Marketing Strategy and Competitive Positioning pdf ebook

Barriers to exit
Conversely, markets with high exit barriers, where companies can become locked into unten-
able or uneconomic positions, are intrinsically unattractive. Some new target opportuni-
ties, for example, may have substantial investment hurdles (barriers to entry) that, once 

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DETERMINING MARKET SEGMENT ATTRACTIVENESS
undertaken, lock the company into continuing to use the facilities created. In other markets, 
powerful customers may demand a full range of products/services as the cost of maintaining 
their business in more lucrative sectors. When moving into high-risk new target markets, a 
major consideration should be exit strategy in the event that the position becomes untenable.
Bargaining power of suppliers
The supply of raw materials and other factor inputs to enable the creation of suitable prod-
ucts and services must also be considered. Markets where the suppliers have monopoly or 
near-monopoly power are less attractive than those served by many competing suppliers 
(see Porter, 1980).
Level of technology utilisation
Use and level of technology affects attractiveness of targets differently for different com-
petitors. The more technologically advanced will be attracted to markets that utilise their 
expertise more fully and where that can be used as a barrier to other company entry. For 
the less technologically advanced, with skills and strengths in other areas such as people, 
markets with a lower use of technology may be more appropriate.
Investment required
Size of investment required, financial and other commitments, will also affect attractiveness 
of market and could dictate that many market targets are practically unattainable for some 
companies. Investment requirements can form a barrier to entry that protects incumbents 
while deterring entrants.