Market opportunity

A market analysis studies the attractiveness and the dynamics of a special market within a special industry. It is part of the industry analysis and thus in turn of the global environmental analysis. Through all of these analyses, the strengths, weaknesses, opportunities and threats (SWOT) of a company can be identified. Finally, with the help of a SWOT analysis, adequate business strategies of a company will be defined. The market analysis is also known as a documented investigation of a market that is used to inform a firm's planning activities, particularly around decisions of inventory, purchase, work force expansion/contraction, facility expansion, purchases of capital equipment, promotional activities, and many other aspects of a company.

Market segmentation is the basis for a differentiated market analysis. Differentiation is important. One main reason is the saturation of consumption, which exists due to the increasing competition in offered products. Consumers ask for more individual products and services and are better informed about the range of products than before. As a consequence, market segmentation is necessary. Segmentation includes a lot of market research, since a lot of market knowledge is required to segment the market. Market research about market structures and processes must be done to define the “relevant market”. The relevant market is an integral part of the whole market, on which the company focuses its activities. To identify and classify the relevant market, a market classification or segmentation has to be done.

Market segmentation is an important way to find competitive advantage with its differentiation in market analysis. Market segmentation concentrates on market energy and power to gain competitive advantage. In other words, market segmentation is the concept tool to get the force (Thomas, 2007). In market analysis, market knowledge is required to analyze market structure and process. Since segmentation requires a lot of market research, various information can be extracted from it. Market segmentation can identify customer needs and wants and develop products to their satisfaction. Market segmentation can identify different products for different groups, better match customer wants and product benefits, maximize the use of available resources and focus marketing expenditures and competitive advantages (Karlsson,2012).

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