Market attractiveness: Unraveling the mystery

Market attractiveness is a complex, multifaceted concept that varies significantly based on a company’s unique strengths and the unpredictable nature of market dynamics. Historical attempts to forecast market trends have often been challenged by unforeseen events and the intrinsic difficulty of predicting future market shifts. Reflecting on personal experiences, in this essay Peter Gommers tells of his journey through the trials of market prediction, sharing lessons learned from both successful forecasts and humbling missteps. 

Unpredictable market dynamics 

“Beauty is in the eye of the beholder,” Margaret Wolfe Hungerford famously penned in her 1878 novel ‘Molly Bawn.’ A timeless observation which also counts when identifying the most promising markets for your company. How often have you embarked on a journey to uncover the most attractive growth markets, only to find your selections challenged by the unpredictable currents of market dynamics?

The challenges of market attractiveness

Identifying a market’s allure is no simple task, for several reasons.

1. Its attractiveness is not universally apparent but varies depending on a company’s unique starting point and inherent strengths. 

2. Moreover, market appeal lies in the unpredictable future, a horizon we often struggle to forecast with precision. 

3. Our attempts to navigate the waters of business are further complicated by FUCA (Fast, Unpredictable, Complex, and Ambiguous) events that disrupt established trends, revealing our strategies’ fragility in the face of disruption. 

4. Adding to the complexity, attractiveness assessments involve multiple, often dynamic and interdependent, parameters – challenging our ability to process beyond two-dimensional analyses. 

5. Furthermore, our very actions to engage with a market can alter its appeal, potentially igniting a rush as competitors flock to the same emerging opportunities.

Reflections from experience

Throughout my career, I’ve navigated the highs and lows of market forecasting, making both insightful predictions and misjudged calls:

– Twice, I prematurely heralded the decline of PVC as a major polymer, yet PVC continues to thrive in applications where it remains unmatched.

– On the eve of oil prices soaring past $100 per barrel, I hesitated to secure oil contracts at $20 per barrel, believing $15 to be the ceiling.

– In the early 1990s, I counseled against entering the Chinese market for one of our business lines – a decision that has left us grappling for a foothold in one of the world’s largest markets to this day.

Navigating market attractiveness

So, how do we steer through these murky waters?

1. Acknowledge your blind spots:

Begin with a recognition of your limitations and meticulously evaluate your approach against the five risks outlined above. Engaging multiple stakeholders, both internal and external, can enrich your analysis.

2. Blend data with foresight:

Employ a mix of solid trend data and foresight techniques to project future scenarios, setting milestones along the way to gauge your trajectory.

3. Embrace diverse perspectives:

Encourage unconventional viewpoints and creativity, resisting the urge to dismiss outlier ideas prematurely. While simplification can be tempting, strive to reduce complexity without diluting your strategic logic.

Upon setting a course, commit to regular reviews and cultivate the agility to pivot as needed. Rarely will the initial choice prove perfect, and the certainty of unforeseen challenges necessitates a readiness to adapt.

In today’s climate, marked by flux in healthcare, economics, politics, and consumer behavior, adopting a robust, scenario-based approach to market attractiveness can empower your strategic positioning, equipping you to navigate and capitalize on the evolving landscape.

Ready to unveal the mysteries of market attractiveness?

Whether you’re refining your strategic approach or considering new market opportunities, it’s crucial to understand the multifaceted nature of market attractiveness. If you’re seeking guidance on assessing and responding to your business challenges, feel free to reach out at peter.gommers@peter4strategy.com for +31-6-53361249. 

Inspired, but not facing a concrete challenge right now? Let’s connect on LinkedIn to stay in touch and share valuable insights.