A business plan transforms an idea into a commercially viable reality. The market analysis section provides evidence that a viable niche exists and helps define how the company can compete within it. This may involve assessing customer demand, competitor positioning, pricing, service features, or more specific factors such as RoboForex spread in a trading-related context. These findings form the basis of a more focused marketing and sales strategy.
What is a market analysis?
A market analysis provides insights into potential customers and your competition. The core components are:
- Industry analysis: Assesses the general industry environment in which you compete.
- Target market analysis: Identifies and quantifies the customers you will be targeting for sales.
- Competitive analysis: Identifies your competitors and analyzes their strengths and weaknesses.
Your business plan doesn’t need to include everything — just the highlights that demonstrate your understanding of your industry and how your business will succeed.
Industry analysis
The industry analysis is where you demonstrate your knowledge of the general characteristics of your business type. Present statistics on industry size, total annual sales, and growth rates. Is the industry expanding, contracting, or holding steady? Why? Who are the major players?
You may not compete directly with these companies, but you should be able to identify them and understand their market share and the reasons behind their success or failure. You should also discuss key trends that may affect your industry, such as changes in the target market, technology, or related industries.
This information is often available for free from:.
- Trade associations and industry publications
- Government databases: e.g., Census Bureau, Bureau of Economic Analysis, Bureau of Labor Statistics.
- Data and analyst opinions on the largest industry players (e.g., Standard & Poor’s reports, reputable news sources).
- Industry reports from publishers or aggregators such as Marketresearch.com.
- Competitor filings with the Securities & Exchange Commission and other regulators.
Target market analysis
How do you determine whether enough people are willing to buy what you offer at a profitable price? The best approach is a methodical analysis of your target market.
Understand your customers
You need to know precisely who your customers are. If you sell to consumers, do you have demographic information that paints a clear picture of who they are?
- Age, generation/life stage, gender.
- Average income ranges.
- Typical education and occupations.
- Geographic location.
- Family makeup.
- Lifestyle information (e.g., hobbies, interests, political beliefs, cultural practices).
You may sell to several types of customers — retail and wholesale, or government and nonprofit clients. While your product may appeal to a broader audience, a market analysis helps you focus your efforts on the segments that offer the highest return.
Competitive analysis
Competitive intelligence involves discovering and analyzing useful information about your competitors. Basic information every company should know includes:
- Each competitor’s size and market share compared to your own.
- How target buyers perceive your competitors’ products and services.
- Your competitors’ financial strength and ability to invest in advertising.
- Each competitor’s speed of innovation for new products and services.
Competitor data may be gathered by interviewing company executives, attending trade shows, and consulting industry experts. Don’t overlook competitors’ suppliers — they can be excellent research sources.
Be focused in your competitive research
In your competitive analysis, focus on businesses that directly compete with you — companies solving the same problem and targeting the same customers. Review their ads, brochures, and promotional materials, and if it’s a retail business, make some purchases there.
Analyze your competitors’ online presence
What content do they publish online and on social media? Check their online reviews on their own website and on independent platforms like Google, Yelp, and Bing. It can also be useful to look at the language surrounding competing brands — from pricing and platform features to account types and more specific searches such as RoboForex copy trading — to see what prospective customers appear to be interested in.
Tips for writing your market analysis
- Include a summary.
- Add visuals. Charts and graphs are effective ways to present metrics and statistics.
- Be concise. Get to the point early and avoid repetition. Plan several rounds of edits or have someone else review it.
- Keep everything in context. Make sure all data relates back to your business and how you are uniquely positioned to meet your target market’s needs.
