New Markets

Question 1

New mkts definition

Answer 1

A market that has emerged recently (maybe several years ago). Is the opposite to a mature market that has been around for a while

Question 2

General examples of new markets

Answer 2

Meal kit delivery services, telehealth, electric cars, drones

Question 3

New mkt characteristics

Answer 3

• high growth rate (likely dble digit numbers)
• attractive market with likely many new entrants (esp. if barriers to entry are low)
• competitive landscape is likely to change dynamically
• players are likely to invest heavily in marketing to grow sales rapidly (with the mkt) and operations (to support rapid growth)
• typical profitability is quite low or negative given most players aggressively investing in marketing and growth

Question 4

New mkt example: video streaming service (competitor or Netflix/Hulu) has hired us to increase their revenues

Answer 4

Video streaming service industry:
- emerged fairly recently suggesting high growth rate
- rapid growth and large size attract new players
- streaming service companies are likely to invest aggressively in marketing to keep up with high growth rate of the market and gain mkt share
- typical profitability might be low or negative