opportunity analysis
Before a need is acted upon and resources are expended trying to meet it, analysis should determine if it is in the best interests of the business to pursue it. While there may be numerous opportunities, not all will be equal in risk or reward. Aside from determining costs and profit potential, a company must also assess if the opportunity is compatible with its position in the marketplace, and suitable to its goals.
Once a market need and opportunity is defined in detail, your company needs to analyze its own ability to bring a timely solution to market, as well as the potential of the opportunity to add value to the company. There are many questions to consider. There should be some general ideas about what might be created to fill the need. Those ideas should be discussed with people in engineering and manufacturing to understand what is required to fully define the product, the resources required to develop it, and the costs to produce the product. Is the product something existing customers would expect from the company? Will the company be required to build awareness in a whole new customer base? What will be done to promote sales of the product? Will new relationships for distribution be required? Is an additional budget allocation required, or can existing budgets be used? What sales level is required to recuperate development and promotional costs? What profit margins should be targeted? Is there anything in the timing of the opportunity that is critical? Are there some conditions to watch for that would flag a course correction or require abandonment of the project?
These and other questions need to be considered. If the product and market are complex, this could be a substantial exercise. On the other hand, there are some products that may be “no-brainers.” Something that’s so obviously right to the decision makers that a formal analysis does not need to be exhaustively documented.
The purpose of opportunity analysis is to map out the company’s intentions and expectations, and as a reference for building consensus. It will be used by executive management to determine whether the project will add to the company’s performance, and it will eventually be used by product managers to determine if the project is on course. Proper analysis of opportunities can be the difference in a company’s ability to consistently select those which yield the best profitability, especially when there are several opportunities competing for valuable resources.