PowerPoint PresentationSection 6.2Pages 98-103

6.2 Industry and Market AnalysisWhat youll learnHow to research an industryWhat obstacles typically block a new ventures successHow to study a target market

6.2 Industry and Market AnalysisWhy its importantStudying your companys industry and market will help you create a product or service that people want.Studying your companys industry and market will help you understand your chances for success.

6.2 Industry and Market AnalysisKey Termssales potential market share economies of scale barriers to entry brand loyalty proprietary technology

6.2 Industry and Market AnalysisKey Terms (Cont.)market share niche customer profile customer needs analysis

6.2 Industry and Market Analysis Springboard

Predict some technological, fashion, and agricultural changes that might occur during the next decade.

6.2 Industry and Market AnalysisI. LOOKING AT THE INDUSTRYA. Evaluate prospects for success in the market.B. Evaluate the sales potential and the competition.

6.2 Industry and Market Analysis II. TRENDS AND PATTERNS OF CHANGETo determine a business strategy, one must understand where an industry is headed and how it works.

6.2 Industry and Market AnalysisIII. YOUR COMPANY AND THE INDUSTRY

How much of a product a business can realistically expect to sell is called sales potential.

6.2 Industry and Market AnalysisIV. THE NATURE OF YOUR PRODUCTWhat one sells influences how much can be sold.

6.2 Industry and Market AnalysisV. INDUSTRY TRENDSIdentifying trends can help a business predict its product or services sales potential.

6.2 Industry and Market AnalysisVI. SOURCES OF SUPPLYSuppliers can affect costs, products, and sales.

6.2 Industry and Market AnalysisVII. DEMOGRAPHICSDemographics can indicate if an industry is growing, shrinking, or remaining stable.

6.2 Industry and Market AnalysisVIII. BARRIERS TO ENTRYA. Barriers to entry can keep new businesses from entering or succeeding in an industry.

6.2 Industry and Market AnalysisB.New businesses face many obstacles.1. Economies of Scale. Bigger businesses can churn out more products more quickly and cheaply.

6.2 Industry and Market Analysis2. Brand Loyalty. Customers prefer to purchase products and services from companies they know.

6.2 Industry and Market Analysis3. Access to distribution channels.4. Proprietary Technology. A know-how that is owned and often protected by patents.

6.2 Industry and Market Analysis Math Problem

Next years total market toy sales will be $5M. Your projected toy sales are $50,000. What will be your market share?

6.2 Industry and Market AnalysisIX. THE COMPETITIONA.Market share is a portion of the total sales generated by all the competing companies in a given market.

6.2 Industry and Market AnalysisB.A niche is a small section of a market, usually based on specific customer needs.

6.2 Industry and Market AnalysisC.Conduct a thorough analysis of the competition.1. Identify competitors2. Find competitors strength and weaknesses

6.2 Industry and Market Analysis3. Identify competitive advantages

6.2 Industry and Market AnalysisX. LOOKING AT THE TARGET CUSTOMERA.Know the customers.B.Meet the customers needs.

6.2 Industry and Market AnalysisXI. WHAT DO WE WANT TO KNOW ABOUT THE CUSTOMER?A customer profile is a complete picture of a ventures prospective customers.

6.2 Industry and Market AnalysisA. Who are my customers?B. What do they generally buy, and how do they find out about it?

6.2 Industry and Market AnalysisC. How often do they buy it?D. How can my business meet their needs?

6.2 Industry and Market AnalysisXII. WHAT DO MY CUSTOMERS NEED?A customer needs analysis pinpoints which features and benefits of goods or services customers value.

6.2 Industry and Market Analysis

End of Section 6.2

Answers will vary, but might include the advancement of technology, changes in population, and globalization of cultures.Answer: $50,000 / 5,000,000 = .01 = 1 percent