Whenever a new company launches a product or service, it can enter an existing market or make a new market. The traditional and possibly more straightforward option is to develop products for existing markets, but there are many profitable benefits of creating new markets.
Why should I make a new market?
Before you start looking for a way to make a new market, it is essential to consider the benefits of this approach and market development to your business.
Creating a new market means that you are the first to act, and the world is yours. This can bring benefits to the business. Thinking outside the box should not be something that companies should avoid. The potential benefits of being able to create a whole new market are impressive. Your company will be the first company to enter the market, giving you a competitive advantage over the next few years, and market development will be easy for you. Customers will learn to trust you to be “the number one in the industry.”
The profitability can be understood through the examples of companies such as Netflix. The company initially provided a monthly DVD rental service. Even if the service provided is different from the original concept, it can still maintain its leading position.
If you can use your products or services to meet precise customer needs and at the same time create barriers for potential competitors to enter the market, you can occupy the market in the future. If a competitor does not operate in a brand new market, it isn’t easy to see that Netflix will lose to the competitor.
In addition, strategic thinking is different when entering existing markets and entering existing markets. Create a new one.
If you are going to do a market creation, you will not focus on competing with existing players. Instead, your strategy is to focus on dominating the entire market from the start.
On the other hand, if you are trying to enter an existing market, the focus is usually to improve the product or service through quality or functional improvement or by focusing on the cost of the product. In other words, you trust the pre-existing conventional wisdom of the market and industry. Unfortunately, this leads to a convergence of competition.
However, when you make another market, you are altogether centered on making an item or administration that furnishes clients with genuine worth. You are not developing business ideas within the existing scope but looking for innovations with real value.
Innovation in market creation can help attract consumers and stimulate their interest in new ways of doing things. Consider the Home Depot. The company successfully created a new market for DIY enthusiasts by jumping from the traditional hardware store model.