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If you are considering entering a new target market, with an

existing or new product or service, it makes sense to first

systematically analyze the market in question via some

fundamental market evaluation criteria. It is not only

rational but most cost effective to determine if a new market

pursuit makes sense for your company before any significant

resources are further applied to the effort.

A “pass or fail” test of your targeted market is recommended

with your company’s core management team collective

involvement. Discussing the attributes of a given market and

further analyzing the business logic behind your intention to

participate in a new market will generate some very

enlightening conversation among your key decision makers.

Having various management functions present for the discussion

generates the most effective, broad base perspective,

appropriate “next step” for this strategic decision.

Besides further justifying or reducing your intentions to enter

a new market, weighing all the same attributes of any one

targeted market candidate against another target markets of

consideration can lead to a pivotal decision for the future

direction of your company. The opportunity cost of choosing

the “wrong” or “least rewarding” target market, given limited

corporate human and financial resources, can make or break

your collective ability to meet or exceed your company’s short

and long term growth objectives. Again, effectively utilizing

a simple, systematic evaluation checklist made up of some of

the market attributes listed below can be most time efficient

and cost effective.

Our list of market attributes cover various business sectors

and should not be considered a complete listing. To make this

evaluation exercise most productive for your management team,

first evaluate this list for relevancy and then add whatever

number of additional categories or attributes that correlate

to your company’s collective business priorities, resources,

risk/ reward tolerance levels and growth objectives.

MARKET PRODUCT / SERVICE LINE ATTRIBUTES:

* Market has a viable need for product application advancements or transitions

* Market is not dominated by short product life cycles

* Market allows for effective competitive advantage without extraordinary design, engineering or research cost

* Market allows for effective competitive advantage without extraordinary testing, certification or performance compliance issues

* Market offers opportunities for relatively high product / service gross profit margins

* Market does not require a large number of products or services to effectively compete

* Market share is gained more from product value or by high value service

* Market product/ service applications have worldwide demand

* Market product/ services are compatible with existing company core competencies

* Market product/ service offerings can be legally protected

* Market generally does not present extraordinary financial liability exposure

* Market demand is not extraordinarily seasonal or difficult to forecast

MARKET CUSTOMER ATTRIBUTES:

* Market offers a diversified mix of key customer product / service users

* Market offers financially stable customers

* Market offers relatively consistent purchase loyalty

* Market has existing product/ service users who will purchase other related offerings

* Market is supported long term by fundamental economic and demographic growth

MARKET SERVICE ATTRIBUTES:

* Market does not require an inordinate amount of after-the-sale service

* Market can be supported by a centralized customer service location

* Market does not require extensive service certification from 3rd party entities

* Market does not proliferate extraordinary product/ service warranties

* Market service requirements are not hazardous to company personnel

* Market does not require extraordinary distribution requirements

* Market share can be augmented with effective e commerce tactics

MARKET COMPETITION ATTRIBUTES:

* Market is dominated by well known competitors and suppliers

* Market is not dominated by one company (> 80% market share)

* Market has reputable competition, a quality image and history

* Market offers competitors that would be future acquirers or acquisition candidates

* Market is not targeted for international penetration via pricing tactics

* Market requires a reasonable level of financial and technical resource barriers to entry

MARKET GROWTH:

* Market has a proven history of growth

* Market has a high probability of long term future growth

* Market offers traceable causes of growth

* Market has worldwide growth

* Market has regional growth niches

* Market growth cannot be negatively affected by existing or pending legislation

Justification of entry into any new market or niche thereof

involves effectively identifying all viable competitors,

relevant market attributes, key market participants and their

market shares. Being able to strategically apply this

qualified information with respect to your known company

financial, technical and human resources can result in

extraordinary business growth opportunities.

If you want to further quantify this analysis you can

numerically weight each market attribute with your own

specific market attribute priorities and then give numerical

“grades” to any or all new market entry candidates to

calculate a weighted value for each new market opportunity.

Evaluating new business opportunities should be a well thought

out, straightforward, iterative process. Beginning the

evaluation process with a simple tool to justify further

analysis is a prudent procedure. The more effective your

analysis, the greater the probability your strategic decisions

will maximize return on investment.

About the Author:
Mark Smock is President of http://www.business-buyer-directory.com, the FIRST international business buyer directory of its kind. Business Buyer Directory provides a non-traditional means for proactive business buyers to locate businesses for sale worldwide that meet their exact registered purchase criteria.