Market Analysis

Market analysis – the key to business success

Market analysis is a fundamental tool in the business world. It involves the systematic collection, recording and analysis of data about competitors, consumers and the market. This process helps companies make informed decisions by gaining insights into trends, market dynamics and consumer preferences. In this glossary entry, we explore the term ‘market analysis’ in detail.

Definition of market analysis

Market analysis is a method of evaluating the dynamics, size and competitive landscape of a specific market. It involves examining the strengths and weaknesses of competitors, identifying market trends and understanding consumer needs and preferences.

Market analysis process

The market analysis process goes beyond simply collecting data. It requires systematic interpretation and analysis of this information. This process typically involves the following steps:

1. Defining the problem or objective.

2. Collecting and analysing secondary data from sources such as economic reports, industry studies and competitive analyses.

3. Collecting and analysing primary data through surveys, interviews and focus groups.

4. Interpreting and presenting the results in an accessible and usable form.

Relevance of market analysis

Market analysis is crucial for both new and existing businesses. It helps companies understand their position in the market, develop their business strategy and evaluate the effectiveness of their marketing activities. Market analysis can also help identify market opportunities and minimise risks.

Types of market analysis

There are different types of market analysis based on different aspects of the market. Here are some of the most common types:

1. SWOT analysis: This form of analysis evaluates a company's strengths, weaknesses, opportunities and threats in comparison to its competitors.

2. PESTLE analysis: This assesses the political, economic, social, technological, legal and environmental factors that influence the business environment.

3. Porter's five forces analysis: This analysis evaluates five forces – competitors, potential new entrants, substitute products, bargaining power of suppliers and bargaining power of customers – to understand the intensity of competition in the market.

Conclusion

In today's dynamic business world, market analysis has become an indispensable tool for success. It provides companies with the insight they need to compete in a competitive environment. It is important to note that effective market analysis is an ongoing effort, not a one-time exercise. When done correctly, market analysis can help shape business strategies, identify market opportunities and ultimately ensure business success.