MARKET ANALYSIS – TIPS AND PRACTICAL EXPERIENCE

Why is a market analysis needed?

Market Analysis Factsheet

If your company operates in a highly dynamic market with new competitors, changing customer requirements, or a high level of innovation , a market analysis can help to successfully position your company in the market, strategically utilize new market opportunities, and be prepared for future requirements.

Our factsheet on systematic market analysis shows typical use cases, success factors and common mistakes made in practice:

Market Analysis Factsheet

What is meant by a market analysis (definition of market analysis)?

What is a market analysis? A market analysis examines a regionally and factually defined market in a structured manner using defined evaluation criteria .

The criteria examined are typically general market data such as market volume/size, growth/forecast, competitors, their market shares and other market participants, trends, or general information on the competition, customers, and target groups of the market . The selection of criteria and relevant data takes place in the conceptual phase of the analysis.

Systematic market research serves to reliably assess strengths, weaknesses, opportunities, and threats within the market. It can focus on the entire market or a specific market niche and can be conducted by established companies as well as by startups.

Market analysis: Content and structure (components of market analysis)

The adjacent factsheet shows an exemplary structure with the most important contents of a strategic market analysis: A systematic market analysis evaluates a defined target market with regard to relevant attractiveness criteria such as market size, expected future development, competitive situation, customer requirements and market trends .

A market and competitive analysis provides a structured overview of market opportunities and risks fact-based evaluation of potential strategic market entry options for the company, allowing it to operate profitably in the market in the long term. Ideally, it therefore serves as a kind of compass for management , enabling targeted steering of the company in a dynamic and rapidly changing market.

The advantages of market analysis – what opportunities does market analysis offer?

Systematic market analyses are therefore particularly valuable where markets, competitors, and customer requirements are changing significantly and dynamically . This change leads to the breakdown of established structures, creating new opportunities as well as risks, and thus making reliable information of particular relevance.

Even though the term "disruption" is certainly overused, the current changes are affecting almost every industrial company. Attractive opportunities are currently emerging in the following sectors, for example:

The megatrends of " Electric," "Autonomous," and "Connected" are transforming the automotive value chain to an unprecedented degree. OEMs and suppliers are reinventing themselves in this dynamic market and must systematically evaluate new technologies and markets and make strategic decisions.

Digitization and automation of production are leading to new business models in the mechanical engineering market. Machine manufacturers are evolving from "hardware suppliers" to "full service providers" with digital business models that combine hardware, software, and digital services.

Miniaturization, digitization and the increasing use of artificial intelligence (AI) are leading to the development of new markets and applications in the steadily growing medical technology market, offering attractive opportunities for both established players and new entrants.

 

The continued increase in the use of renewable energy sources, greater decentralization, and the intelligent control of energy consumers are key trends in the energy technology market. As electrification progresses, the grids are being further expanded, accompanied by significant investments in future technologies. This presents attractive market opportunities for innovative companies in the field of future energy technology.

 

THE MOST IMPORTANT QUESTIONS ABOUT MARKET ANALYSIS – AND OUR ANSWERS

A distinction is made between secondary and primary methods of market research/market analysis.

Secondary market research involves evaluating all available information about the target market, the company and its competitors, customers and customer requirements, as well as market developments and trends. This includes utilizing existing market studies, market data from statistics, publications in trade journals, annual reports, press releases, and other so-called secondary data. The advantages of this approach are relatively quick and cost-effective market research results. A disadvantage is that the findings are based solely on existing data, and therefore, for example, the potential of very new products or services can only be assessed to a limited extent.

Primary market research methods involve gathering new information about the target market. This is achieved through various forms of surveys or data collection, such as interviews (in person or by telephone) or online data collection. These methods are relatively time-consuming and expensive, but they allow for the evaluation of a new product idea, for example, in the context of starting a business. Specialized market research institutes offer the necessary resources and tools as a service for conducting primary market research.

The goal of a systematic market analysis is to create a comprehensive, up-to-date, and realistic picture of the market under consideration. We would be happy to explain these three requirements in detail:

Comprehensive means that all relevant information is included in the analyses. This can include, for example, information on market segmentation, market attractiveness, competitors' market position, competitive advantages, barriers to entry, market trends, success factors, as well as opportunities and risks.

Up-to-date means that market monitoring provides the most recent data and information possible. Ideally, the analyses should not be older than 1-2 years; especially in highly dynamic industries, key performance indicators and competitor data must be current.

"realistic" means that the analysis of market size and competition, in particular, is fact-based and not influenced by wishful thinking. In practice, the potential of a market is often overestimated, and the competencies of competitors are correspondingly underestimated. Only a fact-based, neutral analysis of a business idea or target market makes it possible to achieve the goal of a realistic assessment.

The typical structure of a market analysis or industry analysis should be structured and systematic. We propose a basic structure and organization of the report into seven key chapters , although the exact structure and scope will depend on the specific objectives and initial situation:

(1) An initial explanation of the objectives / relevant questions as well as the methods and sources used in the investigation

(2) A clear presentation of the market segmentation or definition of the relevant segments and markets (regional, product-related)

(3) Information on market size , market volume, market growth and market potential

(4) Competitive analysis : Analysis of competition, competitors' key figures, solutions (products and services) and success factors of competitors and rivals, marketing strategies. Derivation of strengths and weaknesses.

(5) Customer analysis and analysis of the target group/customers, customer behavior and brand loyalty. Derivation of market entry barriers in the industry.

(6) Marketing planning , marketing channels, role of different media/marketing measures, marketing costs

(7) Overall assessment and implications for the company. If applicable, derivation of sales planning or a business plan, potential partners for market entry, required internal resources. Definition of next steps.

In this question, a clear distinction must be made between the B2C and B2B markets:

In the B2C (business-to-consumer, end-customer products) sector, extensive market data and analyses are often readily available, either free of charge or for a fee. These can be researched via market research portals or are offered directly online by the providers themselves.

In contrast, in the B2B sector (business-to-business, business customer markets), often very few readily available "off-the-shelf" studies. Here, market size, market potential, key market developments, data on competitors' market share or sales, or insights into the target group can only be obtained through a customized market analysis. This analysis is tailored to your industry and your products, allowing us to identify your specific goals, questions, and the information most relevant to you.

If you would like to have a customized market analysis prepared, we look forward to hearing from you.

If you want to conduct a market analysis, you will first need two things:

(1) Sufficient time resources: To be able to reliably analyze a sales market, sufficient time must be allocated. Depending on the experience of the person/team conducting the analysis and the available market analysis tools, several weeks of focused working time should be planned for research and preparation of the information.

(2) Knowledge of sources and methodology: To successfully produce meaningful market research, the researcher should have sufficient knowledge of the key data sources for the areas under investigation. This includes, for example, the most important databases, trade journals, or industry trade fairs in the target market. In demanding markets, niches, and technically oriented industries, paid access is often necessary for a reliable study. Methodological experience in evaluating target groups, market developments, potential, and trends is also helpful.

If sufficient time and expertise are lacking, specialized agencies like MEYER INDUSTRY RESEARCH can assist in conducting systematic market research. Their experience with numerous similar projects also allows these agencies to better evaluate market research results and derive the right conclusions and actionable insights from the data.

A systematic market analysis can be conducted internally or with external support. If the analysis is to be outsourced, we recommend considering the following criteria when selecting a partner:

(1) Industry experience and customers/references in the industry

How extensive is the partner's experience in the relevant market segment, and how advanced is their knowledge of the prevailing general market conditions? What opportunities/access to data sources and databases does the company offer?

(2) Establishment of the company (long-standing experience) and background of the founders

How competent is the project management team? What background and experience do the external partners possess?

(3) Customer service and offer

What products and solutions does the partner offer? What is the processing time? What are the service costs? Are individual project steps coordinated with the client?

MEYER INDUSTRY RESEARCH will gladly support you with your individual market analysis and create a customized offer for your task.

The cost of a market analysis depends heavily on factors such as scope, regional focus, the content analyzed, and other circumstances. Typically, the required budgets for professional market analyses range from €5,000 to €50,000 net. MEYER INDUSTRY RESEARCH will gladly prepare a customized quote for you. For start-ups, funding opportunities are available, for example, through the EXIST/ZIM or LIB programs.

HOW TO CREATE A MARKET ANALYSIS (Market Analysis Methodology)

The possibilities for obtaining strategically relevant information have improved considerably over the past decade. The amount of available information on markets and companies has grown exponentially. Search engines, databases, and analysis tools have improved significantly, so that experienced analysts now have access to possibilities that were unimaginable 10 years ago.

Nevertheless, in practice there are still some limitations in obtaining market and company information for systematic market analysis:

In very new markets ("first movers") and in niche markets, there is often still relatively little reliable information, statistics, data, and forecasts available in secondary sources. Even the best research tools can only draw from a very limited pool of resources in certain subject areas.

In these cases, the assessments of market experts and participants play a particularly important role, for example, through the inclusion of expert interviews. Experts can be market participants as well as representatives from universities, associations, or chambers of commerce and industry. Primary data collection provides deeper and more reliable information about the market than purely secondary analysis. Interviewees can, for example, provide assessments of market size, market development, market shares, market potential, technical specifications of other manufacturers' products, potential customers or target groups, demand trends, or an evaluation of the company's market position.

The disclosure requirements of market participants and companies vary considerably, depending on the country, company size, and legal structure. Generally speaking, the level of detail and scope of published company information has, at best, remained stagnant over the past ten years. Therefore, competitors, for example, are not always fully transparent via secondary sources, and certain workarounds are necessary to assess these companies and the market.

To reliably assess the strengths and weaknesses of relatively opaque companies, data from diverse sources is required. Professional, global company databases and paid tools offer a solution. They also serve to verify and ensure the quality of previously collected data, as public sources and pre-made market studies unfortunately contain a great deal of misinformation about companies and the market.

Relevant information, especially in technology-driven markets, is scattered across a wide variety of data sources, some of which require paid access or have high barriers to entry (databases, trade journals, etc.). This results in a relatively high time investment in some markets for researching, compiling, and analyzing market information. A professional service provider with the necessary market access offers a promising solution. They can help quickly and efficiently obtain the required market data. Furthermore, an external service provider like MEYER INDUSTRY RESEARCH can help clients approach the subsequent steps of the analysis in a structured manner.

Shocks and crises, such as the COVID-19 pandemic or Russia's war in Ukraine, cannot be predicted even by the best research. However, they can have significant impacts on the market, companies within the industry (customers and competitors), sales markets, market potential, and market growth over a forecast period. These limitations must be considered and openly communicated when planning a strategic market analysis. Therefore, strategic market analysis cannot be a crystal ball, even today, but it is a valuable tool for systematically preparing business decisions in a dynamic market.

Conduct market analysis or trust your gut feeling?

Tilmann Betsch, Professor of Social, Organizational and Economic Psychology at the University of Erfurt, says:

“In situations where we have had very positive experiences, we can rely on our feelings. As long as intuition is based on a lot of solid information, it will likely lead us in the right direction. However, when circumstances change and things deviate from the norm, intuitive decisions can be more likely to lead us astray.”

In new and dynamic situations, a systematic analysis of a market is the basis for important decisions for entrepreneurs, strategic decisions in product development, sales and marketing, as well as for larger investments such as a planned market entry.

Consistent and continuous market monitoring , ideally considering the target market and incorporating competitive analysis , is a crucial foundation for business success. This is the only way to identify early shifts in the target group's behavior, such as their adoption of a new technology. Knowledge of the target market also forms the basis for targeted marketing efforts. Furthermore, long-term market and competitor monitoring uncover shifts in market potential within the industry, allowing for the early development of countermeasures and solutions. These are just a few examples of how business strategy benefits structured market analysis

Should you create your own market analysis or have it carried out by experts?

  • experienced employees and sufficient time are available within the company
  • Especially when it comes to important decisions of strategic relevance for the company or high investment volumes associated with the question under investigation, collaboration with specialized market research companies such as MEYER INDUSTRY RESEARCH is recommended.
  • For founders their business idea to the next level , it's also advisable to have the analysis conducted externally to avoid bias—the risk of viewing the market solely through their own lens. This is particularly important in markets with low transparency.

Depending on whether the main objective of the study is to build and expand one's own brand, define target groups, address competitive issues, identify developments, trends and market shares, or raise capital, the content of the analysis can vary accordingly. By focusing on the specific topic, the time and effort required remain comparatively low. MEYER INDUSTRY RESEARCH offers customized, cost-effective solutions specifically for startups.

REFERENCES OF OUR MARKET ANALYSIS AGENCY

Managing directors, sales managers, and strategy and business development managers at over 100 client companies rely on our meticulous market analyses for one key reason: the uncompromising quality and reliability of our market research results.  Our discerning clients also value the personal and open collaboration with our professional market research team in Munich , as evidenced by numerous testimonials – please see for yourself.

Further references

WE ARE YOUR PARTNER FOR SUCCESSFUL MARKET ANALYSIS

“Market analysis, or systematic market analysis in the industrial sector, is a central component of strategic corporate management and the basis for sound decisions regarding products, services, and business developments. It provides reliable information about market structures, market potential, market development, reference markets, global trends and trends within the industry, as well as the target group, demand trends, and the competitive landscape.”.

More and more companies, including those in the industrial sector, are recognizing that comprehensive market analysis is essential for success in increasingly competitive markets. It enables companies to identify opportunities, minimize risks, determine customer needs, and thus maintain their competitive edge in the long term.

We would be happy to be your partner in conducting your successful market analysis!

INDIVIDUAL CONSULTING FOR YOUR COMPANY ANALYSIS

Trustful personal cooperation and the high quality and reliability of our analyses are top priorities at MEYER INDUSTRY RESEARCH.

We would be happy to provide you with an in-depth, non-binding consultation prior to a potential collaboration with a market study, including a personal on-site consultation upon request. We look forward to receiving your inquiry and will be happy to prepare a customized quote for you!

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