Market Analysis Research

Wk 3 Market Analysis Research
Section 1 – Business overview, mission and vision
Describe a proposed business of your choice. Address the following in your summary:

· What type of product/service will it offer?

· What is the intended market?

· What is the business model?

Articulate the business’s mission and vision statements.

Section 2 – Market analysis 
Based on your intended product or service, describe the characteristics of your customer base.

Investigate and list your current competitors. For example, if you’re manufacturing and selling exercise equipment, current competitors would be companies like NordicTrack or Nautilus, Inc. To simplify the process, limit yourself to businesses you are competing directly against. If your business is a local bistro, then your competitors are other local similar restaurants.

Research and estimate the size of your intended market. Market size is the number of potential customers or unit sales for your products/services. Consider the nature of your business when researching market size. For instance, if your business is a local bistro, then your market size is determined by the population within a reasonable radius of the restaurant, say, 5-15 miles maximum. On the other hand, if your business intends to sell a low-weight mountain bicycle online, then the market size is the average number of low-weight mountain bicycles sold nationwide annually.

Estimate the value of your market. Market value is the potential revenues the market has to offer. For instance, suppose low-weight mountain bicycles have a market size of 300,000 units a year with a $500 average price. Then the market value would be $150,000,000.

It can be difficult to estimate market value as you must make assumptions related to market size and average unit price. Use the expected value concept introduced in Chapter 6 of the textbook and the chart below to do the estimation.

Expected Market Value: Mountain Bicycle Scenario 
Assumptions 

Probability p(x) 

Units (‘000) 

Avg. Unit Price ($) 

Market Value (‘$000) 

Expected Market Value (‘$000)

Pessimistic 

0.2

100

450

45,000

9,000

Most Likely 

0.5

100

500

50,000

25,000

Optimistic 

0.3

100

550

55,000

16,500

Totals

1.0

300

500

150,000

50,500

Expected Market Value: Scenario 
Assumptions 

Probability p(x) 

Units (‘000) 

Avg. Unit Price ($) 

Market Value (‘$000) 

Expected Market Value (‘$000)

Pessimistic 

0.30 

200 

450 

90,000 

27,000

Most Likely 

0.50 

300 

500 

150,000 

75,000

Optimistic 

0.20 

375 

550 

206,250 

41,250

Totals

1.0

875

500

446,250

143,250

Calculations:

Probability, P(x) must sum to 1.0 (100%)

Market Value = Units * Ave. Unit Price ($)

Expected Market Value = Market Value * Probability

Estimate the total addressable market or TAM. This is the fraction of the total market you realistically estimate to get. Most businesses have a relatively modest market share, well under 20%. For example, if we expect to get a 5% share of the mountain bicycle market, then our TAM would be: 0.05 * $102,110,000 = $5,105,500 or approximately $5.1 million.

Section 3: Recommendation
Based on the information collected, do you feel it is a good idea to continue with the implementation of the business? Explain why or why not.

Cite references to support your assignment.

Format your citations according to APA guidelines.

Copyright 2021 by University of Phoenix. All rights reserved.

Copyright 2020 by University of Phoenix. All rights reserved.

DAT/565 v3

Copyright 202

1

by University of Phoenix. All rights reserved.

Wk 3

M

arket Analysis Research

Section 1

–

Business

overview, mission and vision

Describe

a

proposed business

of your choice

.

Address the following in your summary:

·

What type of product/service will it offer?

·

What is the intended market?

·

What is the business model?

Articulate

the business’s mission and vision statements.

Section 2

–

Market analysis

Based on your intended product or service, describe the

characteristics of your customer base.

Investigate

and list your current competitors. For example, if you’re manufacturing and selling exercise

equipment, current competitors

would be companies like NordicTrack or Nautilus, Inc. To simplify the

process

, limit yourself to businesses you are competing directly against. If your business is a local bistro,

then your competitors are other local similar restaurants.

Research

and estimate the size of your intended market. Market size is the number of potent

ial

customers or unit sales for your products/services. Consider

the nature of your business when

researching market size. For instance, if your business is a local bistro, then your market size is

determined by the population within a reasonable radius of

the restaurant, say, 5

–

15 miles maximum. On

the other hand, if your business intends to sell a low

–

weight mountain bicycle online, then the market size

is the average number of low

–

weight mountain bicycles sold nationwide annually.

Estimate

the value

of your market. Market value is the potential revenues the market has to offer. For

instance, suppose low

–

weight mountain bicycles have a market size of 300,000 units a year with a $500

average price. Then the market value would be $150,000,000.

It can b

e difficult to estimate market value as you

must

make assumptions related to market size and

average unit price. Use the expected value concept introduced in Chapter 6 of the textbook and the chart

below to do the estimation.

Expected Market Value: Moun

tain Bicycle Scenario

Assumptions

Probability p(x)

Units (‘000)

Avg. Unit

Price ($)

Market Value

(‘$000)

Expected

Market

Value

(‘$000)

Pessimistic

0.2

100

450

45,000

9,000

Most Likely

0.5

100

500

50,000

25,000

DAT/565 v3

Copyright 2021 by University of Phoenix. All rights reserved.

Wk 3 Market Analysis Research

Section 1 – Business overview, mission and vision

Describe a proposed business of your choice. Address the following in your summary:

 What type of product/service will it offer?

 What is the intended market?

 What is the business model?

Articulate the business’s mission and vision statements.

Section 2 – Market analysis

Based on your intended product or service, describe the characteristics of your customer base.

Investigate and list your current competitors. For example, if you’re manufacturing and selling exercise

equipment, current competitors would be companies like NordicTrack or Nautilus, Inc. To simplify the

process, limit yourself to businesses you are competing directly against. If your business is a local bistro,

then your competitors are other local similar restaurants.

Research and estimate the size of your intended market. Market size is the number of potential

customers or unit sales for your products/services. Consider the nature of your business when

researching market size. For instance, if your business is a local bistro, then your market size is

determined by the population within a reasonable radius of the restaurant, say, 5-15 miles maximum. On

the other hand, if your business intends to sell a low-weight mountain bicycle online, then the market size

is the average number of low-weight mountain bicycles sold nationwide annually.

Estimate the value of your market. Market value is the potential revenues the market has to offer. For

instance, suppose low-weight mountain bicycles have a market size of 300,000 units a year with a $500

average price. Then the market value would be $150,000,000.

It can be difficult to estimate market value as you must make assumptions related to market size and

average unit price. Use the expected value concept introduced in Chapter 6 of the textbook and the chart

below to do the estimation.

Expected Market Value: Mountain Bicycle Scenario

Assumptions Probability p(x) Units (‘000)

Avg. Unit

Price ($)

Market Value

(‘$000)

Expected

Market

Value

(‘$000)

Pessimistic 0.2 100 450 45,000 9,000

Most Likely 0.5 100 500 50,000 25,000