Sunday, February 19, 2006

About Customers?

The question of which product/market to choose is answered by identifying specific strategic criteria and then applying an evaluation of these criteria uniformly across all products/markets within the matrix. Typical criteria include:
* Market size * Market growth rate * Competitive intensity * Margins within the product/market * Market share * Downstream product/service revenues
First, eliminate all non-viable cells where selling a product or service to a specific segment makes little sense. For example, selling home mortgages to retired customers is probably not a viable opportunity. Next, evaluate the remaining cells in terms of the strategic criteria. The best opportunities are those cells that have the best scores on the various criteria. This may mean that, out of a 4x5 matrix (20 potential opportunities), the best opportunities are found within four or five cells.
Does that mean that the organization will no longer serve the other products/markets? No. But the matrix does indicate areas where the organization will not actively invest and therefore will not expend Six Sigma resources. This is where the alignment of Six Sigma and organizational strategy takes place.
Once the products/markets are chosen, the organization must select which voice of the customer to listen to and which will drive Six Sigma projects.


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