Business Plans 4: Market Research Tools

While conducting market research for your business concept, there are two tools that can dramatically assist you in finding your results. These are known as the 'S.W.O.T. Analysis' and 'Porter's Five Forces' model.

The S.W.O.T. Analysis
The S.W.O.T. Analysis assists a business/business concept by analysing four areas:
  1. Strengths
  2. Weaknesses
  3. Opportunities
  4. Threats

The objective is to find out aspects of your business with the view to doing the following:

  • Maximise the strengths
  • Turn weaknesses into opportunities
  • Turn opportunities into strengths
  • Minimise threats.
There are two environments that will affect your business, these are the internal and the external environments. Strengths and Weaknesses deal with the internal operations of your business, and how you are in relation to the market. Opportunities and threats deal with the market environment, while allowing you to spot potential aspects to capitalise on while also being cautious of various issues that may arise. Complete a S.W.O.T. analysis on your business opportunity and the market it is involved in.

Porter's Five Forces Model

Porter's Five Forces is a useful model for analysing the business environment that your business is entering into. It analyses several areas of business, including:

  • New Entrants to Market.
  • Market Competitors.
  • Market Suppliers.
  • Market Buyers.
  • Market Substitutes.
The objective is to get a better outline of the industry you are planning to go into by analysing five major areas. By analysing what currently exists in the market, you are better able to position yourself with a competitive advantage (or a unique selling distinction) within the industry.

Study further into these tools and practice implementing them in your business plan.

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