PowerPoint Presentation

Section 6.2
 Pages 98-103
6.2
Industry and Market Analysis
What you’ll learn
 How
to research an industry
 What obstacles typically
block a new venture’s success
 How to study a target market
6.2
Industry and Market Analysis
Why it’s important


Studying your company’s
industry and market will help
you create a product or service
that people want.
Studying your company’s
industry and market will help
you understand your chances
for success.
6.2
Industry and Market Analysis
Key Terms
sales potential
market share
economies of scale
barriers to entry
brand loyalty
proprietary technology
6.2
Industry and Market Analysis
Key Terms (Cont.)
market share
niche
customer profile
customer needs analysis
6.2
Industry and Market Analysis
Springboard
Predict some
technological, fashion,
and agricultural changes
that might occur during
the next decade.
6.2
Industry and Market Analysis
I. LOOKING AT THE
INDUSTRY
A. Evaluate prospects for
success in the market.
B. Evaluate the sales potential
and the competition.
6.2
Industry and Market Analysis
II. TRENDS AND PATTERNS
OF CHANGE
To determine a business
strategy, one must understand
where an industry is headed
and how it works.
6.2
Industry and Market Analysis
III. YOUR COMPANY AND
THE INDUSTRY
How much of a product a
business can realistically
expect to sell is called sales
potential.
6.2
Industry and Market Analysis
IV. THE NATURE OF YOUR
PRODUCT
What one sells influences
how much can be sold.
6.2
Industry and Market Analysis
V. INDUSTRY TRENDS
Identifying trends can help a
business predict its product
or service’s sales potential.
6.2
Industry and Market Analysis
VI. SOURCES OF SUPPLY
Suppliers can affect costs,
products, and sales.
6.2
Industry and Market Analysis
VII. DEMOGRAPHICS
Demographics can indicate
if an industry is growing,
shrinking, or remaining
stable.
6.2
Industry and Market Analysis
VIII. BARRIERS TO
ENTRY
A. Barriers to entry can
keep new businesses
from entering or
succeeding in an
industry.
6.2
Industry and Market Analysis
B. New businesses face many
obstacles.
1. Economies of Scale. Bigger
businesses can churn out
more products more
quickly and cheaply.
6.2
Industry and Market Analysis
2. Brand Loyalty. Customers
prefer to purchase
products and services from
companies they know.
6.2
Industry and Market Analysis
3. Access to distribution
channels.
4. Proprietary Technology. A
know-how that is owned
and often protected by
patents.
6.2
Industry and Market Analysis
Math Problem
Next year’s total market
toy sales will be $5M.
Your projected toy sales
are $50,000. What will be
your market share?
6.2
Industry and Market Analysis
IX. THE COMPETITION
A. Market share is a
portion of the total sales
generated by all the
competing companies in
a given market.
6.2
Industry and Market Analysis
B. A niche is a small section
of a market, usually based
on specific customer
needs.
6.2
Industry and Market Analysis
C. Conduct a thorough analysis
of the competition.
1. Identify competitors
2. Find competitors’ strength
and weaknesses
6.2
Industry and Market Analysis
3. Identify competitive
advantages
6.2
Industry and Market Analysis
X. LOOKING AT THE
TARGET CUSTOMER
A. Know the customers.
B. Meet the customers’
needs.
6.2
Industry and Market Analysis
XI. WHAT DO WE WANT
TO KNOW ABOUT THE
CUSTOMER?
A customer profile is a
complete picture of a
venture’s prospective
customers.
6.2
Industry and Market Analysis
A. Who are my customers?
B. What do they generally
buy, and how do they find
out about it?
6.2
Industry and Market Analysis
C. How often do they buy it?
D. How can my business meet
their needs?
6.2
Industry and Market Analysis
XII. WHAT DO MY
CUSTOMERS NEED?
A customer needs analysis
pinpoints which features
and benefits of goods or
services customers value.
6.2
Industry and Market Analysis
End of Section 6.2