Dr. Dawne Martin MKTG 241 January 29, 2013 OPPORTUNITY IDENTIFICATION

LEARNING OBJECTIVES Review the Opportunity Identification paper To investigate trends in the external environment that offer new business opportunities Review “discovery skills” identified in the HBR article “The Innovator’s DNA”, December 2009 Identify trends in the environment Determine how the trends justify the business opportunities For next time: Marketing for Entrepreneurs, Chapters 3

ONE-PAGE OPPORTUNITY IDENTIFICATION Due: Thursday, January 31, 2013 Trends: Identify, document and describe trends relevant to the opportunity Opportunity: Describe the opportunity, including industry, business model and target market Justification: Expand on trends and how the trends suggest this opportunity

THE INNOVATOR’S DNA DYER, GREGERSEN & CHRISTENSEN, HARVARD BUSINESS REVIEW, DEC Senior executives in most innovative companies take responsibility for creative work – spend 50% of time in “discovery skills” Discovery skills Associating Questioning Ask “Why?”, “Why not?”, “What if?” Imagine opposites Embrace constraints

CHARACTERISTICS OF A GOOD OPPORTUNITY Creates significant value for customers– solving an important problem, fulfilling a need – willing to pay premium price Offers significant profit potential – meets risk/reward expectations Good fit between entrepreneur’s capabilities and expertise Offers sustainability over time Can obtain financing

INNOVATOR’S DNA (CONTINUED) Discovery Skills (continued) Observing: potential customers, suppliers, competitors Experimenting Intellectual exploration Physical tinkering Engaging new environments Networking : with diverse individuals

GLOBAL TRENDS Economic Trends Consumer Trends Financial Market Trends Technology Trends Social Media Trends Mobile Trends Demographic Trends Design & Fashion Trends Health & Wellness Trends Travel Trends

ERNEST & YOUNG GLOBAL TRENDS business-world

FAITH POPCORN:EN-GEN 2011: FAITH POPCORN’S BRAINRESERVE PREDICTIONS EN-GEN: End of traditional gender roles – neither males nor female, just human Trends Women hold 51% of managerial & professional jobs 4 of 10 mothers are primary breadwinners, bring in close to ½ household income Single, childless women under 30 earn 8% more than male peers Number of women with 6 figure salaries increased by 14% in last two years Women’s health following men – increase in chance of heart attacks, heart surgery

GENDER TURNING POINTS: OPPORTUNITIES Merger of Artistry & Technology – simple, elegant design (Nespresso) Beyond the Bento Box – men & women experiment with interests and ideas normally associated with other gender Electric Shock: Electric vehicles combine women’s concerns for environment with men’s love of technology Recession Lift: Economy has made it difficult for men 45+ to compete – boom in male plastic surgery Veganomics: More sensitivity to sources of food and consumer products leads to growth in vegan values in all areas (bamboo floors, MooShoes) Robot Frenzy: Breakthroughs in robot technologies in medicine, manufacturing, prosthetics, military and more

BUSINESS MODEL BUILDING BLOCKS Customer Segments Segments Needs require and justify a distinct offer Reached through different distribution channels Require different types of relationships Have substantially different profitability Are willing to pay for different aspects of the offer Segmentation approaches Mass market – don’t distinguish between customer segments Niche market – specific, specialized customer segments Segmented – serve multiple segments with different needs Diversified – serves two unrelated customer segments Multi-sided Platform (or markets) – two or more interdependent customer segments (Ebay)

BUSINESS MODEL BUILDING BLOCKS Value Proposition: Creates value for a customer segment through a distinct mix of elements catering to segments needs Newness – meets a new set of needs – cellphones Performance – improving product or service performance Customizations – tailoring product and services to specific customer needs – mass customization and co-creation Get the Job Done– Rolls Royce manufacturers and maintains aircraft engines Design Brand/status Price Cost Reduction Risk Reduction Accessibility Convenience/Usability

Channels Functions: Building awareness among customers Helping customers evaluate value proposition/alternatives Allowing customers to purchase specific products or services Delivering value proposition to customer Provide post-purchase customer support Channels Types Direct – sales force, web sites, own stores Indirect – Partners stores, wholesalers Customer Relationships Personal assistance Dedicated personal dinner Self-service Automated service Communities Co-creation BUSINESS MODEL BUILDING BLOCKS

Revenue Streams Asset sales Usage fees Subscription Lending/renting/leasing Licensing Brokerage fees Advertising Key Resources Physical Intellectual Human Financial Key Activities Production Problem solving Platform/network Business Model Building Blocks

Key Partnerships Optimization and economies of scale Reduction of risk and uncertainty Application of particular resources and activities Cost Structure Cost –driven Value-driven Cost structure characteristics Fixed costs Variable costs Economies of scale Economies of scope BUSINESS MODEL BUILDING BLOCKS

IN YOUR GROUPS Work on your Opportunity Analysis Identify your customer base and your unique value