Understand the market

Imagine you are preparing for a big race- that requires knowing your own strengths as well as understanding that of your competitors strengths which can give you an edge to win. The same goes for businesses. In a competitive market, understanding the landscape helps you spot opportunities, target the right audience, stand out from competitors, and optimize your strategies.

1. Market research

There are two ways to go about market research-

1. Understanding trends and tailwinds
2. Understanding competitors

Trends and tailwinds

• Trends highlight shifts in market behaviour and consumer interest, tracked via tools like Google Trends to spot emerging demand.
• Tailwinds are external factors, like government initiatives (e.g., India’s "Digital India"), that drive business growth.
• For example, Ola Electric noticed big trends like the government supporting electric vehicles (EVs), more people wanting eco-friendly transport, and India’s push for cleaner energy. This helped them align their products with what the market wanted and what the government was encouraging, boosting their growth in the EV market.

Competitor analysis

• Competitor analysis examines their marketing, pricing, products, and online presence to spot gaps and opportunities.
• For example, Zomato closely watches what competitors like Swiggy are doing—whether it's new features in their app, changes in pricing, or marketing campaigns. By analyzing this, Zomato can spot gaps in the market or find new opportunities to improve their service, stay ahead of the competition, and attract more users.

Table to help you with competitor analysis is given within your project format, please refer to that.

2. Market sizing

Its essential to lay a solid foundation by understanding the market size where your business will operate. Think of market sizing as the first step in mapping out your business journey.

Let’s assume you want to build a fitness app. How would you know how many people would actually use it?

This is when you would conduct market sizing, to estimate the total population who might be interested in a fitness app. Maybe start with all the adults in India, narrow it down to the health-conscious category, further down to those who actually work out and track their diets.

This would go on for a greater and in-depth understanding of the market you would actually cater to.

Here's a breakdown of the three major types of market sizing:

📌  Check out this video to understand how to calculate your TAM, SAM, SOM

📌  Check out this resource to calculate your TAM, SAM, SOM.