Market Opportunities

1. Sizing

   How large the opportunity actually is, built from the bottom up rather than taken from a report, and stated as what is reachable rather than what exists.

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2. Growth and direction

   Where the demand is heading and what is driving it. A shrinking market with a large current size is a different proposition from a small one growing quickly.

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3. Opportunity assessment

   Attractiveness and fit, judged separately. The first asks whether the opportunity is worth having; the second asks whether this organisation has any right to it.

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4. The shortlist

   What the organisation has decided to pursue, and what it has decided not to. Both dated, because both will be revisited by someone who was not there.

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1. PESTEL analysis

   Developed from Francis J. Aguilar’s scanning work · 1967

   A checklist of the outside forces a business does not control: political, economic, social, technological, environmental, legal.

   Its whole function is coverage. Left to themselves, teams scan the two categories they are already worried about, and the change that eventually matters arrives from the one nobody was watching. The letters have accumulated over the decades; the discipline of going through all of them has not changed.

   Reach for it when

   At the start of opportunity work, and once a year regardless of whether anything seems to be happening.

   Where it stops

   It produces a list, not a judgement. Without a second step that asks how likely and how consequential each item is, it is a wall of observations.

   Developed from Francis J. Aguilar, Scanning the Business Environment, Macmillan, 1967.

2. SWOT analysis

   Attributed to Albert S. Humphrey and to the Harvard policy group · 1965

   Internal strengths and weaknesses set against external opportunities and threats.

   Its lasting contribution is the axis nobody names: two of the boxes are about you and two are about the world, and an opportunity only counts if a strength can actually reach it. Used as four lists it is nearly worthless; used as a set of pairings — which strength serves which opportunity, which weakness is exposed to which threat — it still earns its place.

   Reach for it when

   To connect what a business has to what the market is doing, once both have been established separately.

   Where it stops

   It is the most abused tool in strategy. Filled in as four columns of adjectives, it generates agreement and no decisions.

   Edmund P. Learned, C. Roland Christensen, Kenneth R. Andrews & William D. Guth, Business Policy: Text and Cases, Irwin, 1965; also attributed to Albert S. Humphrey at SRI.

3. TAM, SAM and SOM

   Venture and corporate development practice · 1990s

   Also known as Market sizing in three layers

   The whole market, the part your model can serve, and the part you could realistically win.

   Three nested figures, each narrower and each requiring a different argument. The discipline is in the narrowing: the total is usually available from a report, the serviceable portion requires you to state what your business actually cannot do, and the obtainable share requires you to name who else is there.

   Reach for it when

   Whenever an opportunity is being sized, and particularly when the number came from a market report.

   Where it stops

   Every layer is an estimate resting on the one above it. A top-down calculation can be made to produce almost any answer, and usually is.

   Standard venture and corporate development practice; no single origin.

4. The product life cycle

   Popularised by Theodore Levitt · 1965

   Products pass through introduction, growth, maturity and decline, and what to do about one depends entirely on where it is.

   Spending to build awareness makes sense in the first stage and is waste in the third; defending share matters in maturity and is money lost in decline. The stage also predicts who else is in the market: growth attracts entrants, maturity produces price competition, and decline leaves whoever can run it cheapest.

   Reach for it when

   When an opportunity is being judged on its own merits without asking how old the market around it is.

   Where it stops

   The stages are obvious backwards and hard to identify at the time — a dip can be decline or a pause, and treating it as decline can make it one. Nothing in the model says how long a stage lasts.

   Theodore Levitt, “Exploit the Product Life Cycle”, Harvard Business Review, 1965; the concept predates the article.

These are other people’s models, named here so you can go to the source and use them properly. The Omnigoal is not affiliated with their authors and is not endorsed by them; nothing of theirs is reproduced here — no canvas, no diagram, no wording. Each is described in our own words, with the originator credited, because the framework is a place to put thinking, not a replacement for the people who did it. Model names and trademarks belong to their respective owners and are used here only to refer to the work itself.

Size from the bottom up and state what is reachable. Category figures from analyst reports are usually an order of magnitude out.