9 Questions to Ask When Assessing a Market If you're struggling with, looking to expand or considering entering into an industry, study your opportunity for growth with these queries.
By Andrew Miller Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Surprisingly, I see many organizations struggle to develop an accurate assessment of a market they are already in or are considering entering. Too many companies are not able to properly assess the potential size of the market, the behaviors required to succeed in that market, as well as how much of the market is actually attainable and why.
Assessing market-growth opportunities should be no different than anything else an organization does. There should be a disciplined way of going about it. This assessment will help a company determine whether to invest time and resources in trying to capture parts of that market, so the assessment needs to answer the right questions. Sometimes capturing share of an existing market is not the right strategy, because you should be creating a new market (think Apple's iPad).
Related: This Crucial Market Research Can Help Your Company Shine
It is important to note that you will never be able to know everything about a particular market, but here are some key questions you need to answer in order to make the right decision:
1. What is the current size of the market? What is the potential size of the market? Will it grow or contract? Why?
2. How much of the market share can we conservatively take? What's that worth to our organization, both financially and otherwise?
3. How well does our product fit into the current market? Can we create a new market for our product?
4. If we are in the market already, what has made us successful and/or what has made us unsuccessful?
5. What are the buying habits in the market and how can we exploit them?
Related: The ABCs of Market Research
6. What are the different segments of the market? Do we want to compete in all of them or only some of them? Which ones are growing and which are contracting?
7. Who are the competitors in the market and why do customers buy from them? What do we need to do to get customers to buy from us?
8. What kind of margins should we expect in this market? How does that align with the overall margins for our organization?
9. Who are the customer organizations we should be targeting first?
As you can probably glean from these questions, it's as important to understand what your organization brings to the market as it is to understand the market's external forces. Often, organizations aren't able to succeed in a market because they don't properly assess their own capabilities.
Assessing growth potential in existing or new markets requires some common sense, critical thinking and analysis. Don't over-think the decision. Review your answers to the questions above and then make an educated decision as to the best move to make.
Are you asking the right questions when assessing market growth opportunities?
Related: Richard Branson on Finding the Right Path
