Analysis of the current situation: where are you? Analysis of both demand and supply.

1.  Industry background

Overview of the industry and of the macroeconomic framework. Consider past and current situation, together with future trends and outline which are most relevant variables to consider. Don’t forget possible barriers to enter the market!

2.  Market Analysis

Provide an answer to the following questions: Which is your market? How do the distribution channels work, i.e. how do the customers receive your products? Which are your segments? How are your segments? In what position are your competitors?

• Demand point of view

Determine qualitative and quantitative aspects of demand. Some suggestions:

• • Definition of the market segments.
  • Customer decision criteria.
  • Situation analysis and evolution of market segments.
  • Typology, profile and buying behavior of the existing segments (fulfilled or unfulfilled needs, set of values, motivation, selection criteria, suppliers, etc…)
  • Changes occurred in demand.
  • Competitors’ performance analysis (segment competition and market share).

• Supply point of view

Determine qualitative and quantitative aspects of demand. Some suggestions:

• • Situation of the relevant market (supply size, producers, types of products on offer, brand names, market share, chosen segments and why, how these target customers will be interested in your offer, etc…);
  • Supply / current competitors (number, profile, relative importance, followed strategy, etc…);
  • Supply / Potential competitors (substitute products, evolution of the sector);
  • Distribution and marketing channels (existing channels, relative importance, past and future evolution).

• Legal framework

Consider those regulations and legislations that affect your business.

3.  SWOT Analysis

• Strengths: company internal factors that are helpful to achieve the objectives;
• Weaknesses: company internal factors that are harmful to achieve the objectives;
• Opportunities: external factors out of the company’s control that are helpful to achieve the objectives;
• Threats: external factors, out of the company’s control, that are harmful to achieve the objectives.

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References

1. Business Plan: Market Analysis Summary, accessed October 2020, https://www.thebalancesmb.com/how-to-write-the-market-analysis-section-2951562