Sample frameDay 192·Marketing · Locate

Three questions define a business. Most companies have only ever answered two of them.

Marketing.

The Served Market

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The question

Between the customer groups you already reach, the needs you already understand and the ways you already deliver, how many combinations have you simply never put in front of anyone? Count them before you go looking for a new market.

The idea

Derek Abell taught at Harvard Business School and later at IMD in Lausanne, and in 1980 he published Defining the Business: The Starting Point of Strategic Planning. Levitt had argued that a business definition decides everything and then left the drawing of one to your judgement. Abell gave it axes. Any business, he argued, sits somewhere in a three-dimensional space: customer groups, meaning who you serve; customer functions, meaning which need you serve for them; and alternative technologies, meaning how the need gets met. Move along any one of the three and you're in a different business, whatever the sign above the door still says. Two things fall straight out of drawing it. The first is scope, which turns out to be a separate decision on each axis rather than one number for the whole business. The second is what people take the book for: once the grid exists, the cells you don't occupy become visible, including several where you already hold the customers and already hold the technology and have never joined them up. Growth arguments tend to start with a new market. The grid usually suggests a shorter walk.

The framework

01
Three axes — and the one that gets left off.
Most companies can describe their customer groups, and most can describe the need they meet. Almost nobody draws the third axis. Technology in Abell's sense isn't about software; it's the how, the means by which the need gets met. A tax problem can be handled by a firm of accountants, a software subscription, an offshore team, a feature embedded inside a bank, or a template somebody downloads on a Sunday. Those are five businesses serving one function, competing hard without appearing on each other's competitor list. Leave the axis off and you'll only see rivals who deliver the way you do.
02
Plot where you actually sell, not where the deck says you play.
Take last year's revenue and put it on the grid cell by cell: this customer group, buying this function, delivered this way, worth roughly this much. Use money rather than intent, and expect the result to be lopsided — most businesses find four or five cells carry almost everything, while several segments discussed weekly in meetings hold nearly nothing. Your served market is the set of cells you actually sell into today, which is rarely the market you describe to other people. The strategy conversation gets honest once both are on the same page.
03
Most white space is empty for a reason.
An unoccupied cell is only an opportunity if somebody wants what would fill it. Walk the empty cells and force each one into a category: nobody wants this, somebody already owns it and does it well, we couldn't deliver it with what we have, or nobody has bothered yet. Only the last is a real opening, and it's rarer than a workshop makes it look. The discipline here is the ruling-out rather than the listing — thirty possibilities on a page is a way of deciding nothing while feeling extremely productive about it.
04
Read the scope off each axis separately.
This is Abell's quieter contribution and the one worth taking away. Scope is set per axis, so a business can be deliberately broad on one and deliberately narrow on another: every customer group but a single function, or one narrow group served across everything it needs. Most strong positions are that combination rather than bigness everywhere, and the grid shows the shape in a way a market-size number never will. The directions you can then grow in you already have — Day 26's four quadrants name them, and Day 81 measures how far you can safely travel along any one.

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