MARKET ANALYSIS – TIPS AND PRACTICAL EXPERIENCE

Why do you need a market analysis?

Market analysis fact sheet

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 you to position your company successfully in the market, to make targeted use of new opportunities in the market and to be prepared for future requirements.

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

Market analysis fact sheet

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

What is a market analysis? A market analysis examines a regionally and objectively defined market in a structured manner based on defined evaluation criteria .

The criteria examined are typically general market data such as market volume/market size, growth/market 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 and weaknesses, as well as its opportunities and threats, within the market. It can cover an entire market or a specific niche and can be conducted by established companies or as part of a startup.

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

The adjacent fact sheet shows an example 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 trends in the market .

A market and competitive analysis provides a structured overview of market opportunities and risks fact-based assessment of potential strategic market development options for the company, enabling it to operate profitably and sustainably in the market. Ideally, it therefore serves as a compass for company management , enabling targeted management in a dynamic and rapidly changing market.

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

Systematic market analyses are therefore particularly valuable where markets, competitors, and customer requirements are undergoing significant and dynamic change . This change leads to the disruption of established structures, new opportunities and risks, and therefore reliable information is particularly relevant.

Even though the term "disruption" is certainly overused, the current changes are leaving hardly any industrial company untouched. Attractive opportunities are currently emerging in the following sectors, for example:

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

Digitalization and automation of production are leading to new business models in the mechanical engineering market. Mechanical engineering companies are evolving from hardware suppliers to full-service providers with digital business models that combine hardware, software, and digital services.

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

 

The continued increase in the use of renewable energy sources, increased decentralization, and intelligent control of consumers are key trends in the energy technology market. Grids will continue to expand as electrification increases, leading to significant investments in future technologies. This creates attractive market opportunities for innovative companies in 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 evaluates all available information on the target market, company and competitors, customers and customer requirements, as well as market developments and trends. This includes 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 only on existing data, which means that the potential of, for example, very new products or services can only be assessed to a limited extent.

Primary market research methods involve gathering information about the target market. Various forms of surveys or data collection are used for this purpose, including interviews (in person, by telephone) and online data collection. These methods are relatively time-consuming and costly, but they allow for the evaluation of a new product idea, for example, in the context of a company start-up. Specialized market research institutes offer appropriate resources and tools as a service for conducting primary market research.

The goal of a systematic market analysis is to create comprehensive, up-to-date, and realistic

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 market entry, market trends, success factors, and opportunities and risks.

"Current" means that market research provides the most recent data and information possible. Ideally, the analyses should be no more than one or two years old; especially in highly dynamic industries, key figures and competitor data must be up-to-date.

realistic means that the analysis of market size and competition, in particular, is fact-based and not driven by wishful thinking. In practice, the potential of a market is often overestimated, and the capabilities 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 or industry analysis should be structured and systematic. We suggest a basic structure and division of the report into seven central chapters , with the exact structure and scope depending on the objective and initial situation:

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

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

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

(4) Competitive analysis : Analysis of the competition, competitor metrics, solutions (products and services), and success factors of competitors, marketing strategies. Identification of strengths and weaknesses.

(5) Customer analysis and analysis of the target group/customers, customer behavior, and brand loyalty. Identification of barriers to market entry 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 necessary, derivation of sales planning or business plan, potential partners for market entry, required internal resources, and determination of next steps.

When it comes to this question, a clear distinction must be made between B2C and B2B markets:

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

In contrast, in the B2B (business-to-business, business-to-business) sector, often few directly 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 audience can only be obtained through a customized market analysis. This analysis is created for your industry and products and allows for the best possible identification of your individual goals, questions, and relevant information.

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 first need two things:

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

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

If sufficient time and expertise are lacking, specialized agencies like MEYER INDUSTRY RESEARCH can assist with the preparation of systematic market research. With their experience in many similar projects, these agencies can also help you better evaluate market research results and derive the right conclusions and actionable implications from the data.

A systematic market analysis can be conducted both internally and 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 options/access to data sources and databases does the company offer?

(2) Founding of the company (many years of experience) and background of the founders

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

(3) Customer service and offer

What products and solutions does the partner offer? What is the turnaround time? How much does the service cost? Are individual project steps coordinated with the client?

MEYER INDUSTRY RESEARCH will be happy to support you with your individual market analysis and prepare a customized offer for your requirements.

The cost of a market analysis depends heavily on factors such as scope, regional focus, the content being examined, and other circumstances. Typically, the required budget for professional market analyses ranges between €5,000 and €50,000 net. MEYER INDUSTRY RESEARCH would be happy to provide you with a customized quote. Funding opportunities are available for start-ups, for example, through the EXIST/ZIM or LIB funding programs.

HOW TO CREATE A MARKET ANALYSIS (Market Analysis Procedure)

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 significantly improved, so that the experienced analyst today has options at his disposal that were unimaginable 10 years ago.

However, 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 markets with a particularly niche character, there is still relatively little reliable information, statistics, data, and forecasts available in secondary sources. Even the best research tools can only draw on a very limited pool of information in certain subject areas.

In these cases, the assessment of market experts and market participants plays a special role, e.g., through the inclusion of expert interviews. Experts can be market participants as well as representatives of universities, associations, or chambers of commerce and industry. Primary research provides deeper and more reliable information about the market than purely secondary analysis. The 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 assessment of the market position.

The disclosure obligations of market participants and companies vary greatly depending on the country, size structure, and legal form of the company. The level of detail and scope of published company information have tended to fluctuate at best over the past ten years. Therefore, competitors, for example, are not always fully transparent through secondary sources, and certain workarounds are necessary to evaluate these companies and the market.

In order to reliably assess the strengths and weaknesses of relatively opaque companies, data from various sources is required. One solution here is professional global company databases and paid tools. These also serve to verify and quality-assure previously collected data, as public sources and pre-fabricated market studies unfortunately also contain a great deal of inaccurate information about companies and markets.

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 expenditure in some markets for researching, compiling, and analyzing market information. A professional service provider with the necessary access to the market promises success here. They can help access the required market data quickly and efficiently. Furthermore, an external service provider such as MEYER INDUSTRY RESEARCH can help clients approach the next steps in the analysis in a structured manner.

Shocks and crises, such as the coronavirus pandemic or the Russian war of aggression in Ukraine, cannot be predicted even by the best studies. However, they can have significant impacts on the market, the companies in the industry (customers and competitors), sales markets, market potential, and market growth for a forecast period. These limitations must be considered in advance and openly communicated when planning a strategic market study. Therefore, even today, strategic market analysis cannot be a crystal ball, but it can be a useful tool for systematically preparing business decisions in a dynamic market.

Should you conduct a market analysis or trust your gut feeling?

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

"In situations where we have very positive experiences, we can also rely on our feelings. As long as intuition is based on a lot of solid information, it is likely to lead us in the right direction. When circumstances change and things deviate from the norm, however, 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 consistent market monitoring , ideally taking the target market into account and including a competitive analysis , is a key foundation for business success. Only in this way can movements in the target group, for example, toward a new technology, be identified early on. Knowledge of the target market also forms the basis for targeted marketing efforts. Likewise, long-term market and competitive monitoring uncover shifts in market potential within the industry, allowing countermeasures or solutions to be developed early on. These are just a few examples of how business policy benefits from the information provided by a structured market analysis .

DO YOUR MARKET ANALYSIS YOURSELF OR HAVE IT CARRIED OUT BY EXPERTS?

  • If your company has experienced employees and sufficient time available, a market and competitive analysis can generally be carried out by your own resources with good planning.
  • Especially when it comes to important decisions of strategic relevance for the company or high investment volumes that are associated with the issue being investigated, cooperation with specialized market research companies such as MEYER INDUSTRY RESEARCH is recommended.
  • For founders who want to take their business idea to the next level , it's also a good idea to outsource the analysis to avoid "bias," or the risk of viewing the market exclusively through their own lens. This is particularly important in markets with low market transparency.

Depending on whether the primary objective of the study is to build and expand a company's brand, define target audiences, address competitive issues, identify developments, trends, and market share, or raise capital, the content of the analysis can vary accordingly. By specifically addressing the focused 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 more than 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 demonstrated by their 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 on 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 position of the competition.

More and more companies, including those in the industrial sector, are realizing that comprehensive market analysis is essential for success in increasingly competitive markets. It enables companies to identify opportunities, minimize risks, identify customer needs, and thus assert themselves 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 , 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!

GET ADVICE NOW!