Finding a Big Enough Market Insight ABC Recruitment

Finding a Big Enough Market Insight

Jun 20, 2011 Career News

Why was Segway’s two-wheeled vehicle a commercial failure while Zipcar’s car-sharing service enabled its provider to raise $174 million following an initial public offering? Both companies offered affordable green transportation. Unlike Segway, Zipcar (ZIP) had what we call a BEMI—a “big enough market insight.”

As we conducted research for a recent book, we discovered that high-performing companies tend to be able to identify and leverage a BEMI, an insight that serves as the foundation for the creation of a major new business.

For Zipcar, the insight was that many people in urban areas occasionally, or even regularly, need a car for less time than the 24-hour period typically offered by car-rental companies. Zipcar also believed that its ecologically sound proposition—the company reports significantly fewer car purchases made and miles driven by its members—would appeal to an increasingly green-conscious consumer.

In the case of global health-care giant Novo-Nordisk (NVO), the insight was that the risk of diabetes would grow in emerging markets such as China as people adopted less-healthy diets. Novo-Nordisk first recognized this impending shift in the late 1990s, when the company was lagging behind market leader Eli Lilly (LLY). Today, Novo-Nordisk is the global leader in the insulin market, with more than a 50 percent market share.

To identify a BEMI, companies must answer three questions.

Is the insight big enough for your company?

Obviously, “big enough” is a relative term. Consider how two very different companies, Samsung (000830:KS) and Ovideon, successfully acted on the same BEMI: that advancements in plasma and liquid-crystal display technologies would lead to the development of sleeker TVs with superior picture quality, thus motivating consumers to replace perfectly good sets with more-expensive flat-panel display models.

Samsung, the Korean consumer electronics giant, does its own TV manufacturing to control both quality and costs for its high-volume operations. So far, the huge investment in manufacturing capability has paid off. In 2009, Samsung controlled about 17 percent of the total TV market, shipping more than 27 million LCD models and more than 3 million plasma sets.

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