Critical Questions Every Leader Should Ask About Their Market

McDonald’s has sold more than 100 billion hamburgers, but did you ever wonder why they never sold hotdogs in America?

Simple: they know their market, what works and what doesn’t. Plus, their founder, Ray Kroc wasn’t a fan of the hotdog – and he turned out to be relatively successful.

Here’s a simple question for company management: Do you know whether or not your company should sell hot dogs?

As your company expands and builds value, one of the crucial areas you must have a firm grip on is your market. Sure, you’re saying, “We sell acne medicine to teenagers, what could go wrong.” Fine, but how much do you really KNOW about the teenage marketplace?

However you answer that question, conducting a market evaluation plays an integral part in building long term enterprise value. This exercise is designed to help you and your leadership team decide where your company currently fits in the market, and where it can grow. There is vital information just waiting to be discovered that will surprise – and hopefully – delight you and your team.

Product and Service Development

The first place to focus is the development of your services or products. Ask yourself, what exactly do we do? And how well do we do it? Who do we do it for?  Can we keep doing this and profitably grow?  Can others mimic our success and steal our market share?  Is our product or service a platform that can be leveraged or a stand-alone with no future?  What is the health of your market: is it growing or stagnating? Don’t forget to check if the market has developed a submarket that is taking off in a new direction!

Product and Service Delivery

Delivery of your services or products is another key target –consider your sales cycle and how long it takes between a client’s first interaction with your company to a completed sale. If your delivery method is still in development and varies from case to case, it’s time to establish processes and procedures to develop consistency.  Is the sales process more complex than it needs to be?  Can someone simplify the selling and the delivery and beat you to the punch?

Eating the Sacred Cow

Diving into your financials will provide you insight … warts and all, into the health of your company.  Obviously, we need to know where the money comes from, where it goes, and how much of it remains. We’re taking a deep dive, so remember to identify where sales and profits are highest in terms of specific products and services. And don’t hide a service or product that’s not performing – transparency is the watchword of the day, and lack of it could cost you dearly.  Underperforming parts of your business will not fix themselves and will slowly eat away at your value.

Who’s in Charge?

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