market industry analysis - lunds universitet...a1 market –the present situation »description...

Market and Industry AnalysisSVEN OLSSON, LU INNOVATION

Market Analysisor

Market Industry Analysis

© LU Innovation 2015, SOL

Did you read thetextbook?

Optimistic?

Why do a 7 domain test?


1. Opt out early (save time and money)

2. Ask important unanswered customer questions

3. Jump start the Business Planning process

4. Reduce risk

”By failing to prepareyou prepare to fail”

Benjamin Franklin

So far NABC N B CA


» N important – not enough

» Depends on A (unique)

» A must have B/cost

» How well does this compare to C

Business model

» The NABC look good!

» How will we make money!

» The Business logic

5

Is the idea feasible?

» Road test perspective

– External – Internal

» External – “The world”

– Market (Buyers) / Industry (Sellers)

– Micro (μ) / Macro (Μ)

» Internal – “You”

– The team, aspirations, abilities, value chain


Road test


Road Test

External

Marketμ

M

Industryμ

M

Internal Team

Aspirations

Execute CSF

Value Chain

External, 2 dimensions»Market – Industry

»Micro – Macro

»4 fields


Market Industry

M

μ

The seven domains

Part 1ΜICRO MARKET

B1 Customers, general– Who and where are the customers?

– How many?

– How dependent is the company of (a) certain customer(s)?

– Customer’s decision process

– Capability to pay

– Price sensitivity, purchase amount

– How to tie the customer to the company?

»Contract, subscription, updates


B2 Most important customer(s)» Which customers are the most important?

» Few customers, how to handle the risk?

» How is the customer dependent on the Company?

» Describe the sales process


B3 Customer benefit» What need do we satisfy? (“Important problem”)

» How are we better than the competitors?

» How do we get feedback from the customers?

» What alternatives does the customer have?


D1 Business model, examples

» Printers, color cartridges

» Elevators

» Cellular phones

» TetraPak

» ECOS, heater process control

» Leasing

» Christer Ericsson fixation belt» 24kr*135%=32,40 cp. 175kr -> 167,25


D2 Pricing» Market price

» Penetration pricing

– (Low price for vast spreading)

– Example: Media Markt?

» Skimming pricing

– (High price at start for high gros margin)

– Example: Apple, Cars, Hi-Tech

» Difficult to increase price significantly

– (Easy to decrease discount)© LU Innovation 2015, SOL

D3 Sales» Build global sales organization (expensive)

»Whole sale dealer, Agents, Retailers

»Web shop, Mail-order

» Segmentation– Geographic division

– Customer type

– Submarket

» Exclusive contract– combine with minimum quantities

D4 Distribution» Retailer

» Agents

» Franchising

» Whole sale dealer

» Shops (owned by the company)

» Employed salespersons

» Web shop, mail order

» Call center© LU Innovation 2015, SOL

Margins, retailer

Medicine 33%Textile fabrics 50%Sports equipment 30-40%New cars 10-16%Cellular phones 10-20% (previously

50%)

Supermarket (groceries)

25-30%


Margins, whole sale

Medicine 9%Groceries and beverages

5%


Margins, manufacturer

Medicine 58%Computers (PC) 10-15%Apple (previously) 50%Computers (servers) 20-25%

Source: Affärsplanering -en handbok för nya tillväxtföretag, McKinsey&Company, Ekerlids förlag, 2005


D5 Service» Service level important for re-purchase frequency

» Who makes the service

– Supplier

– Retailer

– The Company

» Quality of service

» Post market


D6 Marketing

» Conventional Advertisement

– Papers, periodical, radio, TV, The Internet

» Direct marketing

– Direct mail, telephone sales, The Internet

» Media

– Editorial articles, press releases, directed information

» Exhibitions and fares

» Customer visits © LU Innovation 2015, SOL

Part 2ΜACRO MARKET

A1 Market – The Present situation» Description

– Consumer clients/ Business clients

» B2A, B2B, B2C, B2D, B2G

– Conservative/Dynamic

– Size, potential growth

– Segments, Target groups, Localization

– Delimitation of the market

– Other properties

» The positioning

– Present situation

– Target positioning© LU Innovation 2015, SOL

A2 Market – The Future» Maturity

» Market share, forecasts

» Threats?

– How to overcome?

» Specific opportunities, potentials

» Factors that influences the development


A3 Market – trends» Fashion trends

» Seasonal dependence

» Market dependence

– Boom, recession, ...

» Other visible trends

– Advantages

– Disadvantages


Part 3ΜACRO INDUSTRY

How Attractive is the Industry?

» Define the threats – high / low ?

» Low threats means attractive Industry

» Ex. Restaurant business: Easy to enter

» Means high threat of entry

» Means not attractive industry

» Ex. Silicon Memory Chip Manufacturing

Michael Porter’s 5 forces

1. Threat of entry

2. Supplier power

3. Buyer power

4. Threat of substitutes

5. Competitive rivalry

1. Threat of entry – Easy to enter?

2. Supplier power – Supplier sets terms and conditions?

3. Buyer power – Buyer sets terms and conditions?

4. Threat of substitutes – easy to substitute to steal my market?

5. Competitive rivalry – is rivalry intense or genteel?

1. High barriers to enter

2. Weak supplier power

3. Weak buyer power

4. Little threat from substitutes

5. Little competitive rivalry

What does it mean?What do entrepreneurs want?

Threat of entry

No threatHigh

All questions are found in chapter 14

Part 4ΜICRO INDUSTRY

C1 Who are the competitors?1. Who are the main competitors?

– Owners

– Turnover, Sales volume, profitability, debts

– Weaknesses, previous mistakes

– Distribution channels

– Price, offer, service


C2 Competing products» Offer

» Product function

» Reliability, durability

» Environmental impact, sustainability

» Design

» Delivery reliability

» Service

» Price

» Financing (leasing, interest free purchase)


C3 Rights, patents, licenses» Trademarks

» Registered design

» Copyright

» Patent

» Licenses

» Goodwill

» Reputation


C4 Reactions at product launch

» Prepare for counter action

» Price reduction

» Suppliers

» (Counter-)Market campaigns


Workshop today

» Evaluate 4 first domains

» Write 2-4 page describing your business

» (rest will be homework)

That´s it!

more questions ...?

market industry analysis - lunds universitet...a1 market –the present situation »description...

Documents