Entering a new market is a crucial step. It’s true for multi-billion dollar conglomerates, and its also true for service-based businesses with revenues between $1M and $50M.
Yet, quite a lot of companies are unable to perform a comprehensive analysis of the market they’re thinking of entering. From the potential size of the market to the behaviors and strategies needed to grow in that market, there’s a lot to cover on assessing new market.
While the basics of market research remain the same, companies should also look towards opportunities to creating a new market. Something along the lines of what Apple did with the iPad. As an entrepreneur seeking to expand your business by tapping into new markets, you should understand that the assessment of market-growth opportunities requires considerable thought and effort.
To help you out, here are eight pertinent questions that you should ask when assessing a new market:
- What is the market’s current size? And what is its potential size? Will the market expand or contract, and why?
- Conservatively speaking, how much market share can we take and what’s that worth to our company in terms of finance and other factors?
- How well do our services fit in the market? Is it possible to create a new market for our services?
- What are the new market’s buying habits and how can these be exploited?
- What are the different market segments? Do we need to enter in all or just a few of these segments? Which segments are expanding and which are shrinking?
- Who will be our competitors in the new market? Why do customers buy from these market players? And above all, what do we need to do to make them buy from us?
- What sort of margins are expected in the new market and how do these compare to the overall margins in our company?
- Which customer organizations should we target first?
As you can see from these insightful questions, its imperative that you have a clear understanding of what your company will be bringing to the market. Moreover, you should understand the market’s external forces.
In addition to common sense, critical thinking and analysis goes into a sound market assessment. Having said that, don’t over-think your decision to enter a market. The fact remains that it’s practically impossible to know each and everything about a certain market.
The key is to ask the right questions and spend appropriate time and energy to obtain the answers. Once you have the answers, review them and make an informed decision.
Fatima Mansoor is a writer at Aepiphanni, a small business operations and strategy consultancy that exists to help small business owners CREATE | DESIGN | BUILD extraordinary businesses. She is a freelance blogger, specializing in business & entrepreneurship, digital marketing, and health & fitness. Her focus is on creating compelling web content for small and medium businesses form diverse industries. She mostly writes for entrepreneurs and marketing agencies across the US, Australia and UK.
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