MGT 4380 Preston, Mason, Blake

Reconstruction Market Boundaries Reconstruction of market boundaries allows companies to break away from the competition. Companies tend to focus on the small picture; be the best in their industry Comes down to looking at data from a new perspective allowing companies to get a better understanding of where a trend may be headed. Six basic approaches to remaking market boundaries known as the Six Paths Framework.

Path 1: Look Across Alternative Industries Companies compete within their industry but must also compete with companies that provide alternatives to their product. Ford’s alternatives include walking/biking, ride shares such as Uber or Lyft, bike or scooter rentals, car sharing services, and public transport Ford’s alternatives are utilized over their product due to cost (both initial buying and upkeep), ecological reasons, lack of space, and commute time

https://www.cargroup.org/wp-content/uploads/2017/02/The-Impact-of-New-Mobility-Services-on-the-Automotive-Industry.pdf pg. 19

https://www. cbinsights https://www.cbinsights.com/research/disrupting-cars-car-sharing-scooters-ebikes/

Path 2: Look Across Strategic Groups Within Industries Strategic groups are founded on the principle of a two-dimensional hierarchy: price and performance Most companies look to improve their position but only worry about it within their strategic groups Ford’s strategic group would be other economy vehicles, but they need to look at luxury brands as well Ford has more luxurious vehicles such as their Platinum Editions and King Ranch series

Path 3: Look Across the Chain of Buyers There is a chain of “buyers” that are a part of the buying decisions for products The purchaser (the one that buys the product), the actual user, and important influencer Purchasers could worry more about cost, users with usability Individual companies often focus on customer segments, i.e. large versus small customers But industries as a whole typically single out a specific buyer group Ford’s chain of buyers are car dealers and customers, the market and Ford focuses on customers

Path 4: Look Across Complementary Product and Service Offerings Untapped value is often hidden in complementary products and services. The key is to define the total solution buyers seek when they choose a product or service. Think about before, during, and after your product is used Identify pain points and determine how to eliminate them through a complementary product or service offering Nabi Phillips Electronics tea kettle

Path 5: Look Across Functional or Emotional Appeal to Buyers Functional Appeal - rational, compete principally on price and function largely on calculations of utility Emotional Appeal - compete largely on feelings The appeal of most products or services is usually the result of ways companies have competed in the past. When companies are willing to challenge to challenge the functional-emotional orientation of their industry, they often find new market space. QB House Cemex

Path 6: Look Across Time How the trend will change the value to the customer and impact the company's business model. Find insight in trends that are observable today Working backwards with future trends that may arise Hybrid F-150 Ex: iTunes and the trading of MP3 files over the web.

Conceiving New Market Space No about predicting or preempting industry trends, but rather reconstructing existing market elements across industry and market boundaries. How can you create new demand to grow an industry. Alignment of the value proposition, profit proposition, & motivating people and partners you work with. Instead of focusing on your rivals within look across alternative industries.