3.1. Market & Competition

3.1.1. Market research and market analysis

Anyone who wants to sell something must know the market. He must know about the nature and extent of the demand, about the attitudes and habits of the customers, about the ways and means of selling, about the competitors and about the causes of the constant changes in the market. Only customers give a company its raison d'être. They decide on the success in selling the products and services. A good knowledge of the market with an analysis of the customer potential and the competitors are among the success factors of the company.

When founding or taking over a company, market research seems indispensable. Constant market research is also necessary for the further development of a company. This means observing the market continuously and systematically. In market research, the market is continuously examined for its changes and developments.

For certain occasions, such as the preparation of a business plan, a market analysis is a sufficient instrument that focuses on a targeted one-time examination of the market at a certain point in time. The market analysis must collect the basic information that is necessary for the company to compete. The market analysis is an up-to-date examination of the market. The aim is to determine whether and to what extent the sale of a product and a service is possible.

If you want to describe the market, you can first conduct amarket reconnaissance. This can be done by talking to potential customers, suppliers, at trade fairs and exhibitions, by reading business reports, trade journals or by researching on the internet. It is about assessing the sales potential of one's own range of services.

Finally, the business plan is about making amarket forecast in which the medium-term market and sector development for the company are assessed and evaluated. For the business plan, this is three to five years.

It makes a crucial difference to a company's chances of success whether an industry is in growth or in a downturn. While demand tends to increase in growth phases, it decreases in recession. The sales forecast will be affected by this. A company is always in a certain competitive situation. When demand decreases, competitive pressure increases. It can turn into cut-throat competition. Another form of competition is to compete against a company with a dominant position or even a monopoly. In the best case, a company is the sole supplier, otherwise it may be one of many. Buying a company is also an option from a competitive point of view.