A market opportunity is a possibly promising condition, in which a company can take advantage of a product’s increased demand or changing trend in a market that the business’ competitors have not yet discovered. For a market opportunity to exist, a business must be able to identify the size of the market, prospective customers, their specific needs that should be met and the business’ capacity to capture the market share.
Exploring a new market opportunity can be challenging for business, but also exciting. It is usually the time for the business to investigate the customers’ problems or needs and assess how large the market opportunity might be for the business to meet the customers’ needs.
How to explore a market opportunity
Identifying the target market – in this stage, the characteristics of the target market are defined, and this happens through describing the demographic, geographic and behavioral profile of the target market. In addition, influencers, motivators, and goals of the target market can be considered.
Scoping the market problem – this is the identification and description of the target market’s issues which require being
Calculating the market opportunity – here you calculate the financial benefits of the ways in which the business can solve the problems in the target market. The value of the market opportunity to the business can be quantified by calculating the market’s volume, multiplied by the estimated value of the benefit to the buyer through solving the problem.
Other considerations to make when deciding on whether to pursue a market opportunity is the time in which the value of the market opportunity may be derived for the business and whether the competitive advantage of the opportunity is sustainable.
If the business is convinced that the market opportunity is enough, and can be pursued at this stage, then the data and benefits collected can be used to prepare the business on how it can offer a solution to the target market.