You may already be the dominant player in your core market or find that incremental growth has become much harder.  You’re looking to nearby or maybe even more distant markets (in product/service focus and geography) that promise to help you grow.

Ask yourself:

Why are you looking for a new market?  Is a competitor threatening your core market or making it obsolete?  Are you trying to create a new focus for customers or investors because of deficiencies in your core market? If so, what does this say about your core business or capabilities? Instead of a new pursuit, should they get more attention?

Is this market adjacent to your current market?  Can you leverage core capabilities to secure a dominant, sustainably profitable position? Have you ever done this before, and can you rely on organizational precedent and institutional memory to guide your actions?

If the market isn’t adjacent, what capabilities can you deploy in a new space? Will customers, investors, and the public accept your presence in this market without damaging your brand equity?

What do the data suggest about the market’s maturity? If it’s in the early days, are you prepared to invest heavily and preemptively to obtain first-mover advantage? Is doing so realistic? If you’re more comfortable as a fast follower, how will you know when market conditions are right for you to enter?

What are the opportunity costs? Can you capture the adjacent market without stealing from your current market or foreclosing other growth opportunities? Have you explored alternative uses of capital or retained earnings? Given all hard and soft costs, is the marginal dollar value of this new market greater than your current market?

Will this opportunity grow in ways you can exploit? To what extent can you scale your management capabilities and business architecture, including technologies and information management capacity, to meet market demand?