Alignment with customer needs

Understand the mutual relationship between customers and market spaces. Customer s can contain one or more market spaces. Market spaces can contain one or more customers (Figure 4.27).

• The market spaces of Type I service provider s are internal to the organizational unit within which they are embedded.
• The market spaces of Type II providers are internal to the enterprise but distributed across the constituent business unit s and the corporate function s.
• The market spaces of Type III providers are typically distributed across more than one enterprise customer.

Figure 4.27 Customers and market spaces

The business strategy of a service provider usually determines the placement of market spaces. However, the placement of market space s also influences the type of strategies to be pursued. This mutual influence will lead to adjustments and changes over any given planning horizon (Figure 4.28). Since market spaces are defined based on outcomes desired by customers, the changes and adjustments are ultimately based on the dynamics of the customer’s business environment. Over time there will be cohesiveness between strategies and market spaces from mutual alignment and reinforcement.

Figure 4.28 Strategies and market spaces

Since market spaces are defined in terms of the business needs of customers, service provider strategies are therefore aligned to customers. This is the most important reason why service providers must think in terms of market spaces and not simply industry sectors, geographies, or technology platforms. This is intuitive to the senior leadership of Type I providers because they are accustomed to being driven more by the outcomes expected by their business unit s than by the traditional segmentation of markets.

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