An economic market study is a qualitative and quantitative investigation of the market. It looks closely at the market’s size, both in absolute value and in relation to other markets, the purchasing patterns of the market segments, the market’s competitive landscape, and the prevailing economic environment in respect of barriers to entry. It then utilizes current economic and financial indicators to forecast the market’s direction and the market’s long term potential. It also applies macroeconomic and credit-to-income (LTI) ratios to identify the buying power of the market sector. By doing all of these things, the study tries to provide a trader or investor with objective information regarding the market.
The study will show what the market share of the targeted business segment is at any given point of time and over a period of time. This enables the trader to make a decision as to whether the business has the potential to sustain itself given a period of time, and what proportion it must reach in order to reach the target market segment. The study also shows what the competitors are doing to take advantage of the market segment. It is essential for investors to understand the dynamics of the business industry. It is not just about buying shares of the business; it’s also about analyzing the business to understand the market trends.
The market analysis section of the business plan is the second section that is heavily relied on by investors. This section focuses on the competitive landscape of the business sector. There are two types of competitive landscape that an investor can analyze; namely the vertical and horizontal aspects of the market scenario. This helps the business owners to determine the business’s target market; the location where the business operations; and the industries that are most potential to the business.
In addition, this section also highlights the company’s product range and services that can be offered to the target market segment. The other information provided in the market analysis section focuses on the management’s strategy to increase the sales volume of the business. This section also highlights the financial and business structure of the organization, and the working capital position of the organization. All these factors have significant influence on the growth and survival of the organization.
There are several techniques that help an investor to analyze the business prospects and identify the key factors that affect the future profitability of the organization. The market analysis section of the business plan serves as a guide to the business owners. It is essential for investors to study the market carefully and to come with relevant strategies to improve the profitability of the business. A thorough market analysis will also provide a set of the company’s future prospects and will help the business owners to take right decisions for the growth and survival of the organization.
In case of businesses, the market analysis will focus on the one-way process which concentrates on the identification of the identified prospective customers or clients. This is referred to as the high-end market segment. The low end of the market segment consists of the potential buyers who are interested in the same product or service offered by the firm and there is less competition here.
For this type of business, it is essential to perform the market research required to find out the factors that influence the buying behavior of the target market segment. The market research should also include the analysis of the purchasing power of the target market segment. The small business plan must include the analysis of the market competition along with the strategies to counter the existing and new challenges the target market faces. For this one-way process, there are an investment in the market research and the analysis of the business prospects and the strategies adopted for countering the competition.
The small business plan must also provide the financial feasibility of the business plan. The financial position of the organization will be analyzed to understand the scope for expansion, new venture etc. The market analysis section should include the distribution of earnings among the firm’s various segments to find out the profitability. It is essential to analyze the financial strength of the company so that the managers can make informed decisions regarding the expansion of the firm. Analysis of the market is an integral part of the small business plan and hence must be included in the overall marketing plan of the enterprise