innovation destroys existing products and creates new
customer value – against customer research and expert advice
case • case • case • case • case • case • case • case • case • case • case • case • case • case • case • case •
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7. Radical innovation destroys existing products and creates new
customer value – against customer research and expert advice
case • case • case • case • case • case • case • case • case • case • case • case • case • case • case • case •
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8. Radical innovation destroys existing products and creates new
customer value – against customer research and expert advice
case • case • case • case • case • case • case • case • case • case • case • case • case • case • case • case •
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9. From sharing markets
to shaping markets

10. Shaping markets by affecting market practices
Exchange Normalizing Representational
practices practices practices
Actors: focal firm, customers, Actors: authorities, Actors: market
suppliers, partners, agents associations research agencies,
press, universities,
associations
Practices related to Practices related Practices related
conducting business to creating norms to creating statistics
& media coverage
Price formation Network Technology & Associations
Transactions
mechanisms readiness standards & media
Singularization:
Customer Market
sales item Competition Norms & rules
readiness research
definition
Vectia method • Vectia method • Vectia method • Vectia method • Vectia method • Vectia method • Vectia method
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11. From planning to
experimentation

12. Planning or action?
Successful entrepreneurs go for the effectual process
Predictive, traditional business planning
Conduct
competitive
Identify and analysis Acquire
opportunity resources and Adapt to the
for a new Develop a stakeholders environment
product / firm business plan needed to as it changes
/ market implement the over time
Conduct plan
market
research
Effectual business planning
More resources New
means
Assess
means: What can I Interact with Obtain partner
Who am I? do? people I know commitments
What I know? and meet
Who I know?
New
Less contraints goals
New firms, products, and markets
12 Source: Read et al. (2009)