Market opportunity is a company's recognition of the new needs of potential customers, their requirements and the growing trend in demand for a given product or service and the use of this information to provide consumers with that product or service. A market opportunity involves the failure of competitors to use the factors we have identified. It requires an analysis that will allow us to get to know the market and the customers we want to attract and interest. Appropriate use of market opportunities is possible by adopting an appropriate market strategy, other than that of competitors (K. Banga, V. Mahajan, 2005, p.1). Its proper use is a great opportunity for the company to gain customers, popularity and satisfactory profits.
In the case of start-ups, the choice between the identified market opportunities is considered the most fundamental decision. The choice of alternative market opportunities is also considered to be a good solution in this situation (M. Gruber, I. C. MacMillan, J. D. Thompson, 2008, p.1423-1424)
Analysis of market opportunities
By analyzing the market opportunities, we can approach the feasibility analysis in the right way. Feasibility assay is practically oriented towards what we achieve by focusing on the tools and techniques we use to prepare it, and philosophically healthfull by being strategically stewardship oriented (R. E. Stevens, P. K. Sherwood, J. K. Dunn, 2006, p. XI). Analysis of market opportunities is a part of the strategic planning process and is very important for enterprises nowadays due to the fast and dynamic development of business and, consequently, due to the increasing competitiveness on the market.
Opportunity analysis is about determining the nature of the opportunities that the operational environment gives us. We focus on internal, financial and external conditions (R. E. Stevens, P. K Sherwood, J. K. Dunn, 2006, p. 3-8).
- External analysis- in this analysis the environment is explored. It examines factors such as the legal, technological, economic and cultural environment, for example. The size of the market or consumer behavior must also be taken into account. Another important factor taken into account in this analysis is the study of current and future competitors that may be competing for the same customer groups. The analysis of these external factors requires accuracies and effort.
- Financial analysis- is the next step in the analysis if the external analysis verifies that the factors are favorable to the company. At this stage, the potential profitability of the company is determined. It also results in the determination of the expected rate of return on investment. Determining these results will help to attract and encourage investors. Costs, revenues, profits, and investments shall be analyzed.
- Internal analysis-is the final stage of the analysis. Emphasis is placed on the analysis of objectives, resources, and capabilities that are directly related to a given opportunity, as it happens that even the most workable opportunity does not fit the resources of a given organization.
- Babazadeh R., Razmi J., Ghodsi R., (2012), Supply chain network design problem for a new market opportunity in an agile manufacturing system, "Journal of Industrial Engineering International", vol.8, p.1-8
- Banga K., Mahajan V.,(2005), The 86 Percent Solution: How to Succeed in the Biggest Market Opportunity of the Next 50 Years, Pearson Education, New Jersey
- Gruber M., MacMillan I. C., Thompson J. D., (2008), Look Before You Leap: Market Opportunity Identification in Emerging Technology Firms, "Management Science", vol. 54, No. 9, p. 1652-1665
- Gruber M., MacMillan I. C., Thompson J. D., (2012), From Minds to Markets: How Human Capital Endowments Shape Market Opportunity Identification of Technology Start-Ups, "Journal of Management", vol. 38, No. 5, p. 1421-1449
- Stevens R. E., Sherwood P. K., Dunn J. K., (2006), Market Opportunity Analysis: Text and Cases, Psychology Press, London
Author: Gabriela Jopek