How do you conduct a thorough market analysis for your Business Plan?

Defining the market is the single most important step when doing a market analysis. If you get it wrong, the entire endeavor is doomed. Often, understanding the market requires multiple sources and being able to combine these elements into something new. Through the process, be vigilant to not allow analysis creep to occur.

Always look to define the addressable market and break this down in to core and then extension opportunities. This keeps you focused on developing activation plans for the most important customers first and not trying to boil the ocean.

You need to identify the geographical aspects of your target market. Find out which territory you want to tap into. Get details and data about the geographical location and the market players serving it. Develop a list of the pros and cons of the location and consider future expansion plans of the territory.

Defining your market is crucial, but relying heavily on secondary sources can be misleading. While secondary sources provide a broad overview, they often lack the nuanced insights needed for accurate market analysis. As Henry Ford said, "If I had asked people what they wanted, they would have said faster horses." Direct engagement with your potential customers can unveil needs and opportunities that static reports can't capture, paving the way for innovation.

Best practices include: Identify your target customers: Who are the individuals or businesses that will benefit from your product or service? Determine geographic scope: Where are your potential customers located? Are you targeting a local, regional, national, or global market? Assess market size: How large is the total market for your product or service? What is the estimated market value? Segment your market: Can you divide your target customers into smaller groups based on demographics, psychographics, or other characteristics? Analyze market trends: Is the market growing or shrinking? Identify competitors: Who are the other businesses offering similar products or services? What are their strengths and weaknesses?

STP is the classic method for decision-making to enter to market! First of all, we have to select the best method for Segmenting the market and then Target some segments neglect others, and decide to Position that preferred target group to describe you! It seems simple but it works very well!

This is a critical step. Not every customer has the same profile or background. Build a table of the different taste, needs and profile and their individual wants and needs.

Best practices include: Create detailed customer personas: Develop in-depth profiles of your ideal customers, including their demographics and behaviours. Utilize customer journey maps: Visualize the customer's experience with your product or service from start to finish, identifying pain points and opportunities for improvement. Analyse market fit: Align your value proposition with customer needs and pain points, ensuring a strong product-market fit. Conduct market research: Gather data through surveys, interviews, etc to understand customer preferences, needs, and buying behaviour. Analyze customer data: Use analytics tools to track customer interactions, identify trends, and measure the effectiveness of your marketing efforts.

Segment your target market by sector, demographic and preferences. This will help you determine the ideal marketing tactic or channel you can approach them through. List down the characteristics of each segment and the value you can deliver to them.

For customer segmentation, we can collect the demographic (i.e. location, gender, age, marital status, occupation, language, income level) and psychographic data (i.e. interest, attitude, values, personality). After the collection of data, we can create a customer persona to define an ideal customer profile. Value proposition canvas is a great tool to align your unique value proposition to meet the target customer's needs.

Instead of using SWOT you can use SWT, Strenghts, weaknesses and trends to take a more external view. When you focus on the trends you are able to better reflect on how your products/services align with the market's. Your weaknesses are those things you can't really change because they are inherent to your position in the market, they are not the things you don't do well.

This is the old way of looking at market analysis. When I started to understand that my competitors could actually be my collaborators, the entire equation changed. Some companies will be your competitor no matter what you do, but it's exciting when you suddenly have a stronger ecosystem of collaborators!

Ultimately it is important that you know your competition better than they do. This way you can truly develop a comprehensive attribute and value comparison that distinguishes your offering from the rest.

Competitor analysis is about understanding your direct and indirect competitors. It’s about understanding the strengths and weaknesses of the competition and how your product or service compares to theirs. Start by making a list of companies currently serving the same market you are entering. Next, make a list of their strengths and weaknesses. Finally, compare your strengths and weaknesses to theirs. By the end of your market analysis, you should have a good idea of the size of the market, your customers, and what problems you’re trying to solve. You should also know what is currently available and what is missing.

Market research is a tool effective towards competitor analysis. It helps provide the competitor pricing as well as their respective strengths and weaknesses. Through the analysis develop tactics that will give you a competitive edge in the market. Have key factors that your business will capitalize on towards reinforcing competitive advantage.

Best practices in industry analysis include: Know your industry: Understand its size, growth, and key players. Identify success factors: Figure out what makes businesses in your industry successful. Assess competition: Analyze your competitors' strengths, weaknesses, and strategies. Consider external factors: Think about how things like the economy, technology, and laws might affect your industry. Find opportunities and threats: Look for ways to grow your business and be aware of potential risks. Summarize: Use a SWOT analysis to highlight your business's strengths, weaknesses, opportunities, and threats.

To thoroughly analyze the industry, we utilize three key exercises: Macroenvironmental Analysis (PESTEL), Porter’s Five Forces, and Competitor Analysis. Together, these tools give a holistic understanding of the industry's dynamics, helping businesses to anticipate changes, mitigate risks, and capitalize on opportunities.

Discovering the external factors that affect your market gives you a true picture of the dynamics your business will deal with. Segment the factors in accordance to the capability of solving them. Find out which ones can be solved and which can't. Build a strategy that swaps those negative forces into strengths.

PESTEL analysis is a great tool to evaluate the macro-environment that may change from time to time. A business needs to stay updated on the development of its industry to navigate the challenges and come out with risk mitigation approaches.

According to my experience, we have to estimate the size of the market for the maximum possible and calculate the BEP with deviation from the margin to fixed cost! These two numbers show the roof and floor! After that competitors analysis can help you to predict market share! If this market is blue ocean or bloody! Usually in the market two or three players can Survive!

I find market share is not as important to understanding the addressable market size. If the market is not big enough then even 100% is not viable.

The top-down approach is a quick estimate of the market size based on market and competitor data. It is a preferred method for an early-stage startup where they don't have the customer base for their new product. On the contrary, the bottom-up approach is more accurate mostly based on internal data. It is an ideal method for an established business with existing products.

It's either a worthy pursuit or it's not. I have never worried about how big my slice of pie was...I want to focus on the size of the pie! With that said, I'm a huge believer in Blue Ocean thinking. If you can sell your services in an area where blue water exists, of course that's the best strategy. The corollary to that is creating something that doesn't exist (maybe mashing together two existing services into something fresh).

Analyzing your market strategy should go beyond traditional metrics and consider agility and adaptability. The classic marketing mix can be too rigid in today's fast-changing markets. Steve Jobs emphasized, "Innovation distinguishes between a leader and a follower." Prioritize flexible strategies that can pivot quickly in response to market feedback, ensuring sustained relevance and competitiveness.

Timing and sequencing is so critical. Understanding what approach is best; phased vs all in or regional or country specific are all key. Plus understanding cash flow implications is equally important.

Market penetration should be taken seriously as there's no one size fits all when it comes to approaching different target market segments. Develop an effective marketing strategy for different segments while building up the key success factors which are instrumental during the evaluation. Develop unique messaging and branding for different market segments that align to their needs and preferences.

I have found that no matter how much research and analyzation we do on a market the key to success is the voice of the customer. Many times our knowledge gets in the way of understanding what the customer wants or needs. By doing focus groups and pitching the same product different ways gives us a much clearer insight into the customers perception of it and our approach. Usually leads to alterations to our approach that pay off in the marketplace.

OMG! This is a left-brain fest! Analyse, analyse, analyse.. all very well (And I love data and analytics and an evidence base) But! Business planning is always wrong. The purpose is to support decision-making, budget allocation and… What about ‘why’. Use business planning to revisit why the organisation exists. Connect back to purpose. Validate that your plans represent a good way to realise that purpose. And think through how the outputs will support the human side: engaging the teams to reinvigorate why you employ them. The difference between an energised, aligned, empowered and high-performing business and the alternative is HUGE. Bring this into the business planning cycle!

Market analysis often focuses too much on competition and not enough on collaboration opportunities. While knowing your competitors is essential, identifying potential partners can unlock synergies that drive growth. Peter Drucker noted, "The best way to predict the future is to create it." Look for collaborative opportunities that can create new markets or enhance existing ones, transforming competition into mutual growth.

In case of a startup BP introduce experiments as suggested by the lean startup approach and merge the two approaches: highlight how big your market can be and experiments results