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Chapter 1. Franchising as Entrepreneursh... > Opportunity Recognition: Market Stru...

Opportunity Recognition: Market Structure and Competition

Now that you have an idea who your target customers are, ask who currently serves them. Identifying your competitors and their relative strengths helps you define the overall market structure. The market structure that usually provides the most fertile ground for the entrepreneur is fragmented or emerging. A fragmented market provides the opportunity to consolidate the market around a brand—that is, to provide the consumer with a product or service defined by a positive price–value relationship embodied in a trademark or brand. Jiffy Lube provides an example of this. Before the quick-lube industry was born, preventive maintenance for an automobile was ill-defined by providers and not well understood by consumers. The company’s goal is to redefine preventive car maintenance as a “Jiffy Lube.”

The other attractive market structure for an entrepreneur is one that is emerging. The aging population has created an emerging market in health care, for instance. Although some companies have been more successful than others, this emerging market has attracted a number of franchised medical clinics, vitamin retailers, assisted-living centers, and other health-care product and service companies, all seeking to ride a national or international tide of growing demand.


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