4 Ways to Use a Market Map

Tactical innovators assess their environment through the lens of a Market Map and listen to needs through the voice of the customer, enabling a proactive response to any market change.  I would argue that for every type of business, there are at least two paths to growth: (1) compete more effectively within existing segments or (2) identify new, high value segments where you can be successful.  Here are four ways a Market Map will support either approach to increase revenue.

1. The Market Map Drives Market Sizing and Segmentation

As you know from my most recent post (Market Maps = Better Product Decisions), the Market Map provides a structural view of the markets in which your products and services compete. This handy framework forces a logical assessment of the market informed by the various angles on which you compete.  This, in turn, drives detailed customer segmentation for each of those angles and once compiled, results in a market taxonomy that lends itself perfectly as the structure for bottoms-up market sizing.

1. The Market Map and Product Roadmap Go Hand-in-Hand

With a Market Map it’s easy to see where your competitors are concentrated and what solutions hold their focus.  Through this lens, gaps in your product portfolio will quickly become apparent.  A Market Map can serve as an excellent vehicle to either validate or help you fine-tune your product development roadmap. In other words, the Market Map helps you be confident that you have made the correct decisions about where to invest so that you can compete successfully in an existing segment or expand into new segments.

1. The Market Map is Your Guide to Competitors’ Moves

The Market Map provides a framework to gather and organize data to drive tactical decisions in response to actions taken by your competitors.  But do you truly understand the “why” behind these moves?  For example, if a competitor acquires another company in your space, can you easily determine what they may have gained from the new product set or technology platform?  Was the move motivated by the need to expand into a new part of the value-chain?  The Market Map will shed light on these questions and help you come up with the right response to any move a competitor takes.

1. The Market Map Uncovers Partners or Acquisition Targets

Building new products from scratch may not be the best path to rapid growth in today’s fast-paced business environment.  If acquisition or partnership is the answer, a well-constructed Market Map can narrow your search and highlight the best companies to consider.  In this case, one of our manufacturing clients was interested in a new opportunity segment and realized the best path to market entry was indeed an acquisition. Together, we developed a Market Map that provided an informed, customized acquisition-screening filter to identify companies to investigate further.

Now that we’ve covered just four of the practical applications of the Market Map, stay tuned for future posts that pair this useful framework with the Voice of the Customer.

Market Maps = Better Product Decision

Who doesn’t love a bird’s eye perspective?  Soaring high above the trees allows you to really see the landscape.  But how do you get that same bird’s eye view for your industry?  The answer, of course, is by constructing a market map.

The market map is a cornerstone of the tactical innovator’s tool kit and provides a structural view of the markets in which your products and services compete.  You will profile your competitors, catalog different products and platforms, segment buyers and users and evaluate channels, all in the name of supporting more informed product decisions.  A well-constructed market map helps you identify:

• Product segments that are ripe for expansion
• Emerging technologies that may pose a threat
• Capabilities and competencies that can be applied to other segments
• A broader view of competitive moves
• Existing business models (those that work, as well as those that do not)
• Market size and growth rates for each product segment
• Customer opportunities available now

There are many benefits to the detailed work that goes into the market map, not the least of which is that you now have a factual basis to make decisions about how and where to invest and what strategies to pursue to deliver near-term results.  The market map provides a way to assemble detailed information to support tactical decisions about how to respond to competitor’s moves.  In addition, the market map can serve as the starting point to identify the partner or acquisition targets that will help you enter or leverage a new opportunity segment.  The power of perspective as seen through a market map provides both a wider and more granular view of any industry in which you compete.  It’s a great way to ground your team – or your entire company – with an understanding of where you fit in the market and what your path forward should look like.

Stay tuned for my next tactical innovation post that expands on the powers of the market map and how this powerful tool can work hand-in-hand with your product road map.