Let’s be honest. It’s difficult to expand a business. It’s become harder to prosper amidst the turmoil, from the pandemic to inflation and war.
What is obvious is that your company’s future success depends on your capacity to identify the growth-sustaining strategies.
It’s crucial for you to have a thorough understanding of the business direction, resources, strengths, and capabilities of your company before we begin. The secret to making data-driven decisions is complete visibility. After that, you can analyse the market and determine how well today’s businesses are addressing consumer needs.
Let’s look at how to analyse these variables to seize your next chance for growth.
Eight Different Types of Analysis to Spot Market Opportunities
1. Consumer segmentation
Demographic and geographic factors like age, gender, location, education, occupation, and household income can be used to segment consumers. You can tailor your marketing efforts by taking into account behavioural factors like lifestyle, attitude, values, and purchasing motivations.
Demographic factors estimate the size of your potential customer base.For instance, a manufacturer of diapers will be aware of the number of young children living in a particular nation. Price, convenience, durability, design, and sustainability are just a few of the factors that behavioural variables use to identify the reasons why people make purchases.
Demographic groups are always changing. Millennials and Generation X are currently leading the world’s labour force. You must adjust your strategies to meet the needs of the various age groups you are targeting with your marketing efforts, for instance.
How do brands use consumer segmentation to reach new audiences?
2. Purchase situation analysis
When do people buy our product or service?
Is it when they need it?
Where do people make the purchase?
How do they pay?
3. Direct competitor analysis
Which brands are growing and why?
What is their unique value proposition?
How are they marketing their offerings?
What competitive advantage do we have over them?
4. Indirect competitor analysis
How many people travel long-distance on buses and trains?
What are the most in-demand routes?
How much do travellers pay for their tickets?
What is the occupancy rate of long-distance buses and trains?
How can we persuade a current bus or train passenger to travel by plane instead?
Similar to how honey and jam sales should be investigated, chocolate spread manufacturers should do the same to better understand their competitive position within the overall sweet spreads market.
5. Complementary product and service analysis
Understand how your customers use your product in conjunction with others
Detect new needs, opportunities and threats
Develop new offerings or redesign your products
Sell more effectively
6. Diversification analysis
A diversification analysis will help you determine how and where to grow if your business has attained a high level of maturity in your current market. To successfully enter new categories, however, you must have the necessary abilities, assets, or business models.
Analyse any industries that might profit from your offering first. Then, comprehend the industry’s potential for growth and the level of competition. Market sizes, shares, growth rates, unit costs, per-person sales, and brand positioning are important to consider. And think carefully about these issues before making a choice.
Do you have the capacity and tools to diversify?
Will diversifying dilute your brand reputation? Should you use a new brand in the new industry?
Do the potential financial benefits outweigh the risks?
Consider the British investment firm EasyGroup. The company extends the “easy” business model through a diversification strategy for long-term business growth. EasyGroup first established the low-cost airline EasyJet. However, it now applies its business model to a number of other sectors, including technology, FMCG, entertainment, and e-commerce. Additionally, in some cases, easyBus and easyCar were developed to compete with easyJet. This creates new revenue streams while offering consumers a variety of travel options.
A high-risk business development strategy is diversification. But when it’s done well, it generates more business, secure income, and steady demand.
7. Foreign market analysis
If your business competes in a mature or crowded market, looking into other nations may be able to help you reach your financial objectives.
Due to differences in economic development and cultural practises, markets expand at varying rates in different nations. The maturity of the product’s life cycle can be determined by tracking the changes in per capita consumption of a given product in each nation. Estimating the business potential will be made easier by being aware of the market’s size and competitors.
Additionally, you ought to look into the consumption patterns of more developed nations. For instance:
What is the percentage of people who use a smartphone to pay for their purchases?
These queries can provide insight into the market potential of your good or service in your own nation. However, it might also spur innovation in your current market.
8. Environmental analysis
Don’t forget to examine outside factors that might affect your company. This includes monetary conditions, geopolitical events, modifications to laws, advances in technology and science, and environmental elements like climate change. You can determine the attractiveness of the market and develop winning strategies by paying attention to these factors.
Consider the fields of automation and robotics. Markets are being disrupted by these technologies as they become more accessible and popular. Innovative business models were used by firms like Google, Microsoft, and Nike to invest in these untapped markets. But more companies than just these major ones are looking into this possibility. In fact, 42% of companies around the world said they would spend money on automation and robotics in 2022.
Scientific advancements could create new rivals. Singapore became the first nation to permit the sale of cell-cultured meat in 2020. Since then, both the likelihood of additional markets following suit and the activity of significant meat companies in this area have increased. Future diets are probably going to include a lot of cell-cultured meat.
Changes to a nation’s regulatory structure may also have an effect on your business. However, those who stay one step ahead of these threats can adapt them into productive new working methods. For instance, governments in Latin America began mandating that businesses place black labels on product packaging when it contains high levels of calories, sodium, sugar, and saturated fats. While some food and beverage brands may find this problematic, those who take advantage of the situation to invest in healthier alternatives stand to benefit.
Monitoring the market can assist you in redefining your pricing strategy during periods of high inflation. For instance, price increases for sunflower oil in 2022 were significantly higher than price increases for other types of edible oils. This forces businesses that use sunflower oil to choose between using an alternative oil or raising the price of their goods to increase profit margins.
This kind of analysis ought to be done frequently. Situational variables are constantly shifting. But with this research, you can remain steady in the face of uncertainty.
Next steps
Your company will be able to develop long-term strategic business plans and get a comprehensive understanding of opportunities by using a variety of analyses.
As soon as an opportunity is found, create a value proposition right away, plan the commercialization process, and calculate costs, revenues, cash flows, and financing requirements.
Remember:
Not all market opportunities found will be profitable. Because of this, successful businesses spend money on various kinds of research and analysis before entering a new market or altering a product.
Test your new product, service, or business model in controlled environments to reduce the costs associated with missed opportunities. However, because pilot testing makes your strategy known to the opposition, there are some risks involved. Keep in mind that the risk must be greater than the global cost of failure.
