Strategize: Product Strategy and Product Roadmap Practices for the Digital Age

by Roman Pichler

Addressing all three segments at the same time would be overwhelming. It’s therefore a good idea to choose one of them. But which one should I pick? To select the right segment, evaluate the different groups and opt for the most promising one. A great tool to do this is the GE/McKinsey matrix (Coyne 2008). While the matrix was originally developed to assess a business portfolio, it can also be applied to market segments. It encourages you to assess your segments according to their attractiveness and the strength of your business, as Figure 18 shows. FIGURE 18: GE/McKinsey Matrix The GE/McKinsey matrix states the attractiveness of the market segment on the vertical axis, and the strength of the business on the horizontal one. It ranks five sample segments according to the two dimensions. The most promising one is S4: it is fairly attractive, and the business has the ability to serve it. S1 and S2 are more attractive than S4, but the business strength is significantly lower. The remaining two segments are less attractive. While the matrix offers a great way to evaluate the segments, the devil is in the details. The effectiveness of the matrix depends on your ability to define what attractiveness and business strength mean. Several criteria may be used to determine how attractive a segment is, including the following: •Need: How strong is the need, and how much does the group benefit from the product? •Segment size: How big is it? •Growth rate: Does it...