Evaluating Market Segments

In evaluating different market segments, the firm must look at two factors: (1) the segment's overall attractiveness, and (2) the company's objectives and resources. First, the firm must ask whether a potential segment has the characteristics that make it generally attractive, such as size, growth, profitability, scale economies, and low risk.

Second, the firm must consider whether investing in the segment makes sense given the firm's objectives and resources. Some attractive segments could be dismissed because they do not mesh with the company's long-run objectives; some should be dismissed if the company lacks one or more of the competences needed to offer superior value.

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