Ultimate Guide to Market Analysis That Provides Immediate Value
Every business wants to grow. To accomplish this, your business needs a competitive edge.
A market analysis is an incredibly functional resource that provides competitive intelligence on your industry, market, consumer, competitors, and yourself. Given the constant change happening in all markets, to be successful you must automatically and continuously gather and filter intelligence on your market and distribute it to relevant audiences so they can make decisions and act.
This eBook will cover:
Market Analysis Fundamentals
At its most basic, a market analysis helps you identify how to gain a competitive edge. It’s a thorough assessment of a market that helps you determine how to position, price, sell, build, and invest in your company to be more competitive, grow market share, and better serve your customers.
Business school grads will easily tote that a market analysis is an important component of a business plan to determine if a market is ripe for you company’s offerings. That’s true, but it’s too linear in concept. A market is forever evolving. You make a move, a competitor makes a move, regulations change with a new president, etc. A market analysis isn’t a one-and-done. If you want to be successful long-term, it’s a continuous activity.
“Here’s the truth, most companies don’t perform a consistent market analysis. In 2020, only 7% of businesses are considered insights-driven and able to continuously gather and apply market intel that differentiates them. The most advanced businesses use AI-gathered data and curated insights to grow 20+%.”
Boris Evelson and Michele Goetz
Forrester Research, Enable An Insights-Driven Business, 29 Apr. 2021
Most companies only perform a market analysis reactively – when you are launching a product, entering a new market, a competitor directly attacks you, etc. Trouble is, when you only do a reactive or ad-hoc market analysis, you are stuck in a cycle of outdated information. And worse, it’s likely everyone in the company is starting to do disparate analysis themselves which is, first of call, quite inefficient, but it also means everyone is starting to diverge from a common goal.
Given the amount of data and rapid rate of change, this is problem is only getting bigger for companies.
In 2021, Innosight found that the average tenure of a company on the S&P 500 has decreased by almost 40% from 1964 to 2016. Simply put, these companies lost market share because they couldn’t adapt to an evolving market. If you’re still not convinced, Forrester found enterprises able to rapidly (Evelson, Boris, and Cinny Little. Evolve Data And Analytics Roles And Skills For The Adaptive Enterprise, 26 Feb. 2021) adapt grow 3.2x the industry standard.
“Everyday, every week, every quarter, things change. If we’re looking for them and if we’re aware of them, we now can say ‘My gosh, by taking this knowledge of this trend in market demand, we can tweak our mission statement or vision of success or phase a competitive element, we can take advantage of this.”
A market analysis will help you understand the dynamics of your market within your industry. A market is created by consumer demand and anyone trying to capture that demand is tethered to the changing needs, motivations, and regulations in the market.
Critical questions for a market analysis:
Hungry is a corporate and event catering company that connects clients to local chef entrepreneurs.
The founders of Hungry evaluated the change in market demand and saw new opportunities to serve emerging demand with B2C catering, virtual experiences, pop-up restaurants, and helping to feed those in need through public and private contracts.
While 17% of restaurants closed in 2020, Hungry’s catering company instead skyrocketed and posted record revenue and turned profitable.
Understanding their consumers needs and rapidly adjusting their business model to serve the shifted market set Hungry apart and helped them have a record year of growth.
“The idea you begin with is not what you end with. You need to be willing to adapt and evolve as you learn more and more about what the market is looking for.”
Purpose of a Market Analysis
A market analysis gives you a realistic benchmark for business goals, reduces risk, highlights emerging trends, illuminates competition, and helps you project revenue.
To be successful in business, you need to run a market analysis... and then refresh often.
A market analysis provides a benchmark of both where your company is at currently and where competitors are to realistically determine how to approach the market to gain revenue. It helps you create a business plan to attack the market, fill in gaps, and determine market attractiveness.
A PWC survey found that companies who benchmark achieve 69% faster growth and 45% greater productivity than those that don’t.
The main benefit of a market analysis:
A good market analysis is answering a specific problem statement. This leads you to uncovering your desired target audience and build products that matter instead of building a Frankenstein monster product loosely appealing to a large group of people.
A market analysis will tell you the size and division of the market so you realistically can determine how much you can capture and what you need to do to capture it.