Value, Cost and Timing

The Value of Opportunity Analysis

Most businesses realize an immediate impact of Opportunity Analysis and substantial reduction of commercial risk. New products ready for introduction into current or adjacent markets will have many of the marketing mix elements identified, almost always with a better understanding of value pricing and staying power. Technologies earlier in the development cycle benefit from a clearer view of real targets for efficient development and fine tuning, based on a more definitive understanding of requirements. Managers of projects that would eventually be shelved—for want of need or value or due to competitive issues or timing—are able to reach that conclusion faster and take remedial action with confidence. All these decisions translate to speed, efficiency, and cost savings for the client. On the return capture side, one internal study at a major client showed the first year range of profitable returns on Opportunity Analysis projects was between 8.5 and 150 times the cost to undertake the study. The ROI over the life of a product-market was of course considerably higher.

During this phase, we also map the resources of the client to the opportunity to be sure there is a potential match and a credible potential of competitive advantage. This preliminary work sets the analysis in the right direction, ensures everyone is on the same page, and in the long run saves both time and cost. The responsible team and the analyst share a common view of the project’s definition, its complexity and the critical issues to be understood. Often multiple product-markets are singled out in this process. We help the team use its own prioritizing criteria to rank these opportunities for the Analysis Phase. With these elements understood and agreed, Opportunity Analysis Associates can provide management with a reasonable estimate for the field research and analysis.

Analysis Phase

In this phase, the bulk of the external research is carried out, findings are documented, hypotheses are revised, models are built, analysis is completed, discrepancies are resolved, and a final report is prepared. Through this focused effort, Opportunity Analysis Associates deliver an actionable path forward recommendation whose value is disproportionate to the cost. Because of its inherent efficiency and our abundance of experience, we have found that a typical Opportunity Analysis of a specific product-market requires between 150 and 350 man-hours of work spread over a period of 8 to 12 weeks from start to finish. Only in rare circumstances are as many as ten interviews needed in this phase. A project with low probability of success can usually be determined fairly quickly, often with as few as three interviews.  If, as we suggest, an employee-analyst is to be coached through an opportunity analysis project, the personal mentoring will be factored into our quote for this phase, and the total time from Opportunity Analysis Associates can be reduced. The actual time and effort required of course depends on project-specific factors such as the following:

Factors Influencing Project Complexity

• Ability to clearly define the target product, market and opportunity

• Internal knowledge available as a springboard for external assessment

• Contacts and relationships with knowledgeable potential users, particularly individuals immersed in the need for the function being performed (after completing the hypothesis work, different sources are often indicated)

• Management participation and support

• Extent and plausibility of assumptions

• Consensus on make-or-break issues

• Level of modeling, or prototype demonstration required to address critical issues for consumer type products

• Depth and complexity of the marketing channel

• Industry trade shows or conventions during the course of the project can increase efficiency dramatically

• Management review timing

• Desire to purchase a one-off “answer” of a complete and independent project analysis or to have an internal analyst coached through the project