Conducting a Market Opportunity Analysis

You and your team may be considering a variety of new business ideas and market
opportunities, but not all of them are worth pursuing. It's important to narrow down your options and make sure you focus on the ones that have the highest potential for success. 

Chasing too many growth initiatives can be dangerous for your business. 

"As an executive team's priority list grows, the company's revenue in fact declines relative to its peers." But focusing on a small set of promising initiatives can lead to above-average revenue growth.

Follow these five steps to evaluate the attractiveness of a new market opportunity and start prioritizing your business growth initiatives.

1. Research your customers and competition.

Use market research to analyze your customers and competitors on multiple levels. This will help you evaluate whether the demand for a product/service is real, and whether expanding into a potential new market is worthwhile for your company.

Identify consumers segments that share common characteristics such as age, gender, education, income, occupation, and place of residence, or softer variables such as lifestyle and values. Also consider consumer motivation. What "job" is the customer trying to get done? What barriers may be constraining consumption?

Knowing who your key competitors are and assessing their strengths and weaknesses can also illuminate specific growth strategies and ways to differentiate different products and services

2. Get a high-level view of the market.

However, assessing your customers and competitors is not enough. You also need to obtain a broader understanding of the market as a whole and what the potential of success is in the market. 

Otherwise, your organization could be trapped into thinking that a few percentage points increase is enough, where there is actually much more potential. Market researchers are experts at providing the overall objective picture and can help you step away from intra-company thinking.

When analyzing a market, these high-level questions come into play:

3. Understand the business environment factors.

Another area to explore is the overall business environment, which can have a profound impact on company performance and the ways industries operate.

The business environment includes factors such as:

Technological developments

Government regulations

Geopolitical shifts

Economic indicators

Trade policies

Social and cultural norms

Other factors impacting markets include Brexit, rising out-of-pocket spending on healthcare, and physician shortages. Any new business opportunity in these sectors will need to be evaluated in the context of these factors and challenges.

4. Find the market research you need fast.

Gathering and synthesizing information about all these categories can take significant time, effort, and expertise, but market research reports can give you a helpful leg up.

In these reports, you’ll find information on market size, market share, market forecasts, information on regulations, consumer demographics, and much more. In addition, many reports explicitly share analysis on key opportunities for future growth, next-generation product innovation, and emerging marketing strategies.