Opportunity Identification Chapter 3
What is an Opportunity? • Idea for a new product • Product description in embryonic form • Newly sensed need • Newly discovered technology • Rough match between a need and a possible solution
Types of Opportunities • Familiarity with the solution likely to be employed. • Familiarity with the need the solution addresses.
Opportunity Horizons • Horizon 1: Improvements, extensions, variants, and cost reductions of existing products for existing markets • Horizon 2: opportunities push out into less know territory in one or both dimensions of the market or technology • Horizon 3: attempts to exploit opportunities that are some way new to the world.
Effective Opportunity Tournaments • Generate a large number of opportunities • Seek high quality of the opportunities generated • Create high variance in the quality of opportunities
Opportunity Identification Process • Step 1 – Establish a charter • Step 2 – Generate and sense many opportunities • Step 3 – Screen opportunities • Step 4 – Develop promising opportunities • Step 5 – Select exceptional opportunities • Step 6 – Reflect on the results and process
Step 1 – Establish a charter • FroliCat: • Create a physical product in the cat toy market that we can launch to the market within about a year through our existing retail sales channel • Dry erase marker with ink-level indicator • Create a dry erase marker similar to existing markers that wool have an integrated ink-level indicator indicating when the marker is empty or close to empty. We will launch to market within one year through via a new LLC and internet sales plus major chains such as Target, Wallmart, Staples, Amazon, OfficeMax.
Techniques for Generating Opportunities • Follow a person passion • Compile bug lists • Pull opportunities from capabilities • Study customers • Consider implications of trends • Clothes sizing • Green • Wireless • Imitate, but better
Techniques for Generating Opportunities • Imitate, but better • Media and marketing activities of other firms • De-commoditize a commodity (competition based on price) • Drive an innovation “down market” – cheaper products with same or similar functions, not all the bells and whistles • Import geographically isolated innovations – Starbucks, Redbull
Mine Your Resources • Lead users – people with advanced needs that are not begin met. • Representation in social networks • Universities and government laboratories • Online idea submission • http://www.ideastorm.com/ • http://www.ninesigma.com/ • http://www.pg.com/connect_develop/index.shtml
Step 3 – Screen opportunities • Pick opportunities with high likelihood of creating value • Consider – market need, technological feasibility, alignment with strategy, etc. • Two methods • Web based surveys • Multivoting • Group must have at least 6 members. More than 10 preferred. • Members must have relevant experience
Step 4 – Develop promising opportunities • Invest modest resources into developing a few opportunities • Search internet for existing solutions • Talk to customers • Quick prototypes • Estimate market size and growth rate • Resolve the greatest uncertainty surrounding each one at the lowest cost in time and money. • List major uncertainties and cost to resolve, then pick the biggest ones with the lowest cost first.
Step 5- Select exceptional opportunities • Real-Win-Worth-it (RWW) method – 3M • Is the opportunity real? • Market size? • Is technology available? • Lkelihood product can be delivered at the right time and price. • Can you win with the opportunity? • Establish a sustainable competitive advantage? • Can you patent or protect it? • More capable of executing it then your competitors? • Is the opportunity worth it? • Do you have the rources? • Will investment pay off sufficiently
Step 6 – Reflect on the results and process • How many opportunities came form internal sources vs external? • Did we consider dozens or hundreds of opportunities? • Was the innovation charter too narrowly focused? • Were our filtering criteria biased? • Are the resulting opportunities exciting to the team?
Thought Questions 2. Would consumers make good raters in an opportunity screening process? 3. Can you really answer the question of whether an opportunity is real before developing a product concept? 4. Could a great opportunity identification process result in a product that fails in the market? 5. How do the risks differ between two types of Horizon 2 opportunities, one addressing a current market need and the other using a current solution?