Perhaps the most crucial step in your entire corporate strategy is determining the right markets to compete. As a resource, follow along starting on page 60 of SBI’s annual workbook.
Why is important? Being in fast-growing markets is the largest driver of revenue growth. Least important is market share growth. Yet, many executive teams tend to focus most of their attention on gaining share in their existing markets. While it is necessary to maintain, and sometimes increase, market share, changing your company’s exposure to growing and shrinking market segments should be a major focus.
What does it mean to define your markets? Define which markets you will, and will not, compete in.
What problem does the Markets phase solve?
There are too many markets to choose from, and too little money to spend on them. To make sure you’re getting the most out of your budget, choose the markets that are most important to your company objectives.
If you don’t define the markets in which you will compete, you leave it up to each individual employee to make that decision. That just leads to conflict and competing priorities. By identifying key markets beforehand, you give employees the tools they need to beat the estimates next year.
How do we solve that problem?
In order to identify the best markets for your company’s goals, your Corporate team must be able to answer these 10 questions:
- How big is the overall addressable market?
- What is the growth rate of this addressable market?
- What % of this market is penetrated today?
- What is our “sweet spot” within this addressable market?
- What is our growth rate as compared to the growth rate of the addressable market?
- Who are our competitors in this addressable market?
- What is the current growth rate of each competitor in this addressable market?
- What is our market share as compared to our competitors for each market segment?
- What are the current and projected demand drivers of this addressable market?
- What are the traditional routes to market in this addressable market?
To access the complete list of twenty questions to identify your markets, download the workbook. Skip to the Markets phase of the corporate strategy starting on page 60. With your Corporate Strategy in place, your team will have the tools they need beat the estimates in the coming year.
To apply these questions to your organization, come see me at The Studio. Selecting the right markets is not easy to do, and I can guide you through the process. The Studio, SBI’s multimillion dollar, one-of-a-kind, state-of-the-art executive briefing center. Sessions at The Studio are experiential and are designed around the principles of interactive exercises, hands-on innovation, and peer-to-peer collaboration. The Studio is a safe haven for learning and after just a few days clients leave with confidence and clarity on what they need to do to grow revenue and how to do it.