Market Opportunity: A Complete Guide in 2022 Covering What, Why, and How
Updated: Sep 26, 2022
Market opportunities are all around us. You do not have to look too hard to find them. They are often right under your nose and sometimes, they will be right in front of you. Simply take a step back and look at what is going on around you and assess the opportunity that lies in the situation. The only limit is your imagination.
In my experience, the more ideas you will produce, the better ones you will create. So, get creative and enjoy the process!
The first step in identifying a market opportunity is to assess the current market conditions and identify where there are gaps in the market. Next, you need to map out what the product or service will look like. This article will give you the basics of how to find a profitable business idea and start your startup.
Table of Contents
What is Market Opportunity?
If you are looking to start a startup, the market opportunity is your best bet. But what exactly is the market opportunity?
Simply put, the market opportunity is the potential for a product or service to succeed in the market. To determine whether a market opportunity exists, you will need to consider several factors, including the needs of the target market, the competition, and your unique selling proposition.
Needs of the target market: What are the needs of your target market? Are they unfulfilled by the current offerings in the marketplace? If so, there may be a market opportunity for your product or service.
Competition: Who are your competitors? What do they offer? What are their strengths and weaknesses? Conducting a thorough competitive analysis will help you understand the landscape and identify any potential openings.
Your unique selling proposition: What makes your product or service unique? Why would customers choose your offering over others in the marketplace? If you can articulate a clear and compelling answer to this question, chances are good that you have found a market opportunity.
Once you have identified a potential market opportunity, it's important to validate it with research.
How do you identify a Market Opportunity?
There are a few key things to look for when trying to identify a market opportunity.
1. You want to find an unserved or underserved market. This could be a niche market that is not being adequately served by existing businesses, or it could be a new market that is just starting to emerge.
2. You want to look for a market with growth potential. This means that the opportunity has room to expand and develop over time.
3. You want to find a profitable market. This means that there is a demand for the product or service and that businesses in this market can generate revenue.
4. It’s crucial to evaluate the Total addressable market (TAM), Serviceable available market (SAM), Serviceable obtainable market (SOM), or Target market (TG).
If you can find a market opportunity that meets all these criteria, then you have a good chance for the startup. To understand more about TAM, SAM, and SOM and how it is used to figure out market potential read our blog
What are TAM, SAM, and SOM? Whys is it Important? How to Calculate with Example
What is a good example of a Market Opportunity?
Byju’s is an example of f market opportunity. Earlier people needed good quality coaching classes. Metro cities had different agencies giving these services but there was no availability of online coaching classes, where people or students could learn subjects sitting at home. Byju’s understood the market opportunity and came up with the idea to provide quality sessions to students from their comfort zone.
Ansoff’s Matrix is a tool that can be used to help businesses understand their total addressable market (TAM), serviceable addressable market (SAM), and serviceable obtainable market (SOM). This understanding is critical for businesses looking to grow their revenue and expand their operations. By understanding these three markets, businesses can develop strategies to reach their target customers and maximize their potential sales more effectively.
To better understand how Ansoff’s matrix is used to assess the market opportunity read our blog
Ansoff’s Matrix: Its Importance and Methodology in 4 Easy Steps with Examples
How do you assess market opportunity or how conduct market opportunity analysis?
The most common types of market opportunity analysis are SWOT, PEST, and Porter's 5 Forces.
A SWOT analysis is an assessment of your company's strengths, weaknesses, opportunities, and threats. It is used to determine the internal and external factors that may influence your business in both positive and negative ways. By identifying potential issues early on, you can improve your chances of avoiding serious problems in the future. To learn how to do SWOT Analysis for example read our blog
2022 SWOT Analysis: What, Why, and How A Comprehensive Guide with Examples
A PEST analysis is a form of political research. It looks at sociological trends like demographics within a given population or the availability of natural resources in a region to determine how they might affect the overall business climate within an industry or market. To learn more about how to do PEST Analysis for example read our blog
2022 Comprehensive Guide to PEST Analysis: Examples, Methodology, and Applications
Porter's 5 Forces Analysis is used to help you identify the key factors that affect competition within an industry. It helps you understand what drives competition for your product/service and how that affects your profitability as well as your ability to grow in certain markets. This knowledge will help avoid pitfalls that could otherwise cause expensive mistakes during the development or expansion phases of a project. To understand more about Porter’s 5 forces for example read our blog
Porter’s 5 Forces Analysis Guide: Methodology in 5 Easy Steps with Example
Follow the following 10 steps
1. Define your product or service.
2. Research your industry and market.
3. Identify your target audience.
4. Analyze your competition.
5. Determine your unique selling proposition (USP).
6. Develop marketing goals and objectives.
7. Create a marketing strategy.
8. Implement your marketing plan.
9. Evaluate your results.
10. Adjust your plan as needed
Why is Market Opportunity Analysis Important?
Market opportunity analysis is important because it can help businesses to make informed decisions about launching new products or services. By identifying and evaluating market trends, consumer needs, and competitor activity, businesses can gain a better understanding of the opportunities and risks involved in launching a new product or service. This information can then be used to make decisions about whether to proceed with launching the new product or service.
1. Market opportunity analysis helps businesses to identify potential new markets for their products or services. It can also help businesses to assess the viability of new business ventures.
2. There are many reasons why businesses might want to conduct market opportunity analysis. For example, they may want to enter a new market, or they may want to diversify their product range. Market opportunity analysis can help businesses to identify opportunities that they may not have considered before.
3. Once the market research has been conducted, businesses can then start to assess the viability of the opportunity. They will need to consider things like the costs of entering the market, the potential profits that could be made, and the competition that they would face.
4. For new product development market opportunity analysis is useful to have knowledge management, market orientation, speed, strategies, teams, technology, and support.
Conclusion
Market opportunity analysis is a process that helps startups and businesses identify and assess new opportunities. It's a key part of any good business plan.
The market opportunity analysis process has four steps:
1. Define the market
2. Assess the needs of the market
3. Identify your target customers
4. Develop your value proposition
Each of these steps is important, but together they provide a comprehensive view of the opportunities available to your startup.
The market opportunity analysis is an essential tool for any business looking to expand into new markets. By taking the time to properly assess the needs of your target market, you can develop a value proposition that will resonate with customers and help you achieve success.
You can read our other blogs here:
What is TAM, SAM, SOM? Whys is it Important? How to Calculate with Example
Ansoff’s Matrix: Its Importance and Methodology in 4 Easy Steps with Examples
2022 SWOT Analysis: What, Why, and How A Comprehensive Guide with Examples