An attractive market may be large, fast-growing, and characterized by clear demand and significant profit potential. However, for a business, these indicators alone are not enough to conclude that it is the right market to enter. The more critical question is: does the business have the capability to succeed in that market?
The more attractive a market is, the more people want to enter it.
A market growing at 20% annually is certainly more appealing than one that is stagnating.
Large scale is more attractive than small scale, and rising demand is more appealing than declining demand.
However, these very attributes also attract a multitude of competitors.
When a market is perceived as lucrative, a business is not the only one to spot the opportunity. Existing competitors may ramp up investment, new players may enter, and major brands might leverage superior resources—causing competition to quickly intensify.
Therefore, market size does not equate to the share of opportunity a business can actually capture.
A market worth trillions of dong sounds impressive. However, if there are dozens of strong competitors, high customer acquisition costs, and no clear point of differentiation, the actual market share a business can capture may be very small.
This is why a business should not simply ask: “How big is this market?”
It must also ask: “Where do we have a chance to win in this market?”
Market opportunities and business opportunities are two different things.
A market might be excellent for Company A but unsuitable for Company B.
Take the online retail market, for instance; it is vast and offers significant growth potential. However, a new business cannot simply look at that scale and decide to enter the market.
A business needs to identify its specific advantages: better sourcing, lower costs, a stronger brand, superior operational capabilities, or a unique customer base.
Without an answer to this, the business is merely assessing the market’s attractiveness rather than evaluating its own competitiveness.
This is a crucial distinction.
Strategy is not about finding the best market.
Strategy is about finding a market where the business can establish a strong position..
A large market with low profit margins can still be a trap.
High revenue often looks attractive to businesses.
However, revenue is not profit.
A market with high demand but price-sensitive customers can generate substantial sales volume while yielding low profits. If a business is forced to constantly lower prices and spend heavily on advertising and customer retention, a larger scale may simply mean a greater drain on resources.
This is particularly true in markets where products are easily compared, making them highly susceptible to price wars.
When customers can instantly compare options and prices, it is difficult for a business to maintain high price points without a compelling reason.
Therefore, before entering a market, businesses need to look beyond mere scale:
Are customers willing to pay?
Is the price point sufficient to generate profit?
What is the cost of acquiring a new customer?
How long can the business retain customers?
If the numbers don’t add up, a larger market isn’t necessarily worth entering.
Don’t Confuse Growth with Profitability
A rapidly growing market often creates a sense of urgency to “get in immediately.”
However, market growth does not mean that every business within that market is growing.
A market might expand by 30%, yet the lion’s share of that growth goes to just a few leading companies.
This often happens when market leaders possess strong brands, extensive distribution networks, valuable customer data, or cost advantages that are difficult for newcomers to match.
In such cases, the market continues to expand, yet the window of opportunity for new entrants remains very narrow.
Late entrants may have to incur high costs to win over individual customers, whereas market leaders already possess scale and established advantages.
Therefore, a more valuable question than “How much is the market growing?” is: “Who is capturing the lion’s share of that growth, and why?”
Understanding the answer allows a business to see genuine opportunities rather than just an attractive figure.
A promising market does not necessarily align with current resources.
A business might spot a massive opportunity yet lack the capacity to capitalize on it.
Entering a new market may require substantial capital, a new team, new technology, a new distribution network, or a long period to build brand recognition.
If the investment exceeds financial capabilities or entails an excessively long payback period, that opportunity could become a burden.
This is a crucial point for small and medium-sized enterprises (SMEs) to consider carefully.
Not every opportunity needs to be seized.
Some markets are highly attractive but simply not right for the business at the present time.
An opportunity that is otherwise sound can still be a wrong decision if the timing is off..
The most important question is: “Where can we win?”
Before entering an attractive market, a business should clearly define the position it aims to occupy.
There is no need to be the biggest player.
There is no need to serve every single customer.
Nor is it necessary to compete head-to-head with the market leader.
The key is to identify a market segment where the business can create greater value than its competitors.
This could be a specific customer group, an underserved need, a geographic region, a particular price point, or a unique service model.
Once the scope is clearly defined, the competitive landscape becomes much more realistic.
After all, a vast market often encompasses multiple distinct “games.” A business does not need to win the entire market; it simply needs to find the specific game it is capable of winning.
Don’t choose a market simply because others are making money there.
One of the reasons businesses enter new markets is seeing the success of others:
Competitors are growing.
An emerging brand is raising capital.
An industry is constantly in the media spotlight.
A specific product line is selling exceptionally well.
However, the success of others is no guarantee that your business will succeed as well.
They may possess advantages that you lack. They might have entered the market earlier. They may hold data, brand recognition, technology, or relationships that you do not yet possess.
Therefore, instead of asking, “How did they do it?”, a business needs to ask: “Do we possess the advantage that enabled them to win?”
If not, simply copying their move might mean chasing a game where you lack a competitive edge.
A market worth entering is where opportunity meets capability.
An attractive market is certainly important, but that is only half the equation.
The other half is the business itself.
A market worth pursuing typically lies at the intersection of three factors: sufficient demand, profitability, and the business’s competitive capability.
Without demand, there is no market.
Demand without profitability results in a mere race for revenue.
Even with a profitable market, if the business lacks competitiveness, the opportunity will go to someone else.
Therefore, before deciding to enter a new market, do not simply ask, “Is this market attractive?”
Ask a tougher question: “Is this a market where we can win?”
Because in business, not every good opportunity is the right opportunity for you.
