Acquisitions, new products, and new market sectors present growth opportunities as well as risks. Before investing resources, it is essential to validate assumptions about the size of the opportunity and requirements to succeed.
Isurus helps clients understand market opportunities by using a framework to explore:
Total Addressable Market (TAM):
A range of dimensions factor in the TAM for any given market, including the solutions in place today, level of spend, and product/investment lifecycles. Equally important in assessing TAM are barriers such as satisfaction levels with current solutions, existing business processes and infrastructure, as well as brand perceptions.
Taking advantage of an opportunity requires knowledge of the market’s behavior. This insight includes the core buying criteria the market uses to compare vendors and solutions, fit with existing processes, connections to existing ecosystems, etc.
Timing of the Opportunity:
An often-overlooked factor when evaluating opportunities is the market’s readiness to adopt a new solution. Companies will often ride out an investment lifecycle of a product – even if it no longer fully meets their needs. Expectations for regulatory change or new standards can also delay investments.
Competitors represent a barrier to capitalizing on new opportunities or entering the market. Business and marketing plans should assess the number of competitors and their relative strengths and weaknesses.
Marketing & Sales Changes:
New opportunities and markets often require a change in corporate, product and field marketing. The processes that work in one market don’t always work in another. Vendors are often pigeonholed in one category or lack credibility in a new space. The market challenge may be education rather than awareness and differentiation.
Health of the Customer Base:
The value of an acquisition is tied to the health of the target’s customer base. Are customers satisfied? Do they plan to continue to invest at the same or higher levels? How might they react to a change in ownership? When incorporated into the due diligence process, these data inform both the current and future value of the acquisition.