How to thrive in a crowded market
A saturated market means eager buyers – it also means strong demand. That is why so many competitors have been able to coexist for so many years. However, when a business is trying to emerge and thrive in an already crowded market, the seemingly excessive number of players can be misleading. This article focuses on some ways to spot and exploit the opportunities to succeed in such areas.
Spotting unmet needs and innovating around those
Entrepreneurs must be like bloodhounds. They must learn how to sniff out the unmet needs of the customers they wish to serve. To win new customers, ask the golden question: ‘What is the unmet want and how can we meet this unmet want before anyone else does?’”
In a bursting market, there are clear signals that companies can pick up on in order to thrive. Companies should keep a tab on the pulse of the industry to spot any opportunities to break into the market. Further, innovation and creativity goes a long way when developing a product or service.
One way to break into a crowded market is to find if there is any major unsolved problem, cultural and/or technological, in the desired domain and take steps to innovate in that direction. Xiaomi, for example, used a novel business model to penetrate highly competitive smartphone markets after spotting a big customer segment that wanted hi-spec, low-cost smartphones in developing countries. Not only did Xiaomi enter the market, it went on to become the fourth largest smartphone seller worldwide.
Finding less-researched, high-impact segments to break into an industry
Finding niche, under-researched areas with a high growth potential is another way to succeed in a crammed market. The combination of patent white-space analysis and market research can help to visualise market dynamics and technological gaps.
White-space analysis helps companies to find technological gaps by identifying profitable technology areas that are untouched by competitors. Market research helps to highlight risk, understand customers’ needs and sell them the right product or service. Consolidating both helps to see the market clearly, justify investment and make strategic recommendations.
In order to make this combined analysis work, a company must first find answers to the following questions:
- Is the opportunity large enough to make the investment profitable?
- Is the selected section the best one to focus on?
- What decisions are competitors making?
- What must the company do to succeed?
Finding the right country or region
China-based Transition Holdings is one of the top players in Africa’s smartphone market. Surprisingly, it does not operate in China but has developed all its smartphones and software according to the needs of Africa and has built a strong market there. It chose its most suitable region in which to operate and be truly innovative.
Now that Transition Holdings has sufficient funds, it is planning to enter India and China, where the market is already crowded. A few strategies that come out of this are:
- focusing on a region that is not your base region (ie, China); and
- building a base in a quieter market and then moving towards a busy one.
Choosing the right partner for R&D collaboration
The market moves so fast – it is tough for a firm to stay competitive on its own. Hence, tapping into complementary knowledge from outside firms should be a major focus when planning to enter an opportunity-ripe, but packed, domain.
By following a collaborative approach, a company can go beyond its current capabilities and innovate at a low cost. However, not all companies will be suitable for partnership. One possible way to find the right collaborative partner is to analyse competitors’ patent filings.
Consider a company that wants to break into smart home domain. It is trying to find a solution to the data privacy issue. Say it found that blockchain is one of the solutions to this problem – it would be more inclined towards telecoms companies that are already carrying out research to solve privacy issues using blockchain.
In this case, it should try and partner with companies like British Telecom or Huawei that have patents filed in the solutions for safety and security. It can also find universities or start-ups in the same way.
Navigating the talent hotspots
Top inventors at companies working in the domain that a company wishes to enter and top researchers at universities are some of the areas to look for talent scouting. Inventor-based patent analytics could be one way to find the top researchers in the desired sector.
As an example, Amazon has been trying to break into the pharmaceutical domain for more than two years. Hiring the right talent was one of its strategies to break into this multibillion-dollar industry.
Amazon took on cream-of-the-crop such as renowned cardiologist Maulik Majmudar, Dr Martin Levine, a top Seattle doctor, and former Food and Drug Administration chief health information officer Taha Kass-Hout to break into this market.
No matter how crammed a market is, time and again, we have witnessed an underdog breaking-in and setting a strong foothold in the market. Xiaomi joining the top ranks along with the behemoths like Samsung and Apple, and Under Armour going from zero market shares to the fifth-largest player in a market where Adidas and Nike were dominant players, is a clear indication that an oversaturated market can be penetrated.
A good investigation approach that aims to find gaps, weaknesses and unmet needs in the market helps to identify and understand the trends and changes on which a company should focus. Also, a listening ear is paramount to understand what customers are saying. Some of the most successful enterprises are the ones that have solved a unique problem for their customers.
Once an opportunity is spotted, giving the product/service the touch of creativity and innovation to set it apart from others is all you need. Without differentiation, it is impossible to survive in a crowded market.
This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight
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