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An
effective vertical market strategy can result in building
long-term customer relationships and driving business development.
But the selection of the right vertical markets could mean
the difference between growth and decline for many vendors.
Different business issues, technology drivers, economic environments,
and IT sophistication influence each vertical industry's
adoption of technology.
As
you begin or continue to build your vertical market
strategy, consider the following critical
business issues to determine
the greatest opportunities:
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What
are the leading business trends and technology
drivers?
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What
are the major buying centers for IT solutions?
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What
are the IT spending patterns today and the predictions
for growth in the next three to five years?
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What
are the leading IT solutions? What is the market
outlook for your specific IT products and services?
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What
are the key user selection criteria for IT products
and services?
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What
are the key business processes to target, and
how are other vendors targeting these opportunities?
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What
are the key trends in channel and partner strategies
for each vertical market?
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How
will emerging business models within the vertical
industries impact the competitive landscape in
the next five years?
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Which
emerging technologies will impact this vertical
market in the next two to four years?
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How
can you differentiate yourself in terms of market
strategies, offerings, best practices, and competitive
positioning?
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There
are many good reasons to go vertical, but don't
overlook the risks of pursuing these market opportunities.
When establishing, growing and developing your vertical
industry practices, Gartner recommends that you:
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Evaluate
how a vertical market strategy is right for you
and where it is valuable. A vertical market strategy
is not an all-or-nothing proposition.
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Develop
deep industry business and technical expertise
to determine market needs, identify gaps, and
assess your internal capabilities to fill those
gaps.
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Continuously
evaluate the effectiveness of your vertical market
strategy.
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Don't
be afraid to exit poorly fitting markets or ones
that have passed their time as significant growth
opportunities.
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Focusing
on the right vertical markets can be the single greatest
opportunity, but it can also be one of the largest cost
contributors when continuing to focus on vertical markets
that are not a good fit.
What
industries are hot and what's
not in the midmarket? Find out at Midsize
Enterprise Summit where we embrace midmarket-specific
issues, trends and solutions from a horizontal and vertical
industry-specific perspective.
Reference
Research Brief
Growing Vertically: The Opportunities and Risks
Publication Date: December 4, 2002
Authors: Geraldine Cruz, Susan Cournoyer, Robert Goodwin, Venecia Liu,
Cynthia Moore, Jeff Roster, Rishi Sood
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