In this article we intend to offer our thoughts on the 5 keys to conducting a market opportunity analysis.
There are so many market opportunities and business ideas around, but most are not worth the effort. It’s essential to reduce your options and ensure that you focus on the ones with the best chances of success. But, looking at too many opportunities is dangerous because according to HBR, who suggested that as a team’s to do list grows, compared to its peers, the organisation’s revenue declines. So, here are five steps to evaluate and prioritise new market attractiveness:
1. Customers and competition
Use Market research to analyse potential competitors and customers to evaluate the demand for your product/service. Determine if its a real opportunity and worth putting time and resources into the project. Assess competitors strengths and weaknesses can help you exploit them to develop your potential growth strategies. Work out what problem and need your new product or service will be fulfilling for your potential customer. And understand whats going to stop them from buying from you. Isolate consumer activities using segment analysis which shares characters, including age, education gender, income education, occupation and softer measurements like lifestyle and values.
2. 10000 feet marker view
You need to do more than just assess your competitors and potential customers. It’s essential to work on an understanding of your whole potential market and determine what the chances of success are. Take your mind away from the company. Look at the market as independently as possible and answer high-level questions like:
- Firstly, what’s the market size?
- Is the market expanding?
- Or is it contracting?
- How’s the industry value chain structured?
- Is the competition intense?
- Is there a threat of new entrants to the market?
- How many potential buyers are there?
- What are the barriers to entry?
- What’s the supplier bargaining power look like?
- Finally, what substituted products could customers use?
3. Lateral opportunities
Look for the possible lateral markets is also a potentially winning strategy. If you expand your offering into similar but different markets just adjacent to spaces where you are already successful you will find that opportunity for the most sustained profit growth. So, similar channels reaching the same customers within a similar marketing structure can be a very successful strategy. Maintaining your knowledge of the markets around you will allow expansion outside your core business.
4. Understand the business environment factors
An often overlooked part of Market Research which can have massive implications on your business is your overall business environment. Such as:
- Geopolitical shifts
- Trade policies and Government regulations
- Technological developments
- Economic indicators
- Social and cultural norms
Evaluate any new business opportunity needs in the context of the above factors and challenges.
Getting and sorting information about these factors can take significant time. Also, you may not want to get found to be looking at your competitors. Also, market research reports are useful, but often not exactly what you need for a severe amount of money. So bespoke Market research and or Competitive Intelligence wins every time. Bespoke is up to date and should be if briefed correctly, forward-looking.
In this report, we offered 5 keys to conducting a market opportunity analysis. We suggested looking at your Customers and competition. And then a 10,000-foot approach, followed by looking at lateral opportunities and finally understanding your entire business environment.