Finding the Vacuum in Your Market
Innoblog, the blog of Harvard professor and author Clayton Christensen's organization Innosight, has an insightful post taking a closer look at Costco's recent decision to offer healthcare. Costco is offering a low-cost healthcare solution aimed at the 45 million individuals in the United States that currently lack health care. Is this a viable business option? While many factors need to be considered, there are two key points that suggest it may be a wise idea:
1. The 45 million individuals without health care do not have it because they cannot afford it. For most health care providers, targeting these low budget individuals simply is not profitable enough to warrant a substantive effort. This will make it an easier and less competitive market for Costco to target, since mainstream healthcare providers are more concerned with targeting the more lucrative higher end clients.
2. Costco is in the business of selling discounted products and services. The company has done a good job of associating the word "discount" with "Costco" in the minds of its clients. Accordingly, they are in a good position to promote this product to their user base.
Think about these issues for your own business. What products/services can you offer that are aimed at a "vacuum" -- a sizable market that your competitors do not find profitable enough to be worth the effort? Also, what is the brand image you are looking to establish with your company so that you can use it to sell more products/services to your existing user base?
1. The 45 million individuals without health care do not have it because they cannot afford it. For most health care providers, targeting these low budget individuals simply is not profitable enough to warrant a substantive effort. This will make it an easier and less competitive market for Costco to target, since mainstream healthcare providers are more concerned with targeting the more lucrative higher end clients.
2. Costco is in the business of selling discounted products and services. The company has done a good job of associating the word "discount" with "Costco" in the minds of its clients. Accordingly, they are in a good position to promote this product to their user base.
Think about these issues for your own business. What products/services can you offer that are aimed at a "vacuum" -- a sizable market that your competitors do not find profitable enough to be worth the effort? Also, what is the brand image you are looking to establish with your company so that you can use it to sell more products/services to your existing user base?
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