MARKET ANALYSIS

“Number one, cash is king… number two, communicate… number three, buy or bury the competition.”

– Jack Welch, Former CEO of General Electric

As Thomas Friedman declared in his illuminating 2005 book, The World is Flat. Think about the following few statements. Over the past two years, 90% of all data was created. A college grad working the night shift in Bangalore can answer a morning call to your bank. A disgruntled customer, with a simple social post, can make a dent in the polished brand of a Fortune 500. I can get a factory in China to make just about anything with some design schematics and cash (trust me, I’ve seen it firsthand). And you have no idea from where your next big competitor will emerge from.

More so than at any time in history, strategic leaders must understand and navigate market and competitive dynamics. We don’t live in a time when the slow and steady wins. We live in a time of super-compressed competitive cycles, globalization disrupting cost curves, the blurring of the traditional boundaries between industries and markets, innovation spurring radical progress, and the internet giving anyone a potentially global audience. More so than ever, it is essential to understand market and competitive dynamics.

Here are the top tools and concepts of market analysis:

1. Markets & Competition
Instead of taking a microeconomics course, read this section to learn what you need to know about the theory and takeaways from markets and competition. The content covers supply and demand curves, pricing, and strategic implications.

2. Adoption Curves
Adoption curves provide incredible strategic context to a market throughout its maturity. Learn about the temporal segments of a market, the strategic implications, examples of adoption curves, and how to accelerate an adoption curve.

3. PESTLE Analysis
PESTLE analysis is a comprehensive macro trend analysis of a market or industry. Examining the political, economic, social, technological, legal, and environmental trends that impact a market or industry will create insights you can take advantage of. There is also a helpful and free PowerPoint template to get you started on your PESTLE market analysis.

4. Porter’s 5 Forces
Strategic leaders who understand and analyze a market’s current and future competitive intensity create essential strategic context, enabling them to navigate competitive dynamics better. We review how you assess the current and future competitive intensity by analyzing the power of buyers, suppliers, new entrants, and substitutes. You can also download a free Porter’s Five Forces analysis worksheet.

5. SWOT Analysis
Strategic leaders need to understand their business’s strengths, weaknesses, opportunities, and threats. Strengths and weaknesses in the value proposition, go-to-market, and organizational capabilities should be grounded relative to competition. At the same time, opportunities and threats should be examined from an external lens focusing on markets, customer segments, and geographies. We’ve included some valuable templates and worksheets to get you started on your SWOT analysis.

6. Game Theory
To use a hockey analogy, strategic leaders can move to where the puck is going by understanding the likely competitive move to big strategic decisions. They use game theory to guide their understanding of potential competitive dynamics and responses.

7. Three Horizons of Growth
While markets and companies evolve faster than they did ten years ago, it’s essential to paint a strategic picture of what a company is trying to accomplish over three time horizons. Initially created by McKinsey, the three horizons of growth help frame the direction of a company and market.

8. Ansoff Growth Matrix
Understanding how a value proposition can evolve to fuel growth is essential. Is it time for market penetration, market development, product development, and/or diversification?

Also, check out our 114-page Market Analysis PowerPoint Template, which includes most of these frameworks, and so much more.

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