7 areas of opportunity in business
You probably would not have bought a car without testing it, or a house, without first examining every square meter in it. In our daily life, the behavior is completely normal for us, in which we view the product from different points of view before we buy it – it helps to make the right choice. The same goes for starting a business or project. We must carefully examine all aspects, because otherwise we will have to pay with our time and money. The seven Mullins area model will help you explore the seven key factors that influence the success of a business or a new idea.
About the model
The model was developed by entrepreneur John Mullins and in 2003 published it in his book “The New Business Road Test”. It is written for aspiring entrepreneurs, but you can use it to launch any new projects.
The model must be used before the business plan is ready. It consists of seven areas. When you review each one individually and answer key questions, you will have a clear idea of whether your business will become successful. You can also guess what difficulties you will encounter and be able to take the necessary actions.
Seven areas of opportunity
1. Market area / Macro level: market attractiveness
This area considers the attractiveness of the market from the macro level, that is, allows you to see the big picture.
Look at the whole market.
How big is it in terms of the number of consumers, sales and the number of units sold?
Explore trends within this market. Has he grown up in recent years?
If so, is there a tendency for further growth?
It is very important to make sure that the market is large enough to allow you to grow. In the end, more likely that you will succeed in the growing market.
Use the PEST model to investigate factors affecting the market.
2. Market area / Micro level: advantages and attractiveness of the market sector
It is unlikely that all consumers will enjoy your product, so focus on one sector of the market.
To identify this segment, look at the micro level of your market. Consider the following questions:
Which segment of the entire market is the most attractive for your product?
How is your product different from the ones on the market?
What are the trends in this segment? Is it growing, and if so, is there a tendency for further growth?
If you succeed in this segment, which other market segment will you want to access?
3. Industry Area / Macro Level: Industry Attractiveness
Now we should pay attention to the whole industry from the position of the macro level. Identify other industries that compete with yours and ask yourself how easy it will be to enter it. If this is so, then there is the other side of the coin – your potential competitors will follow your example.
Answer the following questions:
Do you compete honestly or dishonestly?
Do companies steal ideas from others?
Collect all the information about your competitors and analyze their activities.
Pay attention to consumers and suppliers. What is the income level of your potential customers? Do suppliers set their own terms?
4. Industry / Micro Level: Sustainable Advantage
It’s time to look at your industry in detail. Think about what kind of knowledge and technology you need in order to maintain a competitive advantage.
How easily can your competitors duplicate your products? What resources do you have, and your competitors are not? And what you do not have unlike them? It can be patents, finance, streamlined production.
5. Area of team: mission, aspirations, addictions, risk
Ask yourself why you started your business. Did you get the idea? Why? What do you want to achieve with your business – do you have ambitious plans or just your lifestyle? Some entrepreneurs just like to be the owners of bakeries, they live by it and do not want to expand it. Do your personal goals and values match the goals and values of your company? Are you ready to take full responsibility and hard work on your goal?
Think about the motivation of your team. What does she hope for and why? Does their motivation match yours? Have you prepared them psychologically for hard work?
6. Team scope: ability to follow critical success factors.
Answer the following questions:
What decisions and activities will greatly harm your business if you make mistakes in them?
What decisions and activities can make a significant profit if they are executed correctly?
Think about the skills and abilities of your team. Are you sure that your team is able to do its job effectively? Are there any gaps in their knowledge?
7. Team scope: connectedness, incoherence throughout the value chain
Think about suppliers and investors.