Carnegie Mellon Qatar © Robert T. Monroe Course Identifying The Opportunity I: Social, Economic, and Technology Factors and Product Opportunity Gaps Robert Monroe January 25, 2012

Carnegie Mellon Qatar © Robert T. Monroe Course Goals - By The End Of Class Today, You Should: Be able to use the SET factor analysis to identify, evaluate, and understand how broad Social, Economic, and Technology changes can create Product Opportunity Gaps Understand the 10 clues to opportunity proposed by Donald Sull, and be able to recognize when they might be appropriate to apply in your search for new market opportunities Have practiced using these techniques

Carnegie Mellon Qatar © Robert T. Monroe Course Phase 1: Identify The Opportunity Goals: –Identify and evaluate a set of promising Product Opportunity Gap (POG’s) –Choose the most appropriate POG to move forward with Primary results: –Product opportunity statement (hypothesis) –Initial scenario that illustrates the opportunity Methods –Brainstorming, observing, researching Social, Economic, and Technology (SET) factors –Generating POGs based on SET factors –Evaluating and filtering POG ideas generated –Scenario generation, feedback, and refinement Source: Cagan and Vogel, Creating Breakthrough Products, Chapter 5. Launch * Realize Conceptualize UnderstandIdentify

Carnegie Mellon Qatar © Robert T. Monroe Course SET Factors Social Social and cultural trends Government and regulatory changes Major demographic shifts Technical Introduction of new technologies Re-evaluating existing technologies Incremental Refinement and improvement of existing technologies Economic State of the economy Change in focus on where to spend money Levels of disposable income Product Opportunity Gap Source: [CV02] page 9

Carnegie Mellon Qatar © Robert T. Monroe Course SET Factor Exercise Divide into three groups (one S, one E, one T) Work as a group to come up with a list of at least 20 broad forces / changes / trends for your assigned factor (S, E, or T) that affect personal transportation in some way Identify trends that are applicable to: –Qatar –The GCC countries –Across the MENA region –Throughout the world Write them down and be prepared to present them for discussion using the whiteboards around the room.

Carnegie Mellon Qatar © Robert T. Monroe Course SET Factor Discussion Do you see some common themes emerging? Which of these SET factors are mostly the same throughout the GCC nations? Throughout MENA? Globally? Which of these SET factors vary considerably throughout the GCC nations? Throughout MENA? Globally? Which of these should Honda be looking at carefully? –How should you decide the answer to this question?

Carnegie Mellon Qatar © Robert T. Monroe Course Product Opportunity Gaps (POG’s) The next step is to identify Product Opportunity Gaps, or POGs based on your SET factor analysis. A Product Opportunity Gap is the gap between what is currently on the market and the possibility for new, or significantly improved, products that result from emerging trends. –Source: [CV02] page xxxi (glossary)

Carnegie Mellon Qatar © Robert T. Monroe Course Examples of Product Opportunity Gaps A vegetable peeler that is easily used by people suffering from arthritis in their hands A light source that can be pointed and held focused on a specific point in cramped or difficult locations without requiring the use of the person’s hands to hold it A financial instrument that allows young people to move out of their families homes to live on their own before they are married Training tools and materials that help working adults without deep technical expertise develop skills with fast-changing information technologies

Carnegie Mellon Qatar © Robert T. Monroe Course Donald Sull’s ‘10 Clues to Opportunity’ 1.This product should already exist, but it doesn’t Example: Kate Spade handbags 2.This customer experience doesn’t have to be time consuming, arduous, expensive, or annoying, but it is Examples: Netflix, Quicken, Schwab brokeage 3.This resource could be worth something but it is still priced too low Examples: Google’s search data, LinkedIn network Source: [Sull11]

Carnegie Mellon Qatar © Robert T. Monroe Course Donald Sull’s ‘10 Clues to Opportunity’ 4.This discovery must be good for something, but it’s not (yet) clear what that is Example: ArthroCare’s move to orthopedics 5.This product or service should be everywhere, but it isn’t Examples: McDonalds, Starbucks 6.Customers have adopted our produce or service to new uses, but not with our support Examples: Haier clothes / vegetable washing machines 7.Customers shouldn’t want this product, but they do Examples: Honda 50cc motorcycles Source: [Sull11]

Carnegie Mellon Qatar © Robert T. Monroe Course Donald Sull’s ‘10 Clues to Opportunity’ 8.Customers have discovered a product, but not the one that we offer Example: Glucosamine ‘joint juice’ 9.This product or service is thriving elsewhere, but nobody offers it here Example: Storage units in Europe, 10.That product or service shouldn’t make much money, but it does Example: Goldman Sachs discovering investment management fees Source: [Sull11]

Carnegie Mellon Qatar © Robert T. Monroe Course POG Exercise Continue working in the groups you put together for SET exercise Based on the SET factors identified (by all three groups), where should Honda be looking for gaps to fill with innovative new products or services? –Are they doing so currently? –If not, why not? Come up with a list of at least 20 POGs that your group thinks that Honda should be exploring Be prepared to share your top 5 POGs with the class

Carnegie Mellon Qatar © Robert T. Monroe Course So What Conclusions Can We Draw? Take a few minutes to think about what conclusions you can draw from all of the examples and exercises discussed in class today. Write down two conclusions / observations that you are willing to share with the class

Carnegie Mellon Qatar © Robert T. Monroe Course References [CE09] Robert G. Cooper and Scott J. Edgett, Successful Product Innovation, Product Development Institute, Inc., ISBN: [CV02] Jonathan Cagan and Craig M. Vogel, Creating Breakthrough Products, Prentice Hall, 2002, ISBN: [Sull11] Donald Sull, 10 Clues to Opportunity, Booz&Co's strategy+business journal