How to Find Niches and Opportunities
How to find niches and opportunities to fight the recession blues.
A useful tool for any business is a checklist to find niches and opportunities in a recession:
- You can look at new customers and markets
- You can look at developing or changing your product or service
- You can do some combination of the two above
Checklist to find niches and opportunities
- Neglected markets where, say, customer needs have outpaced provision e.g. hand-built cars like Morgan, importing organic wines
- Unfilled need: e.g. work away from office creates a demand for laptop computers and better mobile phone technology
- Disadvantages in existing products e.g. caffeine in coffee leads to decaffeinated coffee, short-life of cut flowers leads to demand for sachets containing long-life crystals for flower water
- Omission in otherwise well-served markets e.g. paper nappies, outdoor workers require robust mobile phones and laptops
- Extensions or new formats for proven lines e.g.- T-shirts, scarves and sweatshirts for Rugby Supporters’ Club, Weight Watcher soups/Heinz,
- Technological breakthroughs e.g. email-driven mentoring and business-support, special covers for reducing mobile phone radiation, bagless vacuum cleaners
- Transferable success from other markets e.g. yo-yo from Hawaii, Tapas bar from Spain
- More economical ways of satisfying wants now being met expensively: temporary office accommodation, freelance IT managers that you buy in for a day or so a month
- Less economical ways of satisfying wants that are being met only adequately: Ben & Jerry’s ice-cream, designer-tailored football boots
- Copy substitutes: copy the competitive offerings e.g. Wild Oats copied theme pubs and made board games and newspapers available in the restaurant, local delicatessen starts sandwich round to maintain sales
- Do the opposite of traditional industry norms to emphasis the difference: Gerry Bentley adopted a ‘pen and ink’ approach to all communications in the face of database-driven and computer communications that his competition were using; chef Andreas Honore serves all meals to the tables of his restaurant guests
- Change the product appeal and/or reinventing yourself e.g. Lucozade changes itself from being a sick person’s drink to being a healthy persons fitness drink, Viewfrom move from satisfying mass market to appeal to professional athletes
- Change the use of the product e.g. isopropyl alcohol branded as video tape head cleaner and sold at ten times higher price; bicarbonate of soda packaged and branded as refrigerator cleaner.
- Add complementary products or services e.g. CD Shops selling books and merchandise to complement CDs available, dentist selling general and specialist toothbrushes
How not to…!
NJ Filters (NY), manufacturer of air conditioning filters, turned over $11 million a year. The managing director saw an opportunity in a business advertising magazine, to manufacture and install specialist waste filter systems to landfill sites in the Middle East. This was far from core business; indeed it was a case of new product, new market. This strategy sustained heavy losses, as the firm was not able to accommodate the new demands made on it by the entry into new products/services.
A California-based retail computer company that specialised in selling PCs to the home market, attempted to sell very expensive mainframe computers to large corporate organisations. Within three months it was in the insolvency courts. They simply did not realise how different the new offering was from the old one. Because they were both computers they (incorrectly) assumed that the same skills would be required to sell them, but the types of buyers and their needs were totally different as was the product and its features.
In both instances, the diversifications sustained severe losses – the companies were simply not prepared for the demands of the new situation.
Diversification often looks like the sexy new option, the silver bullet we all looking for. Just be careful. Do your research and do the numbers. Don’t just assume that it will work!