Product Strategy Step Three - Analyze All Opportunities

Out of all possible new opportunities identified in the last step, you need to focus only on areas which are feasible / profitable and which your business is interested in. This will help you zoom in on products, markets, and technologies which should be priorities for your business / new product development. These will be your true strategic opportunities.

To eliminate potential opportunities which should be low priority, you need to analyze each opportunity by going through the following strategy analysis steps:

1. Company Analysis:  
   1. Compare each opportunity with your company's mission and vision by asking this question: does the opportunity fit with the mission, vision, and core competencies of my business?
   2. Evaluate how the opportunity will affect company's relationships with its collaborators / alliance partners. 
   3. Will the new product enhance the company's existing brands, or will they be diluted? 
2. Market Analysis: 
   1. Is this a new market or an existing market?
   2. What's the size, or dollar volume, of the market for each opportunity?
   3. What's the number of potential customers for the product?
   4. To what degree will the new products meet customer needs better than competing products?
   5. What's the long-term potential of the market?
   6. What's the growth rate of the market? 
3. Evaluate Complementary Assets - Sales & Marketing:  
   1. What's the degree of fit between the sales force and distribution channel system required for this opportunity and those of your sales channels? 
   2. What's the degree of fit between the advertising and promotion skills required for this opportunity and those of your marketing team?
   3. What's the magnitude of the positive impact on customers?
4. Technology Analysis: 
   1. What's the technology level of the products sold in this market?
   2. What's the nature of the technologies presented in this opportunity?
   3. Will these technologies disrupt the existing technologies? Will the target customer segments easily adopt the new, improved technologies?
   4. What's the company's potential for developing technologies for this opportunity?
5. Evaluate Complementary Assets - Engineering / Production Capabilities: 
   1. What's the degree of fit between the production / development processes used for this opportunity and your current production / development processes and skills?
   2. What's the degree of fit between the research and development resources required for this opportunity and the current design and development / production resources of your engineering team?

Measuring the comprehensive list of potential opportunites against all the above mentioned steps will help your business pare down the list to a few strategic opportunities / projects your business can focus on. This focus will improve new product profits because your business will target its energy on strategic areas that will pay off. In particular, this strategic list of opportunities will provide your new product strategy with direction for idea generation, criteria for project selection, and targets for resource acquisition / allocation. To determine if each of these strategic projects will financially pay off, you need to evaluate if each of these is a positive NPV project or not.