One of the most important key parts of any business is analyzing the market opportunity. And a market opportunity analysis includes available technology, financial capabilities, along with competitive readiness to take any action. In order to grow your business and to increase your sales, market opportunity analysis plays a vital role.
But you need to make sure that you are analyzing the market opportunity in the right way. Otherwise, all your hard work and time will be wasted. Going in the right direction is much crucial for any business and its strategies. So, first, start with gathering some basic knowledge about market opportunity analysis.
What Is Market Opportunity Analysis?
Market opportunity analysis is nothing but studying the dynamic and attractiveness of a market within a specific industry. It is basically a part of the global environmental analysis.
The elements of market opportunity analysis are:
- Market size.
- Market growth rate.
- Market trends.
- Market profitability.
- Market opportunity.
- Distribution channel.
- Industry cost structure.
- Success factors.
- And lastly, applications.
How To Do A Perfect Market Opportunity Analysis In A Business Plan – Step By Step
Analyzing the perfect business opportunity is not at all a matter of joke. The whole process takes a lot of time, effort, and of course, tons of research. So, here is a step-by-step guide on how to do a perfect market opportunity analysis.
1. Know What Is Happening In The Recent Business Environment
Here, you need to have a close look at the economic conditions. Whether the economic condition of the business is growing, or stable, or having a declining graph. You also require checking for any social changes or trends that may affect the business. Consider both the regulatory and legal situations here.
As they are the most prone to changes and be prepared and ready for any future expected changes. Research the state of the art developments along with all the latest technology. Take the natural environment into account. Properly look for any limitations or vulnerabilities on resources that may cause hinder your growth in the near future.
2. Define The Industry Along With Determining The Outlook
While analyzing the market opportunity, you are required to shape exactly the same industry within which you are operating, and on the basis of the market size, do not forget to make forecasts. Look 5 years or more back, and based on that project, your thoughts on how it can grow in the next 12 months, or 3 years or 5 years.
Look to your competitors and check all the marketing techniques that they are utilizing. By doing this, you also can check for any new major trends or changes is happening within your industry. You will have some major implications for different potential opportunities; after all, you need to ensure that you are moving in the exact same direction as the market.
3. Look More Details Of Your Competitors
As they say, know your competitors better than themselves. So, you must have some clear idea about the businesses you are competing with. Know their products from the inside out, along with the product mix. Now compare the details with your products for analyzing the market opportunity. Always remember your intention is to identify all the strengths and weaknesses of those products from your customer’s point of view. And how do you identify that? Well, some more research.
Get knowledge about how your competitors are reaching the market, which channels they are using in order to perform the marketing, and also the distribution of their products. In your research, also include the level of service your competitors are providing, then sum it in a few sentences to identify the available market opportunities.
4. Describe Your Target Market
You should build a profile of your target customers for market opportunity analysis. This will help you to be focused on your marketing focus and sales and reach your customers. In case you have not started with your marketing plan, then consider building the customers’ at the very beginning as it will help you to understand and strategize in order to reach the target market. In order to guide your progress, there are several templates available.
And in case you get stuck at some point, you can try by asking some questions yourself. Here are the questions:
- Who are your potential customers?
- As a consumer, what are your potential customers like?
- What are your potential customers searching for?
- When is the product required?
- Is there any particular channel where your products will sell best?
- How do your potential customers make a decision for buying a product?
- Are their buying decisions being affected by any outside influences?
- Can any limitations influence the opportunity level?
- How is your industry market developing and also changing?
The answers to these questions will help you to figure out your customers. Always remember that the goal is to satisfy the end-users and fulfilling their requirements.
5. Now Develop Your Projection
You need to use various kinds of techniques in order to build all the information of your business plan. It is to set the forecasts of your sales. At the same time, you need to put effort into both the worst and best scenario analysis. In case you have any gut-fellings, you need to compare them with the current market.
The final and ultimate recommendation in any market opportunity analysis is nothing but a very simple answer to the question, Is the planned project a go, or a no go in the business markets? You also can consider another point of define assess or define asses.
It simply does not matter what your business is all about or how big or small your business is; the main intention of any business is to increase its sales. And in order to increase sales, you first need to prioritize what your target audiences are searching for, what they are thinking about your product, apart from that analyzing your industry market, its future, and your competitors as well.