define the market
Before evaluating a new market, it must be defined clearly and precisely. What is the geographic scope, customer segment, product category, and value proposition of your market? How does it differ from existing markets and other potential markets? Defining your market helps narrow the scope of your research and analysis. , will help you avoid comparing apples to oranges.
Analyze market size and growth
One of the key factors to consider when evaluating a new market is its size and growth potential. How many customers are there in the market and how much do they spend on your product or service? How fast is the market growing? What are the factors driving growth and barriers? Industry report Various data sources such as , surveys, censuses, industry associations, and online platforms can be used to estimate market size and growth. You can also use a bottom-up or top-down approach depending on data availability and reliability.
Assess market competition
Another important factor to consider when evaluating a new market is its competitive intensity and structure. How many existing or potential competitors are there in the market and how strong are they? What are their strengths, weaknesses, strategies, and market share? In terms of quality, price, features, and differentiation. How do your products and services compare? Tools like Porter’s Five Forces, SWOT analysis, and competitive matrix can be used to assess market competition and determine your competitive advantage.
Estimate market profitability
The ultimate goal when entering a new market is to make a profit. Therefore, you need to estimate the market and the profitability of your product or service. How much profit can I expect in the market and what are the costs and risks associated with it? How much profit can I make with your product or service and what are the factors that influence it? Tools such as break-even analysis, income statement, and return on investment can be used to estimate market profitability and feasibility.
Understand market trends and dynamics
In addition to quantitative factors, qualitative factors that influence the attractiveness of new markets should also be considered. Current and future market trends and dynamics include: B. What are the customer’s preferences, needs, behaviors, and expectations? How do social, economic, political, environmental, and technological factors impact the market? How do regulations, standards, and norms determine the market? PESTEL Analysis, Customer Use tools like journey mapping, scenario planning, and more to understand market trends and dynamics and anticipate opportunities and threats.
Compare and prioritize markets
Finally, after assessing the attractiveness of a new market, it must be compared and prioritized with other existing or potential markets. How do new markets rank in terms of size, growth, competition, profitability, and trends? What competing objectives or synergies are there between markets? How do new markets fit into overall business strategies and objectives? Market attractiveness matrices, scoring models, portfolio analysis, etc. tools to help you compare and prioritize the market and make informed decisions.
