I was involved in an interesting analysis with an unusual conclusion. The outcome was not one that I had not thought of during the analysis but upon reflection it made perfect sense. I was a market strategy analyst at a one time Fortune 500 and one of the better known tech brands that had fallen on hard times. (Think big red N).
I had a project that was tasked with looking at the different markets that the firm was competing to determine a 3-5 year plan based upon market share, new growth opportunities, barriers to entry, competitive set, etc. The analysis was fairly straight forward in all but one market. The firm had bought a small start up that, at the time, had the hot technology du jour. The market was large and growing at a decent clip given the size. We had the right technology, in some cases better technology than a lot the better known competitors, yet we continued to lose share. The recommendation was to invest more or to fold the cards and integrate the technology into other existing solutions.
The question was: If we have strong technology, we are priced competitively, we are well known, and the market is growing why are we losing share?
The conclusion: Even though we had all of the above that would seem to put us in good position to compete, the feedback from customers was that they did not even think about us when they put out RFP's. In other words, our brand had zero currency in this market because it was not what the customer associated us with being good at and offering. Eventually the technology was folded into other solutions, but I suspect the ROI on the acquisition never came close to the plan.
Just because you have good/great brand equity in one market, does not mean that you can enter any market you see as an opportunity.
No comments:
Post a Comment