Tuesday, April 12, 2016

Discovering New and Emerging Markets - Sarah Thomas

Clayton Christensen illustrates some very interesting points in the excerpt, “Discovering New and Emerging Markets” from his book The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. One area that really stood out to me was the importance of conserving resources so you can iterate towards an effective strategy. Christensen mentions that most businesses move away from their original strategies and adapt new plans as they see what is and is not working in the market. I believe that taking this approach will allow you to address market demands and customer needs. Also, conserving resources will allow you have more control and flexibility as the market fluctuates.
Like we saw in the Cola Wars article and in The Five Competitive Forces article, it is very important to listen to your customers and adapt to their needs. Unlike in the Cola Wars, all of the companies that were discussed in this excerpt had relatively high switching costs, which decreases the customers’ leverage and power. However, understanding where the market is heading and how people want to consume products over time is very important. If you overlook disruptive technologies in your industry, you might end up loosing valuable market share or credibility. This is why it is so important to conserve resources and use them mindfully. Understanding that your strategy might change and that your organization might be forced to adopt new technologies or processes is key to sustainability and survivability.  
Currently, I am in the process of starting my own subscription based dessert company and I find Christensen’s points very interesting. In my opinion, the food and beverage industry has been very stagnant with regards to how they deliver products to their customers. Brick and mortar grocery stores have been the primary way for people to shop for their groceries for a long time. However, as people continue to work longer hours and have other responsibilities that they need to tend to, they are looking for alternative, less time consuming ways to get what they need at home. This is why I think there has been a huge uptick in the demand for subscription based food services. This approach is more convenient, less time consuming and often times cheaper than shopping in your local grocer.

While it is hard to tell if the subscription based food companies will continue to flourish, I will be sure to conserve resources so that I can adapt to the market demands as they fluctuate. While I am currently resource constrained due to start up costs, I understand the importance of having resources available to address market changes in the future. Being able to invest in research and development efforts that address market demands will allow you to solidify new go to market strategies. Another valuable perspective that Christensen mentioned is that it is important to watch how people use your products. Sometimes the best ideas come from just watching how people consume products. You might uncover a new application or process during such evaluations. This can lead you to new ideas and innovation that will allow your company to survive or create disruptive technologies or new markets that promote value to the customer.

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