By Denise A. Harrison
Customer Concentration and Market Segment Analysis
For example, recently Fortune discussed how Wal-Mart set standards for their suppliers to implement RFID tracking technology on all of the products provided to Wal-Mart for sale. Even large companies like P&G are scrambling to meet these Wal-Mart requirements, Wal-Mart is over 15% of P&G's business. Implementation of this technology will be a significant investment for P&G so it is important for the team to take this into account as they develop the P&G strategy plan and ensure that resources are allocated towards this project.
Strategy Tip: As you develop you market segment analysis, be cognizant of the number of potentials customers and any concentration of your company's business in a particular customer. If you find you have high concentration then you must make sure you understand the customer's changing needs and preferences and be sure you take these into account as you develop your strategy. If your market does not have high concentration you will want to identify belle weather clients so ensure you are able to spot industry trends early.
Innovation: where to look for it
A recent WSJ article (4/9/04) discussed how Allegheny General Hospital looked to the automotive industry for ideas. They took the concept of root cause analysis and applied it to their intensive care unit. Once they identified the root cause of infections they were able to change procedures and lower the incidence of infections by 90% saving the hospital $500,000 per year.
Strategy Tip: Look around; good ideas abound in other industries. What is even better, they have streamlined the application. One word of caution: be sure to understand what adjustments need to be made for your industry before moving ahead.
Market Feedback: Key to Identifying Growth Opportunities
Strategy Tip: Be sure that you get impartial feedback from your customers. This feedback is key to spotting changing trends before your competition.
Your market is shrinking; can you find a new market for your product/service?
Strategy Tip: Selling an existing product/service to a new market — be creative! If this new market is viable be sure that your team analyzes the distribution required and analyzes if there are any market requirements that would not be met by the existing product. Sometimes minor modifications are necessary to prevent a black eye when the product is launched into this new market.
Denise Harrison is a Consultant with Center for Simplified Strategic Planning, Inc. She can be reached via e-mail at
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