The Crosby Insight

In the world of marketing, the second law of marketing is “The Law of Category. If you cannot be first in a category, set up a new category you can be first in.” This law emphasizes the importance of creating new categories that can be dominated by a company rather than trying to compete in an already established market. This concept has been applied in various industries, such as beer, computers, and soft drinks.

When analyzing the market share for opportunity, the most well-known methodological tool available for analyzing corporate portfolios using the matrix approach is the Boston Consulting Group Matrix. This model is like the Ansoff Growth Matrix and is very useful in understanding your portfolio profitability.

This blog entry supports the argument that companies like Netflix have generated increased sales by creating a category within a market with a high market share and low sales growth rate. Netflix, a mail-order DVD rental service, was initially a question mark in the online video streaming market. However, Netflix created a new category specific to movies and TV shows, increasing Netflix subscriber sales.

Netflix has identified strategies to compartmentalize the business and move on to new opportunities. The global market for Netflix presents a lucrative opportunity, and the company continues to expand into new countries. Netflix strategically chooses markets based on proximity to major markets, psychological distance, or perceived market distinctions.

This started in 2010 with Netflix launching in Canada. Netflix was already present in the Canadian market by being close to the United States geographically and culturally. This model of utilizing markets close to each other allows Netflix to assume an emerging market is present. As the demand in a country grows, Netflix then uses a data-informed decision to invest in content creation in those countries or a similar nation.

Netflix’s investments in Poland and Turkey are perfect examples of this model. Six months after entering Poland and Turkey in 2016, Netflix added dubbing, subtitles, and local language interfaces. Netflix has mastered content-based marketing.

In developing nations without reliable broadband internet access, Netflix replicates the question mark model across the entire product. Netflix has acknowledged the lack of internet access and began focusing on where the internet is in these countries. The Internet is primarily accessed through mobile devices in these countries. Netflix has been improving cellular network streaming, user interface, login, and authentication on mobile devices.

How could this be translated into an opportunity for an independent medical group or even a non-profit Federally Qualified health center (FQHC)? One possible idea could be to apply the concept of creating new categories to the healthcare industry. By identifying unmet needs or gaps in the market, healthcare organizations could create new categories that they can dominate rather than trying to compete in established markets. For example, an independent medical group could create a new remote patient monitoring service category that combines paper-based communication with modern technology. This could help the organization to differentiate itself from competitors and potentially attract new patients.

Another example of an FQHC creating a new category of specialty services could be offering telemedicine services for behavioral health. With the growing demand for mental health services, FQHCs can differentiate themselves by providing convenient and accessible behavioral health services through telemedicine. Using technology, FQHCs could expand their reach to underserved communities and improve patient outcomes. This would allow them to dominate a new category in the healthcare market and attract new patients. Most importantly, the provider growth should be effortless. The FQHC can offer debt forgiveness for student loans and a flexible working environment.

These models driving innovation could significantly impact health equity by encouraging independent medical groups and FQHCs to identify unmet needs in the healthcare industry and create new categories to dominate in those areas. By doing so, these organizations can differentiate themselves from competitors and potentially attract new patients, especially those who are underserved or have limited access to healthcare. Additionally, offering telemedicine services and remote patient monitoring can improve access to care and reduce healthcare disparities, ultimately leading to better health outcomes for all patients. By embracing innovation and adapting to changing healthcare needs, these organizations can help promote health equity and improve the overall health of their communities.

Netflix has found a way to manage its entrance into foreign markets by strategically choosing markets and using data-informed decisions to invest in content creation. By understanding the importance of creating new categories, Netflix has dominated the movie and TV streaming market. The healthcare industry is primed with big data to inform these decisions. It will be interesting to see how companies approach future growth and possibly find new markets.