Business opportunity analysis is what you need to do when you are choosing a business idea. The goal, so that you can determine whether your business idea is worth running.
Then, how? Stay cool! In this article, we will explain what is meant by business opportunity analysis, and how to do the analysis.
Please read to the end!
What is Business Opportunity Analysis?
Business opportunity analysis is the process of identifying the potential advantages and disadvantages of a business idea that you want to run. This process includes research on market needs, competitors, potential customers, to strategic planning, and how to evaluate them.
This analysis of business opportunities is important for anyone who wants to be successful in running a business in the long term and sustainably. Likewise, by analyzing this business opportunity, every business can develop its business with the right strategy.
6 Objectives of Business Opportunity Analysis
The purpose of business opportunity analysis is to determine the risks and benefits of a business opportunity. That way, it can be known whether a business idea has the potential to be implemented. Here’s the full explanation:
1. Identifying Potential Risks
Every business has risks that can occur at any time. For example, a new type of product appears from a competitor that makes the market no longer need your product. As a result, your business can no longer be run.
However, if you analyze business opportunities, you can identify, minimize, and even address potential risks.
Well, to identify risks, you can do it by recognizing the weaknesses of your business idea. How, you can start by identifying the important aspects of your business. Both internally and externally. Starting from your business management, your product or service, market potential, competitors, marketing strategy, and so on.
After that, you can see which areas of your business are still weak. That way, you can find out what potential risks might occur and how to deal with them.
2. Identifying Market Needs
Conducting a business opportunity analysis can help you identify market needs. For example, you can read market needs by seeing what people need.
The trick, you can do a simple research. For example, see trends by using Google Trends. From there, you can see what products or services consumers are searching for.
In addition, you can also do in-depth research. For example, by seeking information directly from consumers. Either by conducting surveys, interviews, or studying the testimonials of your potential competitors’ customers. That way, you can find out what types of products or services you can offer to answer market needs.
3. Recognizing Competitors
If your business has competitors, chances are that the business idea you are going to run has a market. But how to identify competitors?
You can do this with simple steps as follows:
– Do research to see businesses operating in the same industry as your business idea. The simple way, you can directly do a search on Google by entering the appropriate keywords.
– Identify the types of products or services they offer
– Who buys their products
– How do they do marketing, and so on.
By recognizing competitors, you can see how big a threat or opportunity you can get from a competitor’s business. So, you can also be helped to prepare the right strategy to compete with your business competitors.
4. Recognizing Potential Customers
This business opportunity analysis is done so that you can find out what your potential customers are like. Will potential customers be suitable for your product or service, in what age range they are, what are their needs, and so on.
The trick, you can do research on the target market. For example, you can do some basic things, for example:
– Make assumptions, whether your product will be suitable for all circles or only certain circles
– Find out the problems that potential customers are facing, and determine if your product can solve those problems
– Find out the goals that potential customers want to achieve
– Find out the media or digital behavior of the targeted consumer
– See trends in market needs using analytics tools such as Google Trends
After that, create a buyer persona design to learn the characteristics of your potential customers. Starting from demographics to the habits of your potential customers in shopping.
By identifying potential customers, you can find out what type of product or service they are looking for. So, you can also determine the right potential customers for your business.
5. Determine the Long-Term Strategy
The purpose of business opportunity analysis is to determine the right business strategy so that your business can continue to be sustainable.
This business strategy is used to develop plans and actions that you take to achieve your business goals. For example:
– Define your business vision: Because, the vision is the foundation you will use to develop your target market and business values.
– Determine the goals that your business wants to achieve: For example, to introduce a new product, do branding, or increase revenue, This is done so that your business has focus. That way, you can develop a strategy that will be implemented. For example, marketing strategies and communication strategies with consumers.
– Analyze your business and market: The goal is to find out what are the strengths and weaknesses of your business. So, you can determine a strategy that suits your business potential.
– Identify competitive advantages that differentiate your business from competitors. That way, you can determine how to win the business competition.
– Build a framework or tasks that need to be done by each division: The goal is that your strategy can be carried out well by each division and your goals can be achieved.
So by doing a business opportunity analysis, you can estimate the best and worst potential that could happen to your business. Then, what plans and actions you can take.
For example, in the next 5 years, will your product or service still be used, and what actions can you prepare to deal with it.
6. Define Marketing Strategy
Business opportunity analysis is also carried out to determine a good marketing strategy. So, you can choose the right way to reach consumers.
Well, implementing a marketing strategy, you can do it in the following ways:
– Determine market segmentation to divide the target market according to the group. For example, based on geographic, demographic, psychographic, and others.
– Determine the type of communication or promotion that you will do according to the target market. For example, your form of communication or promotion through TikTok social media. Then you can actively create entertaining content that invites engagement, for example with Live TikTok.
– Define your market positioning to show the difference between your business and other businesses. This is done to win business competition with competitors. For example, you can attract consumers by building a unique and relatable branding.
That way, you can find out what kind of ways you can use to reach consumers. Likewise, the right market with the product and price you set.
Then how to do a business opportunity analysis?
11 Steps How to Do a Business Opportunity Analysis
Here’s a business opportunity analysis method that you can do:
1. Using SWOT Analysis
SWOT analysis is one of the most widely used tools for analyzing business opportunities.
SWOT stands for Strengths (strengths), Weaknesses (weaknesses), Opportunities (opportunities), and Threats (threats).
Well, here is an example of a 4-step SWOT analysis application in conducting a business opportunity analysis:
a. Strength: Find out the points that are unique or positive things that can be the strength of your business idea. For example, business ideas can be run offline and online. So, can benefit from multiple paths
b. Weakness: Find out the aspects that are the weaknesses of your business idea. For example, your business idea does not implement a website marketing strategy. So it is difficult for consumers to find through search engines.
c. Opportunity: See opportunities that you can use to support your business. For example, many SMEs want to create an online store website. So the hosting and domain business idea that you want to run has the opportunity to get a lot of customers.
d. Threats: See potential threats that can occur to your business. For example, your business idea has many competitors and the market competition is difficult. So, it can make it difficult for you to get customers.
From these 4 aspects, you can draw conclusions that can help you develop a business strategy.
2. Understanding the Business Idea
At this stage, you should retrace your business idea. The goal is to strengthen your business concept before moving on to the next stage.
The trick, you can use the business model canvas framework. This business framework has nine elements you need to know. That way, you can more easily understand your business idea. Here’s the full way:
– Define customer segments to identify your potential customers.
– Define value propositions to explain the value and benefits of your product.
– Select the channel type to determine the platform you will use to interact and transact with customers.
– Implement customer relationships to keep customers connected to your business. For example, you can send marketing emails about new product discounts or promotions.
– Get to know your business revenue streams or sources of income.
– Determine what are the key activities or activities that you will do when running your business. For example, managing the website so that it is easily accessible to customers, promoting through social media, and so on.
– Determine key resources to find out the raw material needs to run your business.
– Determine who can be key partners or outside resources who will be involved in the running of your business. For example, if you want to create a website for your business, then you can use a hosting and domain service from Niagahoster. So, it can be said that Niagahoster is one of your key business partners.
– Calculate the cost structure or operational cost plan needed to run your business. For example, employee salaries, advertising costs, packaging, delivery of raw materials, etc.
Well, to make it easier, you can use a business model canvas template.
3. Knowing Market Conditions
Next is knowing the market conditions. At this stage you need to see if your business idea will work with the development of market conditions.
Well, you can do this by doing market research. There are some general steps that you can apply to do market research easily. For example:
– Identify the buyer persona or the ideal type of customer for your business
– Group your potential customers according to their segmentation. For example, typical consumers are students, private employees, to those who include senior workers.
– Do in-depth research with face-to-face interviews with your potential business customers
– Identify and learn how your competitors can thrive in the market
– Analyze your research results, then use the data you get to develop a long-term business strategy
You need to do this, because there are many factors that can change market conditions. Therefore, if you know the market conditions, then your business will be able to run sustainably.
4. Determine the Target Consumer
Customers are an important part of your business. Therefore, you need to have a clear target consumer. The goal, so that you can offer the right product to your target consumers.
Well, you can determine the target consumer in ways such as the following. For example:
– Choose a large number of market segments
– Choose a target market with relatively little competition
– Choose target consumers who are easy to reach
– Choose the type of consumer whose needs match your product
– Choose the consumer class that matches the price of your product
After that, you will get an idea of how to develop a marketing strategy later. Because, you already have a clear target consumer. That way, you can also focus more on developing your product according to your target consumers.
5. Identifying Competitors
Not only knowing the target consumers, but you also need to know who your business competitors are. Why?
Because if you recognize business competitors, then you can easily determine your business strategy. Because, you have an idea which strategy you don’t need to use because competitors fail to do it.
To more easily identify business competitors, you need to group competitors by type.
– Direct Competitors: competitors who offer the same products or services as your business.
– Indirect Competitors: competitors who offer products or services in the same business category as you.
– Replacement Competitor: competitors who offer different products and from different business categories. But more potential for consumers to choose than your product.
Examples like this. Let’s say you create an application to listen to music online. In addition, you equip it with a subscription feature so you can listen to music without the distraction of ads.
– Spotify: is your direct competitor. Because, both can listen to music online and must subscribe to be free of ads.
– MP3 Player: can be your indirect competitor. Because it offers entertainment to listen to music too, but only offline.
– YouTube: including replacement competitors because apart from being able to listen to music, the audience can also watch videos.
Well, if you recognize these three types of competitors, then you can easily identify who your competitors are. So you can find out who has the potential to shift your position in the market. Then what competitors do in marketing their products, and so on.
6. Setting up a Business Model
Next, set up the business model. At this stage, you need to have a concept of how your business will work. For example, will your business target individual consumers or companies?
So, to determine your business model, you need to answer a few questions. For example:
– How is the production process of your product?
– Is your business online or offline?
– How does your business make a profit?
– How is your business interaction process with consumers?
By preparing a business model, you will have a clearer picture of how your business will be built. After that, you can determine how to work and strategies that suit your business idea.
7. Calculating Capital Readiness
Capital is what you need to use to be able to carry out your business idea. Capital in running a business can be in the form of technology, labor, money, and time.
By taking into account the readiness of capital, you can determine several things. For example, how much production or service you can offer, how much each production costs, how much labor you need, and so on.
Therefore, you need to calculate the capital readiness to run your business. The goal is that every operation and resource used can be adjusted to the capital you have. That way, you can avoid the risk of loss if the required business capital is greater than income.
8. Create a Minimum Viable Product (MVP)
MVP is a product created to attract the attention of potential customers. Usually MVP is created with the aim of learning the user experience. That way, products can be developed based on consideration of the feedback received from users.
For example, you might have a food business idea. Furthermore, to find out whether your business will be liked by consumers, then you can create an MVP.
The trick, you can make samples of the food you want to sell. Then, offer the food directly to potential customers. After that, ask for feedback from potential customers for your product.
That way, you can assess whether your business is feasible to run. Apart from that, creating an MVP also helps you to be able to make products that can answer consumer needs.
9. Conduct Evaluation
Next, evaluate your business idea. The purpose of conducting an evaluation is so that you can determine whether your business idea is really feasible to run.
In this way, you can measure the achievement of every step you have taken. For example:
– Count how many of your products are sold
– Calculate how many consumers buy the product
– Calculate how much profit you get from each product
– Count how many consumers are not interested in your product
– Calculate the capital that you use in running your business
– View the feedback you receive from your potential customers
– See how wide the market you have reached and so on
After that, you can repair the weak parts of your business. Likewise, you can improve on the aspects that you have already accomplished.
10. Arrange Re-Planning
After doing an evaluation, you can already see how big the opportunity is for your business idea to be implemented. Therefore, from the results of this evaluation you can re-plan.
Now, from this re-planning, you can create a mature business plan. Because, in this business plan you can already determine your business goals, business concept, types of products or services to be offered, and your business model.
That way, you can make the results of this re-planning a guide in running your business. Starting from decision making to interaction with consumers.
11. Starting a Business
After all the stages are completed, it means that your business idea is feasible. Then it’s time to realize your business!
As a first step, don’t forget to do promotions. Promotion is a way you can market your product or service. The goal is that your business can be recognized quickly and can reach many customers.
Even so, you need to continue to analyze business opportunities as long as your business is running. The goal, so that your business can adapt to all conditions. Starting from changes in market conditions, competition with competitors, to potential risks that can occur.
Are You Ready to Start Your Business?
Now you know that business opportunity analysis is the basic thing you need to do in order to run a profitable and sustainable business.
You also know the right way to do business opportunity analysis. So, whatever type of business you are going to run, the important thing for you to do is get your business online.
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