Isurus Market Opportunity Analysis Overview

Market Opportunity Assessment

Isurus Market Research and Consulting | www.isurusmrc.com | 617-547-2400


Market opportunity assessment is the comprehensive and systematic estimate of what portion of the

market will buy a new offering. It is used to guide product development investment decisions, and can be

applied at various stages of the decision process (preliminary evaluation, providing data for a business

case, and guiding final go/no-go decisions).

Comprehensive and systematic market opportunity assessment:

reduces risk, by enabling companies to avoid unproductive costs, missed opportunities, and

investments that dilute the portfolio management strategy.

increases the likelihood of a successful product introduction, by providing a realistic assessment

of the product development, marketing, and sales challenges the organization will face.

Market opportunity assessment: What is it and why is it important?

Framework


The Isurus framework for market opportunity assessment

The Isurus framework measures market opportunity using four dimensions of data.

Although the market’s stated intent to buy the offering is central to assessing market

opportunity, a more accurate assessment factors in the buying environment as a whole,

including market pain and priorities, positioning of the seller’s brand, and buying behavior.


Isurus’ approach to market opportunity assessment

Isurus’ approach addresses two common problems that occur in estimating market opportunity:

Overestimating the market’s likelihood to buy due to:

The “wow” factor”: When a new offering is particularly innovative and exciting, the initial interest

and buzz doesn’t necessarily translate into purchases.

Market readiness: Even when a new offering fills an important need in the marketplace, it can

take longer for organizations to adopt it because their existing internal processes and systems

prevent them from using it effectively.

Overestimating the opportunity for your organization

A realistic assessment of the opportunity for your organization should factor in both reactions to the

offering, and your organization as the provider of it. Some offerings may be a better opportunity for

a competitor than they are for you.


Marketplace pain and priority

Isurus’ research across all industries consistently shows that organizations make significant investments

only when they have pain, and when it is an organizational priority to address the pain. Innovative

technology or exciting functionality can generate interest but rarely leads to widespread market adoption if

the product doesn’t also satisfy a recognized and important problem in the business.

Market opportunity assessment should determine:

What business problems does the offering solve?

How critical is it to solve the problem, or can they continue to live with it?

How important is the problem, relative to other priorities?

Does the market’s tolerance for change fit with the new offering?


Brand positioning

A realistic assessment of market opportunity takes into account how the seller is positioned in the marketplace.

In short, the market may want to buy the offering but will they buy it from you?

The seller’s brand awareness and image in the target market impact the

opportunity for a new offering and the investment required for the seller to

take advantage of the opportunity. A well-known brand that is viewed as

a credible provider of the offering typically equates to greater opportunity

for the new offering. If the seller’s brand is less well-known, it will take

more money and more time to establish the brand as a viable provider of

the new offering.

Provider awareness and image

Competitive landscape Market opportunity assessment should include an analysis of the

number and strength of competitors. For entrenched competitors, this

analysis should include an objective assessment of their strengths and

weaknesses and estimates of likely win-rates against them.


Buying behavior

Understanding the buying behavior for a new offering provides a realistic assessment of the investment and

time required to acquire customers.

A comprehensive market opportunity assessment factors in:

Buying cycle: Is the offering a replacement of an existing solution, or a new purchase? If a

replacement, what is the typical lifespan of the existing solution?

Knowledge of the decision makers: Do marketing and sales have existing relationships with the

decision makers, or will the offering require them to identify and build new relationships?

Purchase cycle: How long is the evaluation and purchase process likely to take?


Intent to buy

The market’s stated intent to buy is central to assessing market opportunity: It provides a concrete reaction

to the concept and serves as the basis for analyses using other dimensions in the framework.

The offering description is critical for accurately assessing market opportunity. It should provide a realistic

representation of the offering but doesn’t need to be a fully fleshed-out product description. For most

enterprise software offerings, the offer description should:

Provide a benefits-focused summary of key features and functionality

Describe the delivery model (on-premise, SaaS, etc)

Address integration and implementation, if considered to be important value drivers

Present the pricing model and price points

Be objective, and exclude marketing- or sales- language.

Intent to buy data are filtered by other dimensions in the framework to provide a realistic assessment of

market opportunity. Topline intent-to-buy data typically over-estimate the true size of the opportunity.


Isurus framework summary


Market pain and priorities

Intent to buy

Brand positioning

Buying behavior

How significant and widespread is the pain in the marketplace?

How critical is the need to address the pain, or will the market continue to live with it or make due with workarounds?

How likely is the market to take concrete action? Has budget been set aside to deal with it?

How does this problem rank, relative to other organizational priorities?

Does the tolerance for change in business processes fit with the offering?

Does the company have sufficient awareness and equity in the market to be a credible provider?

Who are existing competitors, and what is their strength in the marketplace?

Is the market willing to invest in the offering, at specified price points and on a defined timeframe?

To accurately forecast market opportunity, key parameters of the offering must be defined for the market:

Features and functionality Pricing model, pointsImplementation and integration Delivery model

A company’s ability to take advantage of the opportunity is strongly influenced by:

• The timeframe of the buying cycle, which is typically influenced by whether the purchase is a replacement (and therefore tied to churn cycles) or a new investment.

• How effectively high-opportunity segments can be identified by size, industry, customer status or other characteristics.

• If marketing and sales have existing relationships with the decision makers, or if the offering requires them to build new relationships.

Outcomes


Outcomes: benefits

A systematic market opportunity assessment provides benefits across the organization.

Set realistic expectations Forecast unit sales, sales cycle, and uptake timelines based on primary market research data.

Assess the opportunity’s “fit” for your organization – just because there is a large or growing market, doesn’t mean it is necessarily a good opportunity for you.

Manage the product portfolio Provide a systematic, research based framework for comparing and evaluating product investments.

Inform marketing

Inform product development

The benefits of market opportunity assessment:

Better position the offering by identifying the benefits and features with highest perceived value

Capitalize on competitor vulnerabilities

Refine the product offering to maximize market appeal

Documents

Isurus Market Opportunity Analysis Overview