Knowing your market is one key to success in business. But before zeroing in on specific market threats, it’s a good idea to focus on seeing the big picture. Your company may already possess some of the information you need to gather. The best places to check are within senior management and marketing. Bear in mind, some market analysis data you uncover within your company may be out of date and therefore of limited value.
Thirteen Components of a Robust Market Analysis
Here are the main areas to focus your market research:
- Market focus
- Size of your market and expected growth rate
- Overview of your company’s current marketing position
- Matrix of your top competitors by market segment
- Detailed breakdown of competitors
- Overview of your current position with a focus on market opportunities
- Buy vs. build opportunities
- Possible acquisition candidates
- Risks and contingencies
- Potential competitive movements
- Deep dive into specific competitors
Now, let’s take a closer look at a few of these components. (Components not dealt with here will be discussed in a follow-up post.)
The market focus component identifies the specific market your company is targeting. This lays out the context for other parts of the analysis. Let’s say your company’s market is hospitals and your company wants to sell them software. Your analysis would visually illustrate how the hospital’s operations work, including how patients are processed, diagnosed, and treated. The analysis would then show how your company’s products benefit hospitals.
Market size and potential growth rate is where you consider how the segment you target fits into the overall health care market. If the overall U.S. health care market is $50 billion, show what portion of that figure falls within your potential market. Also indicate the other areas that help make up the $50 billion, but have no value to your company. For instance, these might include pharmaceuticals, physicians, and insurance. Then, list the projected annualized growth rate for each segment.
Where Does Your Company Fit In?
Now that you’ve established the scope of the market and the potential opportunity, it’s time to determine where your company stands among its competitors. Where does your company fit into the mix of companies vying for a piece of the hospital dollar? In the analysis presentation, you’ll need to list each competitor and their market share.
If your product covers multiple markets within the hospital, you will need to break the competitors out individually for all segments.
Market Analysis Continued
Next week we will continue this explanation of an analysis’ components and how best to share your information with company leadership.