One of the most common ways to do this is a competitive analysis, but what exactly does this report achieve? Once you know all this, you can reflect on how your company fits into the market, and use it to build a strategy on where you need to go.
Town B Although Town B looks more competitive 10 competitors vs. The definition of a potential customer will depend on your type of business. For example if you are opening a small shop selling office furniture then your market will be all the companies within your delivery range.
As in the example above it is likely that most companies would have only one person in charge of purchasing furniture hence you wouldn't take the size of these businesses in consideration when assessing the number of potential customers. You would however factor it when assessing the value of the market.
Market value Estimating the market value is often more difficult than assessing the number of potential customers. The first thing to do is to see if the figure is publicly available as either published by a consultancy firm or by a state body.
It is very likely that you will find at least a business plan competitive comparison on a national level. If not then you can either buy some market research or try to estimate it yourself.
Methods for building an estimate There are 2 methods that can be used to build estimates: The bottom up approach consist in building a global number starting with unitary values. In our case the number of potential clients multiplied by an average transaction value. Let's keep our office furniture example and try to estimate the value of the 'desk' segment.
We would first factor in the size of the businesses in our delivery range in order to come up with the size of the desks park. Then we would try to estimate the renewal rate of the park to get the volume of annual transactions.
Finally, we would apply an average price to the annual volume of transactions to get to the estimated market value. Here is a summary of the steps including where to find the information: You can get the number and size of businesses in your delivery area from the national statistics.
Your accountant should be able to give you the useful life of a desk but you should know it since it is your market! You can compare the desk prices of other furniture stores in your area. As a side note here: That was the bottom up approach, now let's look into the top down approach.
The top down approach consist in starting with a global number and reducing it pro-rata. Once again the number of employees would only be a rough proxy given all business don't have the same furniture requirements.
When coming up with an estimate yourself it is always a good practice to test both the bottom up and top down approaches and to compare the results. If the numbers are too far away then you probably missed something or used the wrong proxy.
Once you have estimated the market size you need to explain to your reader which segment s of the market you view as your target market. Target Market The target market is the type of customers you target within the market.
For example if you are selling jewellery you can either be a generalist or decide to focus on the high end or the lower end of the market. This section is relevant when your market has clear segments with different drivers of demand.
In my example of jewels, value for money would be one of the drivers of the lower end market whereas exclusivity and prestige would drive the high end. Now it is time to focus on the more qualitative side of the market analysis by looking at what drives the demand.
Market Need This section is very important as it is where you show your potential investor that you have an intimate knowledge of your market. You know why they buy!
Here you need to get into the details of the drivers of demand for your product or services. One way to look at what a driver is, is to look at takeaway coffee.Create your own business plan Business planning has never been easier.
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A competitor analysis is an assessment of the strengths and weaknesses of your businesses’ competitors. This in-depth analysis of your industry competitors can help you to identify opportunities for improvement within your own business.
Gym Business Plan Template Fitness is big business, as baby boomers lead the charge to remain healthy for a lifetime. Gyms have come a long way, and new gym owners have a seemingly endless array of choices. The conclusions you reach from the data a product feature comparison gives you can be incorporated into the market analysis, competitive analysis and marketing plan sections when you begin to write a business plan.
Apr 23, · A Competitive Analysis Example to Give You a Running Start April 23, by Travis Bennett When you’re looking into the viability of a business, you need to prove you know what’s going on in the heartoftexashop.com: Travis Bennett. For each competitor or strategic group, list their product or service, its profitability, growth pattern, marketing objectives and assumptions, current and past strategies, organizational and cost structure, strengths and weaknesses, .