There is no dearth of market opportunities in the world that we live in. With the innovation in science and technology, the world is changing every day. A changing world opens up a wide range of opportunities. However, not every opportunity will be suitable for you. Identifying market opportunities that are in line with the company’s vision and capability is crucial. You can identify market opportunities for business growth with these eight steps:
1. Consumer Segmentation
Consumer segmentation is dividing your customer base into groups that share the same characteristics. There are two bases of segmenting customers—hard variables and soft variables.
Hard variables mean specific facts about the customers, such as age, gender, marital status, education, etc. For example, a manufacturer selling premium baby products can expect urban parents from the upper and upper-middle class to be their customers.
Soft variables mean characteristics such as attitude, lifestyle, values, etc. For example, organic yoghurt manufacturers can expect consumers who want high protein food and live a healthy lifestyle.
Carry out consumer segmentation for your business. Find out exactly who your customers are. Then, figure out what additional products or services you can market to them. It will be easier for you to target your existing customers rather than going for entirely new customers’ demographics.
2. Situation Analysis
A critical part of finding and choosing the perfect market opportunity is figuring out where your business stands. Situational analysis is used to determine the health of your enterprise. It is an effective tool to help you understand the strengths and weaknesses of your business. Ask yourself these questions:
- Is there anything missing from your product line?
- Can you enhance the current features of your products to introduce a new line of them?
- Where do people hear about you?
- Which platform do they use to buy your products?
By doing this analysis, you can find out what is missing from your business.
3. Direct Competition Analysis
It is vital to analyse the supply side of things. Thoroughly knowing your competitors or potential competitors is a prerequisite for expansion. Find out the answers to these questions:
- What are the products that are not performing in the market? Why?
- Are there some gaps in supply that your products can fill?
- How can you expand your small business to fill such gaps?
- What competitive advantage do you have over your competitors or potential competitors?
For example, Indigo Airlines learned to differentiate itself from its competitors to expand. It cut costs and marketed itself as a low-cost, efficient airline for the commoner. Soon, it grew to have the highest market share in India.
4. Indirect Competition Analysis
Analysing substitute industries can provide you with new opportunities. For example, an airline can study long-distance trains and bus schedules. Find out which routes people take the most. How much do people pay for these routes? Then, prepare a strategy to compete with other modes of transportation. What would it take to encourage people who travel by train or bus to fly instead? This type of analysis can give you fresh insights and new perspectives on things. They can help you in coming up with creative growth opportunities. You can establish an effective competitive advantage against competitors from substitute industries.
5. International Market Research
The world is becoming smaller every day. Technology is making great strides every day. The trends of the international markets are sure to affect the domestic market. Markets go differently in different places. It all depends on the local economy, income levels, education levels, and habits.
Identify similar international markets as your country. The latest trend in those countries can travel to your domestic markets soon. Furthermore, think about expanding internationally. Do market research on countries that are similar to yours. Moreover, finding out other countries’ happenings might lead you to new products and services that are missing in your market. For example, VR gaming seems to be the latest technological fad in the western world. Many companies sell immersive VR headsets that feel just like the real thing. The Indian VR market is still at a nascent stage, but the western trend may soon hit the domestic market. You can get a first-mover advantage now.
6. Social Media
Social media can be a great place to identify market opportunities. First, listen to what people are saying about your products and services. What do you think is missing from your catalogue? Scour through the comments and messages on social media. They will tell you the weaknesses of your products and where you can do better. You can grow your small business by listening to your customers or potential customers.
There is one more area where social media can help you out. It can help you carry out market research on your products and services. Find out the trends related to your industry on social media. For example, if you are an athleisure company, find out what the fashion influencers and people on social media are sporting these days. The latest trend can help you figure out growth opportunities.
7. Environmental Analysis
Analysing the scientific and technological advancements can lead to the identification of market opportunities. For example, smartphone penetration and high-speed internet facilitated the rise of cab services like Ola and Uber in the country. Furthermore, it also led to an increase in subscription of streaming services such as Netflix and Prime Video. In addition to the internet, advancements in biotechnology, Artificial Intelligence, Machine Learning, the Internet of Things (IoT), etc., can open new doors for your small business.
The environmental analysis also includes analysing a country’s trade and economic policies. A change in them can create market opportunities for you. For example, suppose a country is banning products that contain high amounts of sugar, saturated fats, and sodium. If it bans them, then this creates a new market for healthier and affordable food options. Using a variety of analyses can help you find suitable market opportunities for your business.
8. Investigate Other Industries
We have talked about analysing direct and indirect competitors. However, businesses that operate outside your industries can help you grow. See which companies are leading the way in the country. Figure out what they are doing to stand out from their peers and replicate the same in your business. For example, you can find out what pioneers from other industries are doing to cope with the aftermath of the Coronavirus to take lessons from them.
Finding out the perfect market opportunity for growing your business will not be easy. You must understand the strengths and weaknesses of your business first. Take your time and do the research thoroughly. Figure out new ways to think about things. We hope that this article helps you with identifying new business ideas.
1) How small business promotes industrialisation?
2) Impact of Lockdown on Indian Economy
3) GST: Is this a benefit to the Economy?
4) How funding boosts Startups to redefine Indian Economy?
5) OkCredit: Simple, Paperless & Secure solution for businesses
Q. How do you identify market opportunities for business growth?
Ans. Consumer segmentation, situation analysis, direct competition analysis, indirect competition analysis, international market research, social media, and environmental analysis are some of the ways you can identify market opportunities for business growth.
Q. What is opportunity identification?
Ans. It is the process through which businesses identify opportunities in the market. For this, they do market research, study the trends, listen to their existing customers, and study the international market. However, the process differs from business to business.
Q. What are examples of business opportunities?
Ans. VR gaming, direct selling via websites like Shopify, E-Learning, online gaming, providing services according to one’s expertise are examples of small business opportunities.
Q. What businesses are in demand?
Ans. We live in a digital world right now. Most emerging and popular companies are associated with modern technology and the virtual world. For example, brands like Tesla, Airbnb, Uber, etc., are tech companies. You can find out the trends of the modern world and identify which businesses are in demand.
Q. What is a great business to start in 2021?
Ans. Online tutoring services, direct shipping, arts and crafts, cloud kitchens, translation business, etc., are some great small businesses you can start in 2021. Talking about small business ideas, dropshipping is another one that entails selling products without actually holding inventory.
Q. What are the four ways to find an opportunity?
Ans. Businesses can ask their existing customers about the gaps in their products and services. They can study their direct and indirect competitors. They can identify the problems people are facing regarding the category of products and services they offer. Finally, they can study the latest trends in the market.