Step by Step Guide to Conducting an Effective Market Opportunity Analysis
Business growth strategies include the evaluation and assessment of new markets and products lines or suggesting new ways to reach existing markets and better meet the needs of customers. In today’s business environment, sustaining growth is a major challenge for companies. Scientific and technological advances shorten the life cycle of products and services, changing business […]
Business growth strategies include the evaluation and assessment of new markets and products lines or suggesting new ways to reach existing markets and better meet the needs of customers. In today’s business environment, sustaining growth is a major challenge for companies. Scientific and technological advances shorten the life cycle of products and services, changing business models and giving the scope to new competitors to enter the market. This constant instability makes it important for every market player to seek new business opportunities. But the question that arises here is how to do market opportunity analysis in such conditions?
The first thing you need to do is, define a framework to help search for opportunities. To do this, it is important to understand the business direction of your company and to have knowledge of the strengths, resources, and capabilities of your company. Once you develop a comprehensive understanding of your company goals and areas of expertise, the next step involves analyzing the market and assessing the needs of your customers and how they are being met by companies. For an effective market opportunity analysis, it is necessary to evaluate the business model as a whole by identifying customers and companies and other factors such as direct and indirect competitors, brand value propositions, existing regulations, supply chains, and the general business environment. In this article, we have examined how to analyze these factors in detail:
Steps to strengthen your market opportunity analysis
Identify your customer segments
To understand the demands of your customers, it is important to identify customer segments that share common characteristics. These characteristics include gender, age, educational level, place of residence, occupation, income level, lifestyle, interest, attitude, values, and motivations behind purchasing. The analysis of these characteristics can help estimate the number of potential customers a business can have. These can also help in identifying motivations that lead to purchasing decisions including prestige, price, durability, convenience, and design. This can make your market opportunity analysis more result oriented and can help you identify areas where you can invest safely to yield better ROI.
Analyze their purchase situation
Purchase situations must also be examined for a better market opportunity analysis. There are a few questions that must be asked while reviewing purchase analysis such as:
- When do people purchase your product or service?
- Where do they make the purchase?
- What is the mode of payment?
Analyzing payment methods, distribution channels, and all other circumstances that involve purchasing decisions can help you understand how your customers buy and how you can position your products appropriately. Offering new alternatives for shopping may bring new customers and help you seek new business opportunities.
Analyze your competitors
Analyzing supply is as important as analyzing demand and purchasing situations. It is very important to know the existing players in the market where you are competing or going to compete. There are a few questions in this case that you must ask such as:
- What are the brands and products of your industry that are growing more remarkably and the reasons behind the growth?
- What is the value proposition of those brands and products?
- What are the competitive advantages you can have over them?
Examining substitute industries is equally important for market opportunity analysis. It helps to gain a competitive edge over the indirect competitors and offers insights into additional opportunities for growth and provides new business opportunities.