This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here: http://flevy.com/browse/business-document/market-analysis-215 This document breaks down Market Analysis into 7 phase: 1. Problem Understanding and Definition 2. Market Environment Analysis 3. Market Place Analysis 4. Supply Analysis 5. Demand Analysis 6. Summary of Trends and Outlook 7. Strategic Options and Recommendations For each of the phase, the document evaluates relevant parameters. It discusses key probing questions related to the parameter, as well as the important benefits from proper analysis of each parameter.

1. Business Framework
Market Analysis Framework
This detailed 7-phase Market Analysis
framework distills the various analyses of the
Market, including the Market Place, Supply
Side, and Demand Side.
Problem understanding and definition
Market environment
Socio demo-
graphic,cultural
Economic
Political and
legal
Technological
Market
Market place:
Goods & Services
Supply
side
Demand
side4 53
Summary of trends and outlook
Strategic options / Recommendations
1
2
6
7
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2. 3
Contents
• Market Analysis Framework
• Market Analyses
- Problem Understanding and Definition
- Market Environment Analysis
- Market Place Analysis
- Supply Side Analysis
- Demand Side Analysis
• Market Analysis Conclusions
- Trends Summary and Outlook
- Strategic Options and Recommendations

3. 5
At each step, there are a number of objects that can be analyzed—these
objects can be broadly divided into ―Must haves‖ and ―Nice to haves‖
Framework Overview (2 of 3)
• Defining the market and
the study scope
• Understanding the issues
• Planning effectively
• Socio-demographic
• Economic
• Political and legal
• Technological
• Trends
• Market size development
• Price development
• Product and Services
• Market place characteristics
• Market force structure
• Main drivers
• Trends
• Deal with the subject
before kick-off
• Related markets
• Country specifics
Market environment
analysis
Market place analysis
Problem understanding
and definition
Musthave
Niceto
have
1 2 3
The development of the analysed parameters are the core of a market analysis
and the resulting trends are its essence.
Preparations
Market analysis

4. 7
Contents
• Market Analysis Framework
• Market Analyses
- Problem Understanding and Definition
- Market Environment Analysis
- Market Place Analysis
- Supply Side Analysis
- Demand Side Analysis
• Market Analysis Conclusions
- Trends Summary and Outlook
- Strategic Options and Recommendations

5. 9
External factors can influence a market heavily – the analysis of the
markets environment is therefore a crucial part of every market study
Market Environment Analyses
Object of
analyses
Questions to ask Parameters to analyze Output / benefit
Socio-
demographic
and Cultural
 How have the socio-demographic and
cultural environments developed and how
does this affect the analysed market?
 What are socio-demographic key drivers
relevant to analyzed market?
 Socio-demographic data: Age, sex,
nationality, household structure, mobility,
etc.
 Other parameters could be: Acceptance
of new products, evolvement of new life
styles, etc.
 Key drivers
 Developments of demography
 Change of customer behaviour
Economic  How has the economic environment
developed and how does this affect the
analysed market?
 What are economic key drivers relevant to
analyzed market?
 Economic development
 Per capita income
 Work force potential and productivity
 Exchange rates and inflation
 Etc.
 Key drivers
 Developments of relevant
economic factors
Political and
Legal
 How has the political environment deve-
loped and how does this affect the
analysed market?
 What are political and legal key drivers
relevant to analyzed market?
 Taxes and subsidies
 Labour contracts
 Import / export restrictions
 Environmental conditions
 Other laws and regulations
 Key drivers
 Developments of political and legal
factors relevant to analysed market
Technological  How has the technological environment
developed and how does this affect the
analysed market?
 What are technological key drivers
relevant to analyzed market?
 Technical maturity of industry and pro-
ducts
 Potential new materials and processes
 New / disruptive technologies
 Etc.
 Key drivers
 Developments of technological
factors relevant to analysed market

6. 11
To fully understand a market, the analysis of power distribution and the
deduction of main drivers are crucial
Market Place Analyses (2 of 2)
1 The players (suppliers, producers and service providers, trade) that have many options to choose their business partners depend less on them and have a strong market position
2 If there are only a few players, they are often in a strong position because the switching possibilities are reduced
3 The players with the highest buying powers are usually the most powerful
Object of
analyses
Questions to ask Parameters to analyze Output / benefit
Power Structure  How is the power distributed between
demand and supply?
 Is the analysed market place buyer or
seller driven?
 Refer to appendix for framework to
analyse demand/supply power distribution
 Be in a position to decide whether
to focus more on supply or
demand side for further analysis
Main Drivers  What are the main market drivers?  Unlimited number of parameters, for
example: Economies of Scale, first mover
advantage, research leadership, cost
leadership, etc.
 Be able to judge the market
position of companies
 Be able to focus on the market’s
key issues for further analyses
Must have

7. 13
… and by the actions and relative strengths of the sellers
Supply Side Analyses (2 of 2)
Object of
analyses
Questions to ask Parameters to analyze Output / benefit
Sellers  What are the overall market shares
 What are the market shares per product
or service category?
 How was the market share development?
 Market share overall
 Market share per product or service
category
 Market shares of players
 Market shares of players per
product category
 Market share development
 How are the players composed? Are there
mainly small, large, national, international
players? Are there mainly private
companies, or are there cooperatives?
 Are players focused on the respective
market or do they play in a number of
other markets?
 Composition of players by size,
nationality, form of organization
 Percentage of players which are only
active in the respective market
 Player characteristics
 How are the most important players
positioned in the market?
 Positioning strategies (i.e. cost leadership,
differentiation, focus)
 Market positioning of players
Must have

8. 15
Contents
• Market Analysis Framework
• Market Analyses
- Problem Understanding and Definition
- Market Environment Analysis
- Market Place Analysis
- Supply Side Analysis
- Demand Side Analysis
• Market Analysis Conclusions
- Trends Summary and Outlook
- Strategic Options and Recommendations

9. 17
The essence of a market analyses are recommendations based on strategic
options
Strategic Options and Recommendations
Perspective /
criteria
Questions to ask Possible strategies
Geography  Where do we want to play
geographically?
 Global
 Global but adapt local
 Regional
 Local
Growth  What is our growth
perspective?
 Expand
 Hold
 Consolidate
 Shrink
 Withdraw
Integration  What is our approach
towards integration?
 Forward integration
 Backward integration
Cooperation  What is our approach
towards cooperation?
 Acquisition
 Equity stake
 Partnering
 Independency
Behaviour vs.
Competitors
 What is our behaviour
towards competitors?
 Aggressive
 Neutral
 Collaborative
 Defensive
Recommendations