Limited‐potential niche or prospective market foothold? Five tests

Abstract

Purpose

The authors offer advice on how can managers can distinguish between limited‐potential niche and crucial market foothold opportunities. The distinction is crucial in order to make the case for funding and supporting for the small, but potentially important, foothold business areas.

Design/methodology/approach

Over the past few years the authors have worked with a number of large companies. They have found several straightforward tests for distinguishing between footholds and niches that have proved to be very useful when incorporated within a development process.

Findings

The authors propose that a strong foothold opportunity exists if managers answer “yes” to five tests: Does the product provide clear value to new customers? Can an initial, viable product be brought to the market sooner rather than later? Will the first customers pay for the improvements needed to enter larger markets? Will initial applications diffuse the product across traditional market segments? Is there limited reliance on third parties for major product improvements?

Research limitations/implications

Their findings are not intended to be the last word on identifying footholds, but instead a starting point for managers.

Practical implications

Working with company management, the authors have successfully incorporated these tests into early product‐ and market‐development activities and decision making through process steps and metrics.

Originality/value

After asking all five questions, if a manager's analysis of a potential business opportunity indicates that it is a strong foothold, then it's likely it has a significant long‐tern potential for the business.

Citation

Hutt, K., Gavieres, R. and Chakraborty, B. (2007), "Limited‐potential niche or prospective market foothold? Five tests", Strategy & Leadership, Vol. 35 No. 4, pp. 18-22. https://doi.org/10.1108/10878570710761345