Small and medium businesses and even the largest corporations are always at the mercy of relentless market competition. However, without competition, our market economy will lose one of the core principles that the American business culture has been founded on. We’ve come a long way since Fortune declared Coke as the obvious winner in its decades-long rivalry with Pepsi Cola. You may also see free business plans.
Today, marketing teams fight for content and feed visibility, while intellectual property lawyers hired by the world’s biggest brands wage war via patent filings and legal suits to boot. The economy may have evolved in recent years, giving us larger-than-life weapons through technology, but the way to which companies compete remains the same. If you’re a restaurant owner, for example, sitting back and watching the diner across the street attract new customers and take over the whole market should be out of the question. You may also see Analysis Template.
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Importance of a Market Analysis in a Business Plan
1. Understanding Competition
A businessman ambitious enough to take his competitors seriously would naturally want his business to grow and be on top of his industry’s pecking order. Recognizing your competition means recognizing the market you’re targeting, which is very important in having a business plan that would serve as the cornerstone of your business’ marketing success.
You see, a success in your marketing efforts means an eventual success for the business itself. Then again, that’s only possible if you conduct a marketing analysis before mapping out the entire business plan sample. A well-designed plan includes your market analysis while it lays out the vision of growth and the steps needed to get you where you can potentially be at.
2. Being Objective
Starting and managing your own company often comes with an unhealthy dose of pride so that it becomes quite difficult to see the product and services you’re offering from a critical point of view, especially if you have invested so much in it. The market analysis makes companies take a step back and ask why consumers would choose what they have over the store down the street.
Having your sample business plan with a focus on market analysis would also prove crucial in communicating your business idea to investors, potential partners as well as the leadership team and staff as you watch and continue to aim for growth and success.
3. Identifying Your Entry Point
For a businessman, discovering that people are hiring your services or purchasing your products makes you think twice about the competitors you have seemed to put on high pedestals for quite some time. That they’re not always the big guys that you have thought them to be. That they’re not invincible. That you can compete with them, by all means. A doughnut’s competition might be a yogurt or your favorite fruit shake’s competition could be the blueberry cheesecake sold in the pastry shop near you. You may also see market analysis templates.
Such are the things that are often caused by sugar rush, late night cravings and the agony of early morning hunger. But you’ll find that they’re not always sold by the business that you treat as your competition in general, surprise, surprise. With the help of a market analysis properly put together, you’ll be able to identify your entry point accurately and what your unique selling advantages are, both of which are crucial in creating a tangible business model.
The biggest organizations in the corporate world’s largest industries have always shelled out money by the thousands, even millions of dollars on market research and analysis. They spend so much in the research and analysis area of business so that they can grasp every little detail floating in the market that could help them achieve their goals faster and better.
Apple and Microsoft have been known to invest money in researching the latest technological trends and they spend just as much on analyzing consumer behavior. Their success speaks for themselves but now you know that it certainly doesn’t come without a price-a huge amount of planning and hard work, to stay ahead of their competitors. It is for this reason that they’re Apple and Microsoft and the rest are almost unheard of sometimes. You may also see successful business plans.
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Conducting Market Analysis Business Plan
1. Identify your target market
Markets are dynamic. As such, they’re bound to change like everything else, and you need to watch out and prepare for those changes. The one you should be looking at is your potential market, not the one you currently have since that’s only limited to your existing consumers. Having a target market gives you a wider, broader scope than just being seen by the people you have already reached. The markets you target are people who could be within your reach in the future or the one you need to be reaching for and care about. You may also see marketing business plans.
For example, the market of a local diner and the bookshop selling used books includes not just its regular diners and shoppers but everyone covered by the area or everyone living within a driving distance. For a gardening and landscaping business, the market targets all private and commercial properties within logical reach. The market for amazon’s eBooks includes practically every internet user interested in reading, and the market for office furniture includes businesses in the whole area and probably beyond city limits.
Your target market makes up a big part of your plan and every plan is different you need to gather as much information as you can about the market you’re targeting and its potential. You may also see sample business plan outlines.
2. Market Need
Stating your market need is a very important part of the basic business plan you’re going to show to investors because it would prove how much you know about your market. That you know why they buy your products or services is a good sign. You need to get into details of what drives the demand for your products or services. One good example of what a demand driver is would be the morning to-go coffee.
Why do so many people buy coffee from one chain? What’s with the caffeine rush? Or is it just the caffeine rush? It’s more than that because there’s a consistency that comes with buying coffee from the same chain you’re used to getting it from. This is because you’re not likely to buy coffee from an independent coffee shop when you don’t know what they offer whereas you’re willing to get one from a store of the same food chain in your location. You may also see sample marketing action plans.
From a tactical perspective, this is where you need to champion your competitive edge without being totally obvious about it. You may have to include a description of your current competitors, their advantage, weaknesses, and place in the market, whether you see them being on top, average, both or right below you. You need to be objective before you go to the strategy section which you’ll have to mention your own position in the market. You would want to prepare your reader to welcome your positioning first, with open arms and invest in your simple business.
3. Market Trends
It’s not only important to know what’s going on with your market but also crucial to understand it—the fashions and trends that you know could affect and influence your market segments largely and the consumer’s behavior towards these changing trends are a big part of your analysis. For example, if you’re selling ready-to-wear basic everyday clothes, is there a specific pattern showing people responding to fashion trends or are they more concerned with seeing more political statements on the shirts you sell? You may also see industry analysis templates.
What about diversity? How do they react to the models you use in your campaigns? The questions posed for a targeted audience, since every business need a target audience, will always be different. The most important thing is that you become more aware and stay informed of the market trends affecting your specific market. You may also see sample small business plans.
Understanding the current and future trends in a focused economy is vital in adding value to your knowledge as a businessman or a marketing analyst or consultant. It also offers enough leverage in future planning for marketing efforts and overall business development.
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The primary purpose of a personal business plan is to define what the business is about, what it’s setting out to do, and where it wants to be in the future. Being clear about the purpose of your company and its direction allows investors, other stakeholders, and you as a businessman to understand what strategies you need to put in place moving forward. Businesses evolve over time and they need to adapt.
Factoring growth and a positive direction in a detailed report give a strategic edge with information that you can use to analyze the local, regional, and national economy and there’s nothing like a market analysis in a business plan that can provide you the kind of advantage you need to make this possible.