Definition: What is Market Opportunity Analysis?
Market opportunity analysis is a process to assess the attractiveness of a business opportunity. Often clients come to me with what they think is a great marketing or product idea. After I do some research, I might find out that while it’s a great idea, the company is late to the market, and missed the window of opportunity. Sometimes it’s a home run. That’s a lot more fun.
Market Opportunity Analysis: The Process
There are 6 key questions we get answers to when doing market opportunity analysis:
- What type of an opportunity is this?
- An unmet customer need
- An improvement over a product/service already on the market
- A disruptive idea or technology
- A horizontal improvement which will improve functional operations
- An opportunity that is targeted to a specific industry segment
- How are people meeting this need today?
- Direct competitors
- Indirect competitors
- Substitutes
- Collaboration
- Think Porter’s 5 Forces
- Is another company already fulfilling this need?
- If so, how can I differentiate my company’s product or service to create a competitive advantage? If not, is there sufficient market demand?
- Is this opportunity financially viable both to our customers and to our company?
- How will this impact cash flow?
- What investment do we need to make to be in this space?
- What about distribution channels?
- Will we need to train our sales channels to market this opportunity?
- Will we need to establish partner relationships to market this product or service?
- Can we market this to our existing customer base or will we need to chase different customer segments?
- What external factors should we consider that might impact this opportunity?
- Think STEEP analysis: social, technological, economic, ecological, political/legal
Conclusion: Market Opportunity Analysis
- Is there a better opportunity you should be considering?
- Or is this the one?
- What’s the risk if you don’t chase this opportunity?
- Does this opportunity fit your company’s vision and future strategy?
Competitive intelligence is a major component of market opportunity analysis, which focuses on building and developing. Remember, competitive intelligence is not just used to identify and address competitor threats.
If you want to learn more about opportunity analysis, check out the presentation, Market Opportunity Analysis: Where Will the Business Compete by Gihan Aboueleish.
