Assessing Market Attractiveness

Choosing which market to enter is a rocky path fraught with many pitfalls. The first is exaggeration of the size and attractiveness of a market. The second is a tendency to base entry decisions on shareholder or competitor pressure or vision rather than on actual market analysis. Alex Trotman of Ford exemplified this pitfall when he said, ôI canÆt go down in history as the Ford Chairman who missed Chinaö (ôAssessing Market Potential: Estimating Market Size and Timing of Entryö). However, this perspective overlooks the immaturity of the market as well as any other inherent drawbacks it may have. The third pitfall is to rely upon the contacts of senior executives for basing the market selection

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that failed to do this: Webvan spent $830 million to expand into 26 cities at once only to file for bankruptcy after its overly ambitious strategy failed. E*Toys had a market capitalization greater than that of ToysRUs its first day of trading. Greed, irrational exuberance, call it what you may, but common sense was not part of the tune. Good business strategy is based on market knowledge and strategic focus - focus on what you do best and in areas where your competitors are weak (Harrison). Harrison recommends determining what impacts the business from the outside, examining the core business by describing market segments, and then looking internally to determine the companyÆs strengths and weaknesses. She advises looking to the future to see how trends might change and how customer requirements might differ. She posits that ôCareful analysis leads to focus. Focus allows you to purposefully select the best road to travel,ö and this is followed by strategy development centering on what you will do in your core business, what opportunities you will pursue, and what you must accomplish internally to achieve these (Harrison). There are some basic questions that need to be addressed in determining the feasibility of a market, and
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Approximate Word count = 2356
Approximate Pages = 9 (250 words per page)

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