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Market opportunity assessment

The 5Cs Market Opportunity Assessment: There are five major elements in the assessment of a market opportunity for a new business venture and/or new product.


The assessment involves researching, analysing and identifying the key factors of information (both available information -called secondary market research and new, created informationcalled primary market research) upon which to make the strategic and tactical market validation decisions. The five major elements , also known as the ‘five c’s’ are:

(1) the core competency of the company (2) the market context within which it will operate and be influenced by, (3) the market requirements of the customers, (4) the capabilities and requirements of collaborators, and (5) the strengths and weaknesses of the competition.

  1. Company Core competency of the venture is central to identifying the succession of solutions (not just the current product) to be developed for the most attractive markets in the years ahead. For example, Honda’s core competency is the ‘combustion engine’ , which it deploys into solutions for a number of target markets such as the automobile market, the lawnmower market, the motorbike market and most recently the aviation jet market.
  2. Market context The generic market need served by the venture, the specific product type market categories within which the venture will compete directly against other brands in that category and the other related product type market categories, which are a source of indirect competition. The structure of this generic and specific product type markets can be influenced and impacted by trends in the macro-economic environment.
  3. Customers Market requirements of customers is about the customer as a person or a buying unit and what their attitudes and perceptions are towards the category of need , existing solutions and suppliers and how they articulate idealised solutions and suppliers and buying process.
  4. Channel and collaborator Capabilities and requirements determine how much work the entrepreneur must do in selling to the endorser versus how much can be farmed out to distribution specialists. This is especially important if the new venture does not have the resources to contact the final customer directly. In addition, existing channels may be able to readily accommodate the new product with very little increase in selling effort. The entrepreneur must know the distribution options and be able to identify the factors necessary to attract key distributors.
  5. Competitors Competitive strengths and weaknesses must also be considered when selecting market targets. No company wants to enter market segments that are saturated with competitors. More often than not, the success of a new venture depends on finding market segments where the company can develop a competitive edge. Further, management will need guidelines on how to compete with key competitors in each target segment. The strengths of competitors must be matched or avoided, and the weaknesses must be scrutinized for possible ways to create differential advantages.

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