In our decades of research, we found that most organizations tend to define their strategic playing field--and limit their opportunity horizon--on the basis of six conventional boundaries: industry, strategic group, buyer group, scope of the product or service offering, nature of the offering's appeal, and time.
Yet these boundaries do not define what must be or should be. They merely define what is. None of them is a law of nature. All of them are the product of people's minds, and, as such, they are open to change. In our research for our new book we broken down the to shift the lens you use in looking at the market universe and to reconstruct market boundaries to open up a new value-cost frontier. We'll zoom in on two of those here.
Path One: Look Across Alternative Industries
This path requires you to identify the problems or needs your offering currently solves, and then to generate a list of other solutions or industries noncustomers use to address the same problems or satisfy the same needs. Remember that the focus is not on alternatives within your industry--why people choose to fly on one airline over another, for example--but on alternative industries that serve the same function or solve the same problem, but that have a different form. What are the decisive sources of value and the detractors of value that make people gravitate to and choose one alternative over another?
Although there may be several alternative industries to the industry you're in or targeting, you should focus on the one(s) that has (have) the largest catchment(s) of demand.
Path Three: Look Across the Chain of Buyers
Most industries converge around a common definition of their target customer. In reality, however, the purchasing decision usually involves, directly or indirectly, a chain of buyers: the users of the product or service; the purchasers who pay for it; and, in some cases, the influencers whose opinions can make the difference in a decision to purchase--or not. So for preteen girls' clothing, the purchaser or payer is typically a parent, the users are the teens themselves, and the key influence group might be pop stars.
In thinking about who's in the chain of buyers, it's also worth considering potential influencers, people who could be brought into the decision-making process but currently aren't.
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