Description
John Mullins’ Seven Domain Model
Opportunity Evaluation Framework
JOHN MULLINS’ 7 DOMAIN MODEL
It is based on seven domains:
1) Market attractiveness and micro level 2) Target segment benefits and attractiveness; Industry domain that addresses macro level 3) Industry attractiveness and micro level 4) Sustainable advantage; Team domain comprising three sub-domains5) Mission, aspirations, propensity for risk, 6) Ability to execute on Critical Success Factors and 7) Connectedness up, down and across value chain.
1.
Micro level market assessment: a) Micro level questions about target markets 1. Is there a target market segment where we might enter the market in which we offer the customer clear and compelling benefits, at a price he or she is willing to pay?
2. Are these benefits, in the customer’s minds, different from and superior in some way – better, faster, cheaper or whatever – to what’s currently offered by other solutions? 3. How large is this segment, and how fast is
b) Three ways to define market segments 1. Who the customers are i.e demographic terms (age, gender, education, income etc) if it is business to business, then it will refer to the industry in which the customers do business, plus firm size and firm characteristics. 2. Where the customers are in geographical terms? 3. By how the customers behave (life style terms) or in business to business how the products may be used.
The macro market test 1. What sort of business is sought? One with potential to become a huge business, or a small lifestyle operation? 2. How large is the market? 3. How fast can it grow?
4. How quickly can it grown in the next six months or two/three/five years?
5. What economic, demographic, socio cultural, technological, regulatory or natural trends can be identified and how will it affect the business?
Michael Porter’s five forces
Questions to ask
Threat of Entry Is it difficult for companies to enter this industry? Supplier power Do suppliers to this industry have the power to set terms and conditions?
Buyer power Do buyers have the power to set terms and conditions?
Threat to substitutes Is it easy or difficult for substitute products to steal the market? Competitive Rivalry Is competitive rivalry intense or genteel?
b) The Macro Industry test: 1. What industry will you compete in? Define it carefully. 2. Based on all five forces, what is your overall assessment of this industry? Just how attractive or unattractive is it? 3. If your industry is a poor performer overall, are there persuasive reasons why you will fare differently?
Micro-level industry assessment: The Micro industry test: 1. Do you require proprietary elements - patents, trade secrets and so on – that other firms cannot likely duplicate or imitate?
2. Can your business develop and employ superior organizational processes, capabilities or resources that others would have difficulty in duplicating or imitating? 3. Is your business model economically viable i.e. can you show that your company won’t run out of cash quickly?
risk propensity test for entrepreneurs:
What sorts of risk are you and are you not willing to take: o Will you risk a secure salary and the things that go along with your current employment? For how long? o Will you risk losing control of your business? o Will you put your own money at risk? How much? o Will you risk your home or time with your family or loved ones?
o Do those you love accept the risks you will take?
“The can you and your team execute?” test
What are the few - only a handful, please – critical success factors (CSFs) in your industry? What support can you provide to show that you’ve identified them correctly? Can you demonstrate - in past deeds, not mere words – that your team taken together can execute on each and every one of these CSFs? Alternatively, have you identified which CSFs your team is not well prepared to meet, for which you need help in filling out your team?
The Connectedness test
Who do you and your team know about the value chain in the companies that are likely suppliers to your proposed business and to your competitors? Who do you and your team know down the valuechain among customers you will target, both today and tomorrow? Names, titles and contact info, please. Who do you and your team know across the valuechain among your competitors and substitutes? Names, titles and contact info, please.
doc_755850183.pptx
John Mullins’ Seven Domain Model
Opportunity Evaluation Framework
JOHN MULLINS’ 7 DOMAIN MODEL
It is based on seven domains:
1) Market attractiveness and micro level 2) Target segment benefits and attractiveness; Industry domain that addresses macro level 3) Industry attractiveness and micro level 4) Sustainable advantage; Team domain comprising three sub-domains5) Mission, aspirations, propensity for risk, 6) Ability to execute on Critical Success Factors and 7) Connectedness up, down and across value chain.
1.
Micro level market assessment: a) Micro level questions about target markets 1. Is there a target market segment where we might enter the market in which we offer the customer clear and compelling benefits, at a price he or she is willing to pay?
2. Are these benefits, in the customer’s minds, different from and superior in some way – better, faster, cheaper or whatever – to what’s currently offered by other solutions? 3. How large is this segment, and how fast is
b) Three ways to define market segments 1. Who the customers are i.e demographic terms (age, gender, education, income etc) if it is business to business, then it will refer to the industry in which the customers do business, plus firm size and firm characteristics. 2. Where the customers are in geographical terms? 3. By how the customers behave (life style terms) or in business to business how the products may be used.
The macro market test 1. What sort of business is sought? One with potential to become a huge business, or a small lifestyle operation? 2. How large is the market? 3. How fast can it grow?
4. How quickly can it grown in the next six months or two/three/five years?
5. What economic, demographic, socio cultural, technological, regulatory or natural trends can be identified and how will it affect the business?
Michael Porter’s five forces
Questions to ask
Threat of Entry Is it difficult for companies to enter this industry? Supplier power Do suppliers to this industry have the power to set terms and conditions?
Buyer power Do buyers have the power to set terms and conditions?
Threat to substitutes Is it easy or difficult for substitute products to steal the market? Competitive Rivalry Is competitive rivalry intense or genteel?
b) The Macro Industry test: 1. What industry will you compete in? Define it carefully. 2. Based on all five forces, what is your overall assessment of this industry? Just how attractive or unattractive is it? 3. If your industry is a poor performer overall, are there persuasive reasons why you will fare differently?
Micro-level industry assessment: The Micro industry test: 1. Do you require proprietary elements - patents, trade secrets and so on – that other firms cannot likely duplicate or imitate?
2. Can your business develop and employ superior organizational processes, capabilities or resources that others would have difficulty in duplicating or imitating? 3. Is your business model economically viable i.e. can you show that your company won’t run out of cash quickly?
risk propensity test for entrepreneurs:
What sorts of risk are you and are you not willing to take: o Will you risk a secure salary and the things that go along with your current employment? For how long? o Will you risk losing control of your business? o Will you put your own money at risk? How much? o Will you risk your home or time with your family or loved ones?
o Do those you love accept the risks you will take?
“The can you and your team execute?” test
What are the few - only a handful, please – critical success factors (CSFs) in your industry? What support can you provide to show that you’ve identified them correctly? Can you demonstrate - in past deeds, not mere words – that your team taken together can execute on each and every one of these CSFs? Alternatively, have you identified which CSFs your team is not well prepared to meet, for which you need help in filling out your team?
The Connectedness test
Who do you and your team know about the value chain in the companies that are likely suppliers to your proposed business and to your competitors? Who do you and your team know down the valuechain among customers you will target, both today and tomorrow? Names, titles and contact info, please. Who do you and your team know across the valuechain among your competitors and substitutes? Names, titles and contact info, please.
doc_755850183.pptx