John Mullins is an entrepreneur and a professor at London Business School and in his published book “The New Business Road Test” he talks about the Seven Domains Model. The model was specially created for entrepreneurs wanting to start their own business for scratch as well as for established companies that want to expand their operations by introducing new products or services.
Mullin’s Seven Domains Model divides the proposed venture into seven domains. Four of them examine different aspects of your market and industry at a micro or macro level, while the other three look into your team. Each of the domains is further discussed below:
- Market Attractiveness: This domain looks at the size, growth, and potential of the entering market in order to assess its attractiveness on a macro level. Some examples may be the number and type of customers, sales value and current market trends. The PESTLE analysis can act as when assessing the attractiveness of the market.
- Industry Attractiveness: Similarly, this domain examines the attractiveness of the industry on a macro level. Here, it is suggested that you use Porter’s 5 Forces Model in order to evaluate the factors that are impacting the profitability. These are the bargaining power of suppliers, the bargaining power of buyers, the threat of substitutes, the threat of new entrants and the competitive rivalry.
- Sector Market Benefits and Attractiveness: This domain takes a micro-level approach and considers the segments that are likely to benefit from the new venture or product. You need to examine the current trends going on within the segment and evaluate any growth opportunities identified. What products are being offered and how your new offering will be perceived against competitors?
- Sustainable Advantage: Likewise, this domain looks into the micro-level in order to identify a way to build a Unique Selling Proposition based on your resources and core competencies. Think what resources and capabilities you have, and what the competition lacks, and thereafter assess whether these are going to give you a head start.
- Connectedness Up, Down, Across Value Chain: Moving on to the team domains, this one examines the relationships along the value chain among all people involved, ranging from suppliers and investors to customer and competition. Having a clear idea of how your stakeholders are inter-connected can act as a useful preventative measure for future conflicts.
- Ability to Execute on Critical Success Factors: Critical Success Factors can be defined as the necessary criteria to be met in order for a business to achieve its mission and objectives. Within this domain, you need to really think whether your team can deliver upon these CSFs. Take a look at the skills, knowledge, and experience of yourself and your team and subsequently identify the points you are strong and weak.
- Mission, Aspirations, Propensity for risk: Finally, this domain analyses the commitment and aspiration of the team and leadership. How passionate are you about starting up your own business? What is your mission and vision? What do you want to achieve? These are all sorts of questions you need to ask yourself and your team.