An opportunity analysis is a great way to determine whether or not your next business opportunity can be profitable. By evaluating the competition, the target market, and the potential for growth, you can get a good sense of whether or not your business has a chance at success.
What would you do if you were looking at several market opportunities in your industry that would either substantially contribute to your business growth, or destroy your business. How would you decide which of your new business ideas to take on?
Instead of jumping into business strategies, let’s do an opportunity analysis.
By the end of this article, you’ll have a better understanding of how to determine if there is indeed a market need for your business idea.
Table of Contents:
- What Is Opportunity Analysis?
- What Is Jobs to Be Done Theory?
- How Can Gap Analysis Help Entrepreneurs Assess Opportunities?
- Why Are Pain Points Important When Exploring New Business Opportunities?
- FAQ’s in Relation to Opportunity Analysis
- Conclusion
What Is Opportunity Analysis?
Most people have heard of SWOT analysis, which is a helpful tool for businesses to use to evaluate their strengths, weaknesses, opportunities, and threats.
But what about Opportunity Analysis?
The goal of opportunity analysis is to identify and assess the attractiveness of a specific opportunity, project, or idea that you want to take on in your business.
When I worked in a corporate environment, we came up with an opportunity analysis form that would help us evaluate and choose new projects.
An opportunity analysis will
- Evaluate any new market opportunity based on how well it supports your business model or criteria.
- Quantifies market demand for your idea, product or service.
- Lists any external factors that might impact the success of your idea.
- Forces you to quantify product or service demand
- Adds information that you can use in your strategic planning
- Lists the current market trends that will impact the success or failure of your idea
Here’s a quick overview of how to conduct an opportunity analysis:
- Criteria: Make a list of the criteria any new opportunity has to meet. Do you need a minimum quantity ordered? Do you need to reach a target audience? Does it have to sell at a specific price?
- Competitive Intelligence: Do a competitive analysis and research competition to see if your idea or opportunity will help you gain competitive advantage and provide something your your customers that your competitors don’t or can’t.
- Functional Resources: What resources will you need to bring this idea to the market? Will the current economic climate support your idea?
- Market Assessment: Potential marketing strategies that you’re going to use to reach your existing market or increase your market share.
- Market Potential: Will this give you access to new markets or is this an existing market opportunity?
- Implement your plan and monitor your results.
Market Opportunity Analysis For Existing Markets
Typically, you use an opportunity analysis to select the right business ideas to move forward with. But what if you want to create something new and come up with a new product or service?
Here are some opportunity analysis ideas for creating your new market opportunities.
What Is Jobs to Be Done Theory?
If you’re looking for a new way to think about marketing and product development, you should check out Jobs to be Done Theory. In a nutshell, this theory states that people don’t just buy products, they hire them to do a specific job.
Jobs to be Done is a product development framework that is a type of market research process. where you identify a target customer and look closely at what outcomes they are looking to create and how they intend to create them.
Here’s a quick process for Jobs to be Done
- Identify your target customers
- Make a list of “jobs” that your target customers are doing. For example, a “job” might be to “send an email newsletter”. There are specific tasks involved in getting that job done. So you can start listing all the tasks involved in getting the job done.
- Put your “jobs” or tasks into categories. You can divide these up into the Main job (send a monthly newsletter) and related jobs (write the newsletter, lay out the newsletter, send to email list)
- Define the alternatives that your customers use to get the job done. Research competitors, look for new competitors.
- Do some market research with customers and find out how important each of these tasks is to their business.
- Find out what your customers ideal and desired outcome is. For example, customers buy shovels because their desired outcome is a hole.
- What outcomes do customers want to avoid?
The Role of Market Research in Opportunity Analysis
There are a few different ways to go about conducting a market opportunity analysis, but one of the most effective is to use customer interviews. This involves talking to potential customers and asking them about their needs and pains.
You can also use market research to identify opportunity. This involves looking at data to find trends and patterns.
For example, you might look at demographic data to see if there is a particular group of people who are more likely to have a need for your product.
Once you’ve identified an opportunity, you can then start to think about how to reach these potential customers and what kind of marketing message will resonate with them.
How Can Gap Analysis Help Entrepreneurs Assess Opportunities?
Gap analysis is a framework that entrepreneurs can use to assess opportunities. It helps them understand what needs to be done to close the gap between where they are and where they want to be.
By identifying the gaps, entrepreneurs can develop strategies to address them and improve their chances of success. While every business is different, there are some common elements that all entrepreneurs should consider when conducting a gap analysis.
These include:
- market analysis – understanding the current state of the market and where your business fits within it.
- customer analysis – understanding your target customer and what they want.
- competitor analysis – understanding who your competitors are and what they are offering.
- product service analysis – understanding your own product or service and how it stacks up against the competition.
- SWOT analysis – conducting a strengths, weaknesses, opportunities, and threats analysis.
By taking the time to conduct a gap analysis, entrepreneurs can develop a better understanding of their business and what they need to do to be successful.
Why Are Pain Points Important When Exploring New Business Opportunities?
As a small business owner, you’re always looking for new opportunities to grow your business.
But how do you know if a new opportunity is worth pursuing?
One way to evaluate a potential opportunity is to look at the pain points it solves for your target market.
In other words, what problem does this opportunity address that your target market is currently facing?
There are a few reasons why pain points are important to consider when exploring new business opportunities:
1. Pain Points Show You Where There Is a Need in the Market.
If you can find an opportunity that solves a pain point for your target market, you know there is a need for what you’re offering. This is a good indicator that there is potential for your business to be successful.
2. Pain Points Help You Understand Your Target Market.
By understanding the pain points your target market is facing, you can better understand their needs and wants. This knowledge can help you tailor your products or services to better meet their needs.
3. Pain Points Can Help You Create a Unique Selling Proposition.
If you can find an opportunity that solves a pain point that your competitors are not addressing, you can create a unique selling proposition for your business. This can help you stand out in the market and attract more customers.
4. Pain Points Can Help You Identify New Opportunities.
As you look at the pain points your target market is facing, you may be able to identify new opportunities for your business. This can help you stay ahead of the competition and find new ways to grow your business.
If you’re looking for new opportunities to grow your business, be sure to consider the pain points of your target market. By addressing the needs of your target market, you can find opportunities with the potential to be successful.
FAQ’s in Relation to Opportunity Analysis
What is Opportunity analysis example?
An opportunity analysis example is a situation where a company or individual assesses a potential opportunity and decides whether or not to pursue it.
This type of analysis typically involves looking at the potential risks and rewards associated with the opportunity, as well as any potential barriers to entry.
What are the steps in opportunity analysis?
The steps in opportunity analysis are:
- Define the problem or opportunity
- Gather information about the problem or opportunity.
- Analyze the information to identify potential solutions or courses of action.
- Select the best solution or course of action.
- Implement the solution or course of action.
- Evaluate the results and make adjustments as necessary
Why is Opportunity analysis important?
Opportunity analysis is important because it allows businesses to identify potential opportunities for growth and expansion.
By conducting an opportunity analysis, businesses can assess the feasibility of new projects or ventures, and determine whether or not they are worth pursuing.
Additionally, opportunity analysis can help businesses to better understand their customers and the market, and to develop strategies for targeting new customers and markets.
Conclusion
Opportunity analysis is a process that entrepreneurs can use to assess the viability of their business idea.
By taking into account factors such as jobs to be done, gap analysis, and pain points, entrepreneurs can get a better sense of whether or not there is indeed a market need for their proposed solution.
