Market Analysis Business Plan: Target Market
Measure Components and External Factors
Market Analysis Business Plan: Market Research
Market Watch and Analysis Methods
Market Development and Outlook
Market Analysis Business Plan: Target Market
The goal is to sell a product. This is only possible if your offer clients something the competition can not. You must be accurately informed about your competitors and market data. A lot depends on your market analysis approach.
When you are writing a market analysis, you should pay particular attention to the market structure and your competitors and estimate their offers accurately to target clients more effectively. The competitive analysis also includes enterprises which are currently not competitors, but could become such soon due to the direction their business is going in.
Market knowledge is crucial for the success of your business. Be sure to check out our articles on fitness studio business plan and gastronomy/restaurant business plan. They’ll give you useful information as a future founder in a particularly competitive area. In case you ever need help, we’re here to write your market analysis for you.
How to Write a Market Analysis: Measure Components and External Factors
The potential of your company is contingent on the market size, which is why you need to assess the market as carefully as possible. This is the only way a possible funder can get an idea of the growth potential of your company.
External factors affecting the market development are among the essential parts of a business plan. These may include technological developments, environmental issues, legislative initiatives, authorization factors, and sudden crises.
Market potential can be identified and risks can be avoided by means of such an analysis. No product can be sold without a minimum market, no matter how good it is.
Market Analysis Business Plan: Market Research
The basis of the market analysis is good market research. This is one of the most important parts of a business plan. Think about your target group and what services you want to provide. Some sources are often updated and publicly accessible for others a fee is applicable, which can sometimes be rather high:
- Branch organizations
- Federal Statistical Office, public development agencies
- Press Articles
- Archives of banks, consultancies (White Paper)
- Press Releases of market research institutes
- Market research institute sites, GfA consumer confidence index
The data of a market analysis can indicate many factors such as the market potential, market volume, the forecast market growth, and the potential market share. Strengths and weaknesses of competitors, their performance and competitive offerings, as well as the market position of the supplier can be identified at a glance.
How to Write a Market Analysis: Market Watch and Analysis Methods
Writing a professional market analysis usually entails two complementary approaches. Available information is used for the secondary research. Usual sources are primarily the Internet, as well as banks, government agencies or business directories. Specialized literature, associations and chambers (IHK) may also help. All kinds of market research are available depending on what market you want to enter. Please note that some data quickly becomes outdated especially where fast-moving markets are concerned.
Primary research involves looking for new data on current market trends. This is achieved primarily by means of consulting relevant target groups. Product and service-oriented surveys are very valuable here. On the other hand, expert interviews offer the possibility of obtaining objective data and good tips. You would not go out of your way to get someone to write a regular business plan for you, and it is not necessary. However, if you want a tech startup with several million euro capital requirement, you may want to carry out some surveys and interviews in advance.
First impressions of the pricing, the demands and expectations of the products or services can be obtained with some research. You can assess your market status better using the data collection methods presented here.
Market Analysis Methods: Market Development and Outlook
The issue of the future is raised after the analysis of the market has been completed with view to the current situation. This is why you must include your future expectations in the analysis. It is not feasible to start a company if the market is shrinking every year. There is no guarantee for steady growth if the market has been growing every year either. The zenith of the market growth may have already passed, meaning the market is saturated. Competition from Asia just about decimated the local textile industry, and later also the solar industry. Both decimation processes lasted barely a decade.
Exact figures on the scope of the market for a product or service are particularly important because they are the basis for financial planning. Your statements about the market and the growth opportunities must be proven with carefully analyzed data. It is difficult to determine the anticipated and needed market volume in terms of new products and services. Often only expectations can be set out for new products. A realistic assessment is crucial, as an overvaluation of market potential can lead to completely wrong figures.
Ideally, the methodology of a market analysis would involve structuring in submarkets including regions, product groups, customer types or distribution channels. Another pillar of the competitive analysis includes potential replacement products as well as a product life cycle analysis. It is difficult to penetrate the market where long-life-cycle products dominate.
A market analysis with full figures is particularly valuable for potential investors. It is the essential foundation for the market forecast along with the long-term observation.
Writing a Market Analysis: Competition/Competitive Analysis
The competitive analysis in the business plan follows the market analysis. Although the information on competitors is not so easy to obtain under the market circumstances, great emphasis should be placed on gathering at least the basic information.
You first need to look at the market for the most accurate and meaningful analysis of competitors. You need to know how many competitors there are. If there are many competitors a classification according to certain criteria, such as size, importance or the division into direct and indirect competitors is recommended. Characterize the respective groups and justify the competitiveness of your start-up with view to these groups of competitors.
Look at strong competitors and analyze how you could use the strengths or weaknesses to your own advantage. Well-managed competitors are often an excellent source of inspiration for your marketing.
Analyze if possible what price competitors charge and why there are potential price differences (but be careful that you do not incur a penalty because of industrial espionage, as by misrepresenting yourself as a client). Financially strong competitors can pose a big problem, if you see your company risking getting involved in a price war. Perhaps it is best to distinguish yourself as much as possible from the competition at the beginning, giving yourself that little edge.
To perform an accurate competitive analysis, you need meaningful information on the latest industry trends. You can get this detailed information as well as the market data for market analysis from newspaper articles and articles in professional journals or on the Internet. The competitive analysis could be supplemented by brochures and information leaflets of the competitors themselves.
You can compile data and information on the competition by attending trade shows or talking to dealers, customers and possibly former employees. Try to classify your competitors using a detailed set of criteria by assessing points such as turnover, sales, market share, product range, services, distribution channels etc.
The market analysis is certainly one of the most challenging components of writing a business plan. Call us if you want to know more about how to write a market analysis or need us to write one for you. We can also write the complete business plan for you- please view this article on the applicable business plan writing services cost or talk to us directly.
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