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How to Conduct a Market Opportunity Analysis
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I have most of my best ideas at 3:00 AM or in the shower. But turning those shower ideas into a business opportunity requires further investigation. That’s where market opportunity analysis comes in.
While you and your team may have many new business ideas you want to explore, you don’t have time to head down every path. Some of those paths may even end up being dead-ends.
How do you choose which ideas to pursue, and which ones to let go of? Market opportunity analysis can help you narrow down your options to the ones with the greatest potential.
Who should conduct a market opportunity analysis?
That answer is, “everyone.” All sizes of organizations will benefit from better understanding the industry in which they’re operating or approaching. Whether you work in B2B, B2C, government, or non-profit organizations, defining and analyzing the market will help you make better decisions.
This kind of analysis can help you grow your existing business, pivot into new markets and opportunities, or expand into the periphery of your current market.
There are many reasons to take the time and examine the full range of options before forging ahead. Here are five important benefits you’ll get from market analysis.
1. Make better long-term strategic decisions.
Your business is impacted by many external factors. Without taking the time to examine the current market trends, you’ll be flying blind.
A market opportunity analysis can provide the insight you need to see into the future. What will the market look like in a year? Five years? 10 years? What forces are acting on the market today? How is the demographic of your target audience shifting?
2. Evaluate product or service demand.
You may have invented the next Google Glass: a great product with tough, niche demand. A market assessment will show the potential for selling your product or service. This analysis will help you evaluate if expanding into a potential new market is worthwhile for your company.
You may find that there is no existing market for your idea, leading to a “Blue Ocean Strategy.” “Blue oceans,” explain authors W. Chan Kim and Renee Mauborgne, “denote all the industries not in existence today — the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid.”
While that might be the case, you might also fail to create the market, or need to spend time and energy educating customers on the value of your new idea.
3. Identify potential marketing strategies.
The four P’s of your marketing mix are price, place, product, and promotion. Through the process of a market opportunity analysis, organizations can gain a deeper understanding of who their target customers are, what they want, and how they make their decisions.
After assessing the current market, you’ll be able to price your product effectively and know which promotion strategies will work best. Are there partnerships you should …read more
Source:: HubSpot Blog
