Market Analysis Flashcards
define the term market.
= a place where supply and demand come together, often encased geographically
which demand and supply are considered?
effective ones, meaning only of those who are willing and able to buy the good
how are market structures determined? what do they tell us? state 4 examples of a market structure.
they are determined by the number of players in the industry.
market structure defines how the companies will perform.
1. perfect competition
2. monopolistic competition
3. oligopoly
4. monopoly
1->4 decreasing competition
state 5 characteristics of perfect competition.
- many competitors
- relatively easy entry into industry
- identical goods and services
- no level of control over price by individual firms
- CR4 (market concentration ratio) is close to 0%
state 5 characteristics of monopolistic competition.
- many competitors, but fewer than in perfect competition
- fairly easy entry into industry
- similar goods and services
- some level of control over price by individual firms
- CR4 up to 50%
state 5 characteristics of oligopoly.
- few dominant firms
- difficult entry into industry
- similar or different goods/services
- some level of control over price by individual firms
- CR4 is more than 50%
state 5 characteristics of monopoly.
- no competitors, only one firm
- entry into industry is regulated by gov
- no similar/different products - no direct competitors
- considerable level of control over price
- CR4 is 100%
describe what a narrow market focus is.
focus here is already defined and clear customer needs.
some already satisfied, some not
what is market potential? how can it be achieved? what is stopping the businesses (5)?
= estimated max total sales revenue for a market
- achieved through market opportunities, i.e. new users
- non-awareness
- unavailability
- unability to use
- benefit deficiency
- non-affordability
how is market development (and already exploited opportunities) tracked - which tool do we use?
the adoption curve. it defines an early market (innovators and early adopters) and a mainstream market (early majority, late majority, laggards)
to which curve is the adoption curve similar?
to the product life cycle curve - introduction, growth, maturity, decline or renewal.
each cycle requires a different strategy.
define the term market share (formula). what does it tell us?
= total market revenue / company market revenue
it tells us what kind of position the company has within the market.
define the term market share index. why do we need it?
= promotion (% of customers in the market that are aware of the product)
+ product (% of customers in the market that like product benefits)
+ price (% of customers in the market that find the price acceptable)
+ place (% of customers in the market that find the product available and easy to buy)
+ service (% of customers in the market that find the service experience favourable)
we need it bc the market share alone doesn’t tell us the reason the company is in the position it is.
what is the MABA analysis? (describe the picture)
it compares the relative market atractiveness (MA) and the business atractiveness (BA). it tells us whether we should invest in a company or divest (/harvest) it
shorturl.at/aiCOX
define the 6 steps of MABA analysis.
- identify markets of interest (product-market combos)
- identify an independent set of market attractiveness indicators
- evaluate the indiciators (imporantace) and assign weights
- identify a set of company capabilities that are necessary to compete in the market
- evaluate the company’s ability to leverage its capabilities in the identified markets
- draw the matrix
