The Basic Elements of Market Attractiveness:


Market Potential:

The company values target markets that have a high degree of inherent growth potential for products or services that would address the segment.  In addition, the company sees their position as one having a high degree of success in obtaining differential advantage and resulting market share gain.

Fit With Core Competencies:

The company values target markets that offer a solid fit with the core competencies of the organization.  This should translate to an ability to garner superior margins as the market should contain a good portion of customers that value the competencies of the organization.

Market Accessibility:

The company values markets that are readily accessible, both geographically and also in terms of underserved clients.  Fewer barriers to entry exist in this segment.

Cost of Market Entry:

The company values markets which do not have significant costs to entry particularly in terms of capital, technology or sales, marketing or channel development expense.

Level of Competitive Concentration:

Target markets where the level of competition is not concentrated in larger, well-entrenched competitors.  In some instances,  a market that contains many small to medium competitors can cause intense price pressure and an undisciplined playing field.

Other factors to consider:

Diversifies revenue

Improves sustainability of the business

Risk of returns in segment

Ease of execution

Time to market

Market size

Product line or service offering fit

Distribution opportunities or leverage

Advantage of quality is present

Advantage of cost is present

Many customers in segment that are good fit in terms of size

Brand recognition/equity

Demand variability

Pricing trends