PART 4 Flashcards
STEPS TO EVALUATE AND ASSESS MARKET POTENTIAL THROUGH MARKET RESEARCH (5-VAACE)
Verifying Market Size
Analyzing Market Growth Trends
Assessing Competition
Consumer Behaviour and Preferences
Evaluating Profitability
involves looking at both the number of potential customers (volume) and their overall spending power (value)
Verifying Market Size
this basic information is crucial for a more in-depth analysis of the market
Verifying Market Size
look at how the market is growing
Analyzing Market Growth Trends
examine past trends, current conditions, and future predictions
Analyzing Market Growth Trends
Key Factors to Consider- Analyzing Market Growth Trends
how saturated the market is
its potential for growth
any new sectors that are emerging
involves analysing the strengths and weaknesses of competitors, their market positions, and any barriers that might prevent new businesses from entering the market
Assessing Competition
Knowing what customers want and how they behave is crucial. This step involves dividing the target market into segments and understanding their buying habits, preferences, and needs. Tools like surveys, focus groups, and consumer data analysis are often used here.
Consumer Behaviour and Preferences
The final step is to assess whether actually entering the market would be profitable, so weighing the costs of entering the market against the potential earnings. Financial modelling and forecasting are used to estimate potential revenue and profits.
Evaluating Profitability
HOW TO CONDUCT A MARKET POTENTIAL ANALYSIS (5-CAEAE)
Conducting Customer Research
Analyzing Market Trends
Evaluating Competitive Landscape
Assessing Market Size and Growth Rate
Estimating Profit Potential
involves understanding the needs, preferences, and behaviors of your target customers. This can include collecting data through surveys, interviews, focus groups, and even social media engagement. This crucial step allows you to tailor your product or service to meet the demands of your customer base, enhancing customer satisfaction and loyalty.
Conducting Customer Research
is key to assessing market potential. You need to keep an eye on the latest developments in your industry, including new products, technologies, regulatory changes, and consumer behavior. This insight can inform your product development and marketing strategies, ensuring you stay competitive and relevant in your market.
Analyzing Market Trends
involves identifying your direct and indirect competitors and analyzing their products, marketing strategies, market share, strengths, and weaknesses. This knowledge allows you to differentiate your product, identify gaps in the market, and devise strategies to gain a competitive edge.
Evaluating Competitive Landscape
involves quantifying the number of potential customers and the rate at which the market is expanding or contracting. This information is vital for understanding the potential demand for your product and the scalability of your business.
Assessing Market Size and Growth Rate
involves analyzing the potential revenue and costs associated with your product or service. This includes considering the pricing strategy, cost of production, operating costs, and potential return on investment. This step is crucial for determining the financial viability of your product or service in the market.
Estimating Profit Potential
ENTRY BARRIERS
obstacles that make it challenging for new competitors to enter a market
BARRIERS TO ENTRY
an advantage of established sellers in an industry over potential entrant sellers, which is reflected in the extent to which established sellers can persistently raise their prices above competitive levels without attracting new entrants to enter the industry
(Joe S. Bain, American Economist)
BARRIERS TO ENTRY a cost of producing that must be borne by a firm which seeks to enter an industry but is not borne by firms already in the industry
(George J. Stigler, another American Economist)
Zero barriers to entry
Perfect competition
Medium barriers to entry
Monopolistic competition
High barriers to entry
Oligopoly
Very high to absolute barriers to entry
Monopoly
ETHICAL CONSIDERATIONS IN INTERNATIONAL BUSINESS (10-CLECHFSFTR-Cats Love Eating Cheese; Hamsters Find Socks For Their Resting)
- Cultural Sensitivity
- Labor Practices
- Environmental Impact
- Corruption and Bribery
- Human Rights
- Fair Trade
- Supply Chain Responsibility
- Fair Competition
- Transparency and Accountability
- Respecting Intellectual Property
Respecting diverse cultures is essential. Practices that may be acceptable in one culture may be considered unethical in another. Understanding and adapting to cultural nuances are vital.
Cultural Sensitivity
