Mapping the Market Landscape
A Market - is an area or arena in which commercial dealings are conducted.
Market Actors - are any group that operate in the supply, purchasing, use, regulation, promotion, or funding of actives in a marketplace.
Market Landscape - outlines how market actors interact with each other to understand who are the major influences or controllers.
Insight into how the market interacts and who are the major players and how they interact and market their services can shed light on opportunities to enter the market. When considering actors in the market, look to understand their:
Corporate Positioning - how do similar businesses promote their services?
Potential Partner Opportunities - which actors may assist you in development or market access?
Potential Exit Strategies - are they on a path for buyout from larger companies?
Value Propositions - what do the actors emphasise about their brands or products?
Market Share - who are the key market controllers?
Start to build a picture of the market landscape by collating some information on the market actors. This will be used to guide development of a business strategy. If very similar companies already exists, don’t be disheartened, use it as an exercise to learn as much as possible about how they established a foothold in the market. Along the way you may find another angle for your business to outcompete or co-exist.
Competition Positioning Matrix
A Competition Positioning Matrix visualises where competitors sit within a value propostion to the market. This is one way of identifying unmet needs and opportunites for unique value propositions or selling points in the market. The basis of the matrix is to compare two qualities of a product or service across all competitors - these features sometimes require a qualitative rather than quantitative judgement.
Example features for comparison:
Quality/value for money
With retail products, the perceived quality is the unique impression in a customer’s mind surrounding the brand and product which associates a company with something specific, distinct, and desirable versus other products. Where the quality is perceived to be high, people will be more willing to pay for the premium product, but that doesn’t mean there’s no room for competitors.
The Product Value Chain
The Value Chain - outlines the steps and market actors required to realise a product into the hands of a customer. Starting from the raw materials, it aims to map how each actor engages and adds value to the process to produce the end product. Each phase purchases goods from the phase prior then adds value before selling it on at a higher price.
Raw materials → Build basic components → Build complex parts → Assemble parts into product → Distribute product → Retail product → Follow on services
Things to consider:
What are the phases of the product value chain? Where do your competitors sit along these phases? Does that change any competitors into suppliers or customers?
Are there many actors located in your intended phase of the value chain? If so, would it be wise to partner with a larger competitor to add further value to their product?
Are there few or many suppliers involved in the supply of the components needed to build your product? If so, they may be able to demand high prices due to lack of competition.
Do many market actors span multiple steps of the value chain? This may mean it is difficult to enter the supply chain.
Across how much of the value chain do you want to position a company? Wider value chain reach requires more infrastructure and often more upfront capital.
Using the tool and table below, identify the phases in the value chain for a chosen market and how the market actors service different phases.
The Product Value Chain Actors