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New “markets for judgment” like the Creative Destruction Lab are bridging critical gaps between scientific breakthroughs and commercial applications — fueling tech-based entrepreneurship far from Silicon Valley.
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“Hot” market segments that appear to have significant future growth potential are appealing for obvious reasons. But new research finds that technology entrepreneurs and the investors who back them often do better if they identify winning strategies in markets that aren’t hot.
With the emergence of a digital economy over the course of the past two decades, leading companies have learned that they must act faster to respond to customer needs and competitive dynamics. The fourth annual Big Data Executive Survey confirms that Fortune 1000 firms recognize that faster time-to-insight correlates with success and will be the driving force behind Big Data investment for the years ahead.
How can companies capture new opportunities most effectively? When evaluating new business opportunities, there’s a paradoxical tension between strategic focus and flexibility. Managers tend to be opportunists or strategists, and while most managers focus their attention on opportunity execution, opportunity selection appears to matter as much. Sustained business success seems to depend not just on capturing one opportunity but also on stringing multiple opportunities together.
Al Roth, expert in game theory, experimental economics, and market design (and Harvard Business School professor), is one of the big names in the field of matching markets — building efficient systems that match, for instance, new doctors to their first hospital jobs out of medical school.
Nonmarket strategy recognizes that businesses are social and political beings, not just economic agents. Smart executives engage with their social and political environment, helping shape the rules of the game and reducing the risk of being hemmed in by external actors. These executives realize that in a global economy, sustained competitive advantage arises from tackling social, political and environmental issues as part of a corporate strategy — not just pursuing business as usual.
Many large and mature firms — which still form most of the economy — have difficulty analyzing the opportunities and difficulties created by the Internet. Here is a planning process, validated at several established companies, that puts e-business into perspective and helps make it manageable. “Using our e-business planning process,” write the authors, “senior management in established companies can identify attractive e-business initiatives, analyze their functional scope and assess the sustainability of the benefits.”
A market research technique called conjoint analysis can help managers predict what kind of affinity marketing program is likely to offer the best return on investment for their brand.
Three forces are changing the customary rules of distribution channel management: proliferating customer needs, shifts in the balance of power in channels and changing strategic priorities. The authors propose a strategic approach to planning for future channel configurations, control of the channel and resource commitment.
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