Market Assessment

What is a Market Assessment?

A market assessment is a comprehensive analysis of your company’s competitors, consumers and other industry stakeholders.

A critical part of your company documentation, a market assessment enables your company to understand the need and demand for its business offerings in the market. It provides details on market opportunities, growth drivers and barriers, industry cost structure, distribution channels, market trends, key success factors, market competitiveness, and consumer preferences.

Conducting a market assessment study is critical for your company whether you are looking to launch, expand your business or grow your consumer base.

What should a market assessment include?

Some of the main components of a market assessment are:

• Market Dynamics: Outlines the historical and forecasted market growth rates, market segments, drivers and barriers, regulations and market trends
• Competitive Landscape: Outlines how competitive the market is overall, market share of key players, capability, opportunity and threat analysis and competitive benchmarking
• Consumer Dynamics: Offers insights into consumers’ requirements, preferences, purchase behavior, and maximum willingness to pay

How do you conduct a Market Assessment? 7 steps

1. Decide why you’re doing a market analysis - what business goal do you want to achieve?
2. Outline the current state of your industry - what’s the environment and context you’re operating in?
3. Hone in on your customer/buyer persona - who is your current customer and who is your ideal customer?
4. Get under the skin of your competition - what are their strengths and weaknesses?
5. Use authoritative statistics to support your assertions. 
6. Analyze the data and understand the narrative of your market assessment.
7. Turn your market analysis into an actionable strategic plan.

Why is a Market Assessment important for business today?

Market assessment enables your company to:

• Identify the market potential of your company by understanding market and consumer dynamics
• Forecast your sales by evaluating the size of existing and potential consumer base
• Access capital by indicating the market potential of your products, or services
• Formulate strategies to achieve both short-term and long-term business objectives
• Assess your business performance by benchmarking your offerings against those of competitors
• Estimate the price of your offerings by analyzing consumers’ need and their willingness to pay

Why is a Market Assessment important for an event tomorrow?

Market assessment is important for an event tomorrow, as it helps:

• Assess the market potential and business opportunities for your company
• Recognize the potential of your company’s offerings to address current gaps in the market
• Evaluate the competitive advantage of your company vs external market conditions
• Benchmark the offerings of your company with its peers
• Assess opportunities to expand to adjacent markets and grow business offerings post completion of transaction

Pros of addressing Market Assessment

• Risk mitigation by understanding market barriers, regulatory scenarios, and competitive threats affecting your business
• Improvement in your market position with the unique sales proposition of your company’s offerings
• Maximum return on investments through understanding of market dynamics and competitiveness
• Improvement in your company’s offerings and increased revenue
• Assessment of consumers needs, pain points, and willingness to pay
• Improvement in efficiency as it enables your company to restructure based on market conditions

Cons of not addressing Market Assessment

• Lack of efficiency, as business strategy is formulated without adequate assessment of the market
• Potential operational inefficiencies due to not identifying market opportunities and threats
• Increase in risk of financial loss with product and services that have limited attractiveness in the market
• Restriction on growth potential due to failure to expand into adjacent markets and launch new customized offerings

FAQ

What are the 4 types of market analysis?

The most common types of market analysis techniques are buyer behavior, surveys, interviews, and focus groups.

How long does a market assessment take?

It can take several weeks to conduct a market assessment, then collate and analyze the data. Larger projects can take several months.

What are the factors affecting market assessment?

Some of the external factors that can impact market conditions are:

• State and federal legislation and regulations 

• International and political conditions

• Investor appetite

• Product supply and demand

• Employment levels

• Inflation and interest rates

• Seasonal fluctuations

• Technological disruption

• Natural disasters