How to Analyze the Market to Find Business Growth Opportunities

Let’s be honest. Expanding a business is challenging. To prosper amid the turmoil, executives must successfully negotiate geopolitical tensions, market volatility, and economic unpredictability.

Your ability to identify the tactics that will maintain growth will influence how well your business does in the future. It requires a lot of work. However, we are here to assist you in getting there.

You must have a thorough awareness of your company’s resources, strengths, and strategy before we begin. After that, you can analyze customer wants and the market to see how businesses are currently meeting them.

Let’s now look at how to analyze those elements to spark your next expansion prospect.

Eight forms of study to find market opportunities

1. Analysis of consumer behavior and segmentation

Sort or classify your audience according to characteristics. This will enable you to most effectively target the appropriate individuals.

Consumer segments can be categorized based on behavioral (attitudes, lifestyles), geographic (city, country, area), or demographic (age, gender, education, income) factors.

You can estimate the number of potential clients with the use of demographic and geographic data. For instance, a baby food company should be aware of the number of infants in the nations where its goods are sold, both today and in the future. Alternatively, before extending distribution, an appliance maker may wish to ascertain the number of households in a desired market.

Behavioural factors should also be taken into account, as these indicators aid in identifying the reasons why people buy your product or service. Price and positioning are two examples of elements that can have an impact. Shopping decisions are frequently influenced by lifestyles, attitudes, and values; therefore, behavioral segmentations assist you in customizing your marketing campaigns.

To see how priorities are changing, you should keep an eye on both short-term and long-term consumer developments, such as megatrends. One of the biggest consumer trends and motivators for purchases is still wellness. In reaction to this change in consumer behavior, major food and beverage companies are adding health-conscious items to their portfolios.
Businesses will sell more efficiently if they employ consumer segmentation to customize their marketing, messaging, and merchandise.
The journey of the buyer is far from simple. Many variables can affect what, when, and where people buy things. You should respond to the following queries:

2. Analysis of the purchase scenario

The journey of the buyer is far from simple. Many variables can affect what, when, and where people buy things. You should respond to the following queries:

• When would people require or desire your service or product?
• Where do consumers buy products?
• How are your goods or services paid for?

To begin identifying purchasing trends and opportunities, examine distribution networks and payment options. This allows you to deliver the appropriate products to your customers at the appropriate time and location.

As an example, let’s examine the retail industry. The grocery industry is changing as a result of today’s consumers’ expectations for affordability and convenience. Over the past five years, there have been 36% more discounters and 15% more convenience stores worldwide. However, there were 4% fewer hypermarkets.

To customize product formats or features, it is also crucial to analyze possible consumption situations. For example, several yoghurt companies responded to the increased desire for portable, healthful snacks by introducing pouch designs.

Making well-informed judgments regarding your commercialization strategy is aided by a thorough examination of customer needs throughout the purchasing process, including preferences for payment methods and channels.

3. Analyzing competitors directly

Similar goods and services are provided by direct rivals.

Find out in-depth information about your company’s position in the market. You should be aware of the strategies used by major players to position their goods and services and gain a competitive advantage. Next, see how these businesses compare to your company. You might start by asking yourself these questions:

• Which brands are expanding, and for what reasons?
• What distinguishing feature do they offer?
• What is their strategy for innovation?
• What is your edge over them in terms of competition?

You can find growth possibilities by knowing your competitors’ performance, product portfolios, new product development (NPD), and strategic direction.

4. Analysis of indirect competitors

Although they sell different items that meet the same needs, indirect competitors aim to reach a comparable demographic. You can enhance your products and expand your customer base by examining businesses in other fields or categories.

Let’s make this a reality by using the travel sector. Airlines can search for ways to overtake alternative transportation options. White space can be found by asking the following questions:

• How many people take buses and trains for long-distance travel?
• Which routes have the highest demand?
• What is the cost of tickets for travelers?
• What is the long-distance train and bus occupancy rate?
• How can we convince someone who is currently taking a bus or train to take a plane instead?

In a similar vein, manufacturers of chocolate spreads have to investigate the price and performance of jams, honey, and peanut butter to comprehend their competitive stance in the market for all sweet spreads.

You can also learn about market potential by looking at the features of related items. To inform your innovation initiatives, you should stay up to date on the NPD launches of your indirect competitors.

This kind of analysis shows your value proposition in comparison to indirect competitors and helps you reach a larger consumer base.

5. Evaluation of related products and services

It is important to monitor the effectiveness of the products and services that underpin your business.

Therefore, butter and sweet spread brands should look at developments in the bread and savory biscuit industries. Another example would be the way tomato sauce manufacturers monitor pasta performance.

This research aids you:

Increase sales by recognizing how your customers use your product in conjunction with other products, recognizing new opportunities, risks, and demands, and developing new or redesigned items.

Assume a fresh ground coffee pod manufacturer wishes to increase its retail distribution. Demand and market potential can be estimated using pod coffee machine sales data.

When choosing which sectors to invest in, trends in related industries should be taken into account. Gain market share by using this knowledge to direct your strategy for product innovation.

6. Analysis of diversification

A diversification analysis will assist you in determining how and where to expand if your business has achieved a high degree of maturity in your present market. However, to successfully enter new markets, you need the appropriate business models, resources, and expertise.

Examine any industries that might profit from your offering first. Next, calculate the growth potential and comprehend the competitive environment for each. Examine brand positioning, unit prices, growth rates, market sizes, shares, and per capita sales. Before making any financial decisions, you should consider the following crucial questions:

• Do you possess the ability and resources to diversify?
• Could you benefit from economies of scale, and do you have relevant resources in other industries?
• Will diversifying weaken the reputation of your brand? In this new industry, is it appropriate to use a new brand?

When properly implemented, diversification can increase clientele, provide economic stability, and create steady demand as your business evolves to meet changing consumer demands.

7. Analysis of foreign markets

Investigating foreign markets may help you reach your financial objectives if your business competes in an established or crowded market.

Due to differences in local customs and economic growth, different nations expand at varying rates. Product lifecycle maturity can be determined by tracking changes in per capita consumption of a certain product in each nation. Estimating business potential will be easier if you are aware of the market’s size and the competitive environment.

For example, because developing markets’ GDPs have grown more rapidly in recent years than those of advanced economies, many multinational corporations are focusing on emerging regions.

Before entering new markets, one must take into account local customs, laws, and rivals. Some useful inquiries to pose are:

• How must your product be modified to accommodate regional laws or tastes?
• Who are your primary rivals in this new nation?
• Do local celebrations or certain seasons have the potential to increase demand for your products?

When preparing to expand internationally, these issues must be taken into consideration.

8. Analysis of the environment

Remember to examine outside variables that may affect your company, such as foreign relations, technological advancements, laws, and environmental changes. Here, too, a PEST (political, economic, social, and technical) study is helpful.

The corporate agenda has shifted toward generative AI. 55% of experts anticipate that generative AI will have an impact on their company during the next five years, per Euromonitor’s Voice of the Industry Survey 2024. Businesses can use this new technology to help their operations expand.

Read more: Easy Brand Marketing Strategies Can Help Any Small Business Grow Its Sales

Changes to the regulatory framework may also affect your company. For instance, recent policy shifts from the US, the largest importer and economy in the world, are having a significant effect on other countries. The global economy and important consumer sectors are changing as a result of President Trump’s policies on tariffs, taxes, spending, regulation, immigration, AI/tech, and energy. To react and adjust in this quickly evolving environment, businesses need to be aware of the ramifications.

To prepare for potential risks or interruptions, you also need to assess various economic scenarios. You may evaluate market attractiveness by keeping an eye on these factors.

This type of analysis should be ongoing. External forces change every day. But this research will help you stay resilient when things are rough.

Next activities

By integrating these eight assessments, your organization may create long-term strategic business plans and gain a thorough grasp of opportunities. It is important to remember that not all market opportunities will succeed. For this reason, companies invest in numerous types of research before changing a product or entering a new market.