When preparing
a business plan for fresh Start-Ups, I often ask the following questions:
- What do you
know about the industry you want to enter?
- Who are the
players in the industry?
- What is the
current trend in the industry?
Simple questions
you may say, but I have never received a direct and confident response from any
of them. Many people are certain that they will succeed in business because
they have the money or they are very passionate about what they want to do. However,
in today’s ever changing world, money and talent are not just enough for you to be in
business, you need a mental compass of where you are going, those that you will
be up against, what advantages or challenges you are likely to face so you don’t
get swallowed or missing in the market. Only an industry analysis will provide you such information.
Many small
businesses are actually missing in the market because they underestimated the
need for proper industry analysis. Industry analysis is not about knowing your customers or audience but its about knowing other competitors and what they are doing. A good industry analysis -
- helps you to
identify the un-served market;
- identifies a
segment you can profitably serve;
- identifies a
niche that is tangible;
- helps sharpen
your business focus;
- strengthens
your strategy;
- exposes the weaknesses
of your competitor’s strategy;
- identifies
the best market entry mode for you;
- tells you what type of pricing method to adopt;
- makes your
product or service significant to your audience;
- and shows
you at what level you can comfortably do business without suffocating.
Unfortunately, many have failed
to analyze the industry very well hence their lack of presence in the market, and the
struggle to get notice by the consumers. They had no idea of the intensity of
the competition they were likely to face, unsure and unclear about the market segment,
displayed low quality competitive edge, and more importantly, failed to identify
the variables that will best differentiate their business.
You can’t
compete in a battle when you don’t know your opponents
You need to
identify companies your business cannot challenge yet in the market, and
strategically avoid direct competition with them. Understanding your industry, its
players, current technology and the industry trend saves you the embarrassment of
being in the market and yet no one can find you.
Analyze your
industry before you make a move so that you don’t get missing in the market.
