The Market analysis section provides an overview of the industry in which the business operates, including market size, growth trends, major players, and competitive landscape.
Why Industry Analysis is Important?
The Industry analysis helps investors and partners understand the key trends and drivers that impact the market and assess the potential for growth and profitability. By following these guidelines, you can create an effective Industry Analysis that provides a clear picture of the industry and your business’s position within it.
What to Include in Market Analysis for Business Plan?
Here are some key components to include in your Industry Analysis:
Market Overview:
Market overview provides an overview of the market size and its growth potential. Explain the current state of the industry, its historical trends, and its projected growth rates.
For example, Our company operates in the fast-growing market for online grocery delivery services.
According to industry reports, the global online grocery market is expected to grow at a compound annual growth rate of 20% over the next five years, reaching a market size of $400 billion by 2025.
This growth is driven by increasing demand for convenience and the rise of e-commerce. The research conducted for the market overview section should be used to support the potential success of the business.
Factors such as growing market size and customer need that favor the company should be highlighted.
Relevant Market Size:
Relevant market size refers to the portion of the overall market your business can target and capture.
For example, if a business is creating a new line of organic skincare products, its relevant market size would be the portion of the skincare market that is interested in and willing to pay for organic products.
This information is important for investors and lenders to understand the potential size and scope of the business’s target market, and how it can capture a significant share of that market.
Major Market Segmentation
The Major Market Segmentations section of a business plan should include a precise definition of the target market and its segmentation into smaller groups.
The analysis of each segment should evaluate their size, potential for growth, buying habits, and competition, and the selection of the most attractive target segments should be explained.
Overall, a well-researched and comprehensive Major Market Segmentations section is important for demonstrating the business’s understanding of its target market to potential investors.
Product and service segmentation:
Here, you will provide a detailed breakdown of the different products and/or services your business offers and how they are segmented.
For example, if you are in the food industry, you may segment your products by type (e.g. fast food, gourmet, healthy), or by target audience (e.g. children, seniors, athletes).
Regulatory Environment:
Explain any regulatory environment or legal considerations that may impact the industry or your business. This includes licensing requirements, certifications, and compliance with industry standards.
Demand determinants:
In this section, you will analyze the key factors that drive demand for your product or service.
For example, if you are in the coffee industry, demand determinants may include factors such as consumer preferences, demographics, and cultural trends.
Technology:
Identify any technological advancements that may impact the industry and your business. Explain how your business will adopt and leverage technology to gain a competitive advantage. Here is complete guide on how to write
