#3 Key Question: How do international market leaders systematically identify new markets and business areas?

Sustained competitive advantage in differentiation, customer surplus value and cost efficiency are the fundamental requirements for successful and long-term market engagement and are therefore the key criteria for selecting a business field. These success criteria must on one hand be predictably achievable within the given and future external market conditions of the potential new business area and on the other hand be realizable through the company’s capabilities for long term value creation. Consequently two areas of analysis emerge, where current and particularly future conditions must be made transparent in a realistic manner in order to allow a judgement, if the company can meet the key success criteria differentiation, customer value and cost efficiency in a long-term oriented way for sustainable profit maximization:

  • External Conditions: Influencing factors from the broad and close market environment
    • Broad market environment: Politics, economy, sociocultural factors, technology, ecology, legislation
    • Close market environment: Competition, customers, value chain partners
  • Internal Conditions: Company capabilities
    • Corporate competence, management competence, differentiation potential, value creation efficiency

Comparing the company’s internal capabilities with the external conditions, developments and potentials of the envisaged new business fields the conclusive results need to be reflected in quantified business and financial planning scenarios. Based on these planning scenarios the company makes decisions about a new market engagement within a multi-stage process, taking into account potential risks in particular and ensure long-term strategic and value-creation perspectives are achievable in realistic and sufficient way.

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