186 Strategic Marketing: Planning and ControlMarketing assets
Does the market segment allows a company to take advantage of its current
marketing strengths? Successful situations are more likely to occur where a company’s
current brand identity, or method of distribution, is consistent with those required to
enter the new target market.
Cost advantages
Entering a price sensitive segment would be consistent with the capabilities of an
organisation that has a low cost base.
Technological strengths
Where the organisation has access to superior technology is its use compatible with
the market segment, and will it allow the company to gain any advantage?
Managerial capabilities and commitment
Does the company have the technical and managerial skills necessary to successfully
enter a market segment?Figure 9.4
Examples of assets
and competencies
matching with
potential market
segments
Overall the organisation has to establish whether entering a particular
segment is consistent with its long-term aims and objectives. If not then
no matter how tempting entering the segment should be resisted. It will
only divert company resources and management time away from the core
goals of the enterprise.
Once the key areas of a company’s capabilities have been identified
they can be aligned with the attractive market segments already identi-
fied. An organisation should enter segments that allow it to exploit cur-
rent assets and competencies, or will allow potential capabilities to
develop into strengths. This is an area where adapting portfolio models,
more normally used to evaluate current products or business units, can be
useful. The shell directional policy matrix for instance can be adapted to
analyse market segment opportunities against corporate strengths. An
adapted version of this model is shown in Figure 9.5.
Weighted criteria are used as in the traditional usage of the model. In
this case a selection of market attractiveness factors, from those discussed
earlier, that are considered relevant in evaluating a particular sector are
weighted according to their importance as judged by the organisations’
management. The same exercise is then undertaken of selecting a range of
assets and competencies deemed relevant to this particular sector. These
are again weighted. Choosing factors in relation to the specific area being
considered ensures that the model is custom made to the particular situ-
ation and organisation under review.
Every potential market segment is then evaluated on a rating scale
normally of 1 to 10 (1poor 10excellent) on each of the criteria. The