Market Analysis is an important indicator of how well a business is doing in the marketplace compared to its competitors. A Market Analysis can be used to identify the potential of your business by ascertaining:
- Size of the market
- Different segments of the market
- Competitor analysis
- Client/customer profiles
- Trends
The result of the analysis is useful in determining new strategies and goals for further developing the business.
Two tools that help with Market Analysis
1. SWOT: Strengths, Weaknesses, Opportunities & Threats Analysis A SWOT Analysis is a strategic planning tool. It involves monitoring the environment – internal and external to the business – in order to identify the different factors that can impact on the achievement of your business objective.
Why is it Significant? By completing a SWOT analysis and answering the questions in each box (refer to the example below), you are better equipped to generate creative and realistic strategies for how to cope with both the external and internal environment of your business. Download a SWOT analysis template, here.
2. GAP Analysis A Gap Analysis is a business assessment tool enabling your business to compare its actual performance with its potential performance. It involves establishing a general expectation of performance in the industry and comparing that expectation with the level of performance at which your company currently functions. A Gap Analysis helps you establish where your business is, how far away your business is from where you want it to be and how much time and effort will be involved in getting to where you want to be. A Gap Analysis can be used in any number of ways, a couple of examples are:
- Market usage gap – this is the gap between the total potential for the market and the actual current usage by all the consumers in the market.
- Profit gap – the difference between existing profit and forecasted profit.
- Productivity gap – the difference between actual productivity and desired productivity.
