Select one market segment from the Market Segmentation analysis, Step 1, to be the first market your business will focus on to achieve initial business success.
As a new entity, you have limited resources, so focusing those resources is essential. You do this step now because, now that you have completed at least a first pass Market Segmentation, you can start to intelligently concentrate your efforts on a single market segment to make better and faster progress.
The Merriam-Webster Dictionary defines beachhead as “a beach on an enemy’s shore that an invading army takes and controls in order to prepare for the arrival of more soldiers and supplies.” The analogy for entrepreneurs is that to optimize your chances of success in a timely manner, you will employ the same game plan, choosing a small market segment you can control until your company has sufficient resources to enter other markets.
First, ask yourself: Are the markets from your Market Segmentation in Step 1 well-defined enough and small enough to attack successfully and not only conquer, but dominate? You will compare each market against the three conditions that define a market, which I have refined from Disciplined Entrepreneurship and focused on the end user:
Use the Market Segmentation Certification worksheet at the end of this chapter to analyze the markets from your Market Segmentation, then go back and refine your markets if necessary—it’s almost always a requirement to further segment your markets.
Once your Market Segmentation is sufficiently refined, it’s time to choose your Beachhead Market. A few tips:
You’ll consider the same seven key criteria that you used during the Step 1 Market Segmentation:
Use the Beachhead Market Selection worksheet to compile your notes on your potential Beachhead Markets and to rank and make a decision about which will be your beachhead. It may take a number of iterations, and you might not end up being right with your ultimate selection. But if you later determine your selection will not work, you can always come back (much more easily than if an army chooses the wrong beachhead!) and restart at this point with more confidence and skill in executing the process. For now, you want a good amount of confidence that your structured analysis and plentiful primary market research have brought you to this reasonable decision.
Finally, before you move on to the next step, all of your team members must sign the Agreement on the Beachhead Market Selection. It is important that everyone is on the same page (literally!) and that they are enthusiastically behind the direction your company will be going in. Companies that thrive in their Beachhead Markets are companies with strong cohesion and unity.
See the back of the book for answers to these questions.
___ Yes ___ No
Do your market segments identify actual human end users and not just general companies or department in companies?
___ Yes ___ No
Are the market segments segmented down into reasonable sizes for your start-up to address (i.e., less than a billion and more than a few hundred thousand)? (More on this later in Step 4.)
___ Yes ___ No
Are these criteria met? If these criteria are not met, then continue to iterate on the market segmentation matrix until they are.
___ Yes, then done ___ No, then iterate (return)
Understand that your first Market Segmentation Analysis does not have to be correct; it will certainly have lots of holes in it, but make an intellectually honest attempt (i.e., without biases as much as possible) to answer the fundamental questions in the matrix as best you can. Only then can you make an educated guess on what the top Beachhead Markets are to analyze further.
___ I understand, and now I can proceed.
Beachhead Market Selection Worksheet
Criteria
Market Segment = _______________
Market Segment = _______________
Market Segment = _______________
Market Segment = _______________
Rating is Very High (best), High, Medium, Low, Show Stopper (worst)
1. Economically attractive
2. Accessible to your sales force
3. Strong value proposition
4. Complete product
5. Competition
6. Strategic value
7. Personal alignment
Overall rating
Rating for ranking is 1 (most attractive) to 4 (least attractive) – key factors is most important contributor to the ranking
Ranking
Key deciding factors
Decision for Team to Sign Off on the Beachhead Market
18.118.166.98