Mullins’ Seven Domains Model – A Study

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An Introduction

When an individual purchases something, she looks at it from all possible perspectives. This way, she makes sure that she has made the right choice. The same kind of attitude is applicable when an entrepreneur launches a new business venture. Unless the entrepreneur assesses the business from all possible angles she will not know what hit her when the time of crisis arrives. In this article, we will discuss about Mullins' Seven Domains Model, which explains strategy tools and strategic opportunities that a business woman should utilize to ensure that she is prepared to face challenges in business.

Origin of Mullins' Seven Domains Model

The framework came into being when John Mullins, an entrepreneur wrote about the Seven Domain Model in his book The New Business Road Test."

An Idea of Mullins' Seven Domains Model

Mullins' Seven Domains Model helps in understanding the influence of 7 major factors or domains that are responsible for the successful turnout of a business.

According to the model, a new business venture can be divided into 7 domains. Four of them look at the micro (small-scale) and macro (large-scale) faces of the market and industry, while three of them are concerned about the team that works in the company.

The seven domains are as follows.

Market Domains

  • Benefits and attractiveness at the micro level
  • Market attractiveness addressing macro level

Industry Domains

  • Sustainable Advantage at the micro level
  • Industry attractiveness at the macro level

Team Domains

  • Aspirations, mission and propensity for risk
  • Ability to execute on critical success factors
  • Connectedness up, down and across value chain

Here is a Detailed Discussion on the 7 Domains

# Benefits and attractiveness at the micro level

It is not possible for a business to meet the needs of every kind of customer. A venture can be more successful if it targets a particular market segment. The following questions will help to identify market attractiveness of the business at the micro level.

  • How is the business unique from other ventures catering to the same segment?
  • What are the relevant trends in the chosen segment? Is the segment rising, and if yes, is it going to continue?
  • If the business is successful in this segment, what are the other segments the business can try after this?

The manager should do a research and look at the qualitative and quantitative data. For this, she should talk to potential customers and get hold of feedback from them. She also needs to find out about the performance of the competitors in that segment. She should read reports by analysts to learn more about the new segment the product or service will target.

# Market attractiveness addressing macro level

This domain is concerned about market attractiveness from a macro point of view. The following questions are going to help identifying the market attractiveness in the macro segment.

  • What kind of business does the entrepreneur want to establish? Is the business going to be small or huge? A high profile business with a big size needs a venture capital while a small lifestyle operation needs less capital.
  • What is the size of the market?
  • What is the speed at which the market can grow?
  • How much can it grow in the next few years?
  • The manager should do a PEST analysis and determine the external factors that can affect the business.

# Industry attractiveness at the micro level

The following question will help in understanding industry attractiveness of the business at the micro level.

  • Can the business implement high level organizational procedures or resources that others cannot imitate?
  • Does the business have enough economic strength?
  • Will the revenue of the business agree to the capital invested?
  • Will the business enjoy enough profits against the capital invested?
  • What will be the cost to attract customers?
  • How much time does the business need to attract customers?
  • How much amount should be attached to the working capital and for what period of time?
  • When will the company pay the employees and suppliers?

# Industry attractiveness at the macro level

To understand the level of attractiveness an industry has at the macro level, Mullins suggested the implementation of Porter's Five Forces.

For this reason, a company has to define the industry in which it is about to compete. The threat of competitors is an important factor to decide if a business can succeed or not. After this, she should notice the rivalry among companies, which makes some rivals sell duplicate ideas at cheap rates. This demonstrates the threat of substitution. The manager should then look at the bargaining power of suppliers and buyers. She has to ponder the importance of new entrants in the market.

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# Aspirations, mission and propensity for risk

The questions that are going to underline the aspirations and commitment of the employees are as follows.

  • Why does the entrepreneur want to establish the business?
  • What are the personal values of the entrepreneur?
  • Does the new venture agree with the personal values of the entrepreneur?
  • Is the entrepreneur ready to take the risk?
  • Are the employees in the company rightly motivated?

# Ability to execute on critical success factors

  • What are the few critical success factors in the industry?
  • How can she prove that the critical success factors have been correctly identified?
  • Does the entrepreneur know what critical success factors her company cannot meet?

# Connectedness up, down and across value chain

The last domain speaks about the connections that an entrepreneur needs to have in order to ensure a successful business venture.

  • Has the entrepreneur been able to identify the responsible and reliable suppliers for her business?
  • What is the relationship of the entrepreneur with the suppliers?
  • How can she make use of her relationship with distributers and customers?

Does the value chain inform about any competitor whom she knows on a personal level? If yes, can the relationship shared by the two have an effect on the business? Could these two people become partners?

To Wrap Up

From this article, it can be concluded that Mullins’ Seven Domains Model can help an entrepreneur in realizing the issues that she might face when starting a new business venture. The seven domains deal with market and industry attractiveness at the micro plus macro level. It also explains the commitment of the business owner & her employees, capability to execute on critical success factors and the relationship that the entrepreneur maintains with other factors in the value chain.

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