{"id":111992,"date":"2022-02-17T06:24:33","date_gmt":"2022-02-17T06:24:33","guid":{"rendered":"https:\/\/www.similarweb.com\/corp\/?p=111992"},"modified":"2025-04-02T07:32:48","modified_gmt":"2025-04-02T07:32:48","slug":"what-is-market-analysis","status":"publish","type":"post","link":"https:\/\/www.similarweb.com\/blog\/research\/market-research\/what-is-market-analysis\/","title":{"rendered":"Market Analysis: Definition, Examples, and Methods"},"content":{"rendered":"

Do you know how Tiger Woods became the best golfer of all time? His secret is that he meticulously studies and analyzes the course and the competition before each tournament.<\/p>\n

He knows the number of bushes in each rough and the exact angle variations in each fairway. It’s what allows him to find the perfect move and react to every scenario.<\/p>\n

Now imagine the golf course was the market and you want to conquer it.<\/p>\n

What do you do? You study the landscape and the competition before making your move. You know, you can’t outperform the competition without analyzing the market first. Here\u2019s how.<\/p>\n

\"Market<\/p>\n

What is market analysis?<\/h2>\n

The definition of market analysis is an assessment of a market within a specific industry. It examines all aspects that impact the relevant market, or a segment of it, and evaluates the size, value, and trends.<\/p>\n

For your company’s growth, market analysis means evaluating the market potential<\/a> and your odds against the risks and rivals. Based on the analysis, you develop an effective strategy to win it over.<\/p>\n

The difference is, industry competition is continuous, and you don’t get a time-out to reassess. You need to analyze the markets you want to enter and the market you’re already in, and keep on going.<\/p>\n

But before we jump into the juicy stuff, let’s clarify s few things first. When we say market analysis, it’s not the same as market research<\/a>, market mapping<\/a>, or market intelligence<\/a>, though they\u2019re often used interchangeably.<\/p>\n

How is market analysis different from market research?<\/h2>\n

\"Market<\/p>\n

Market research<\/strong> collects data from the market to understand how it got to where it is.<\/p>\n

Market analysis<\/strong> collects data about the market and aims to understand where it’s going.<\/p>\n

Let us explain.<\/p>\n

When doing market research, you typically interact directly with those involved using market research surveys<\/a>, polls, interviews, focus groups, and observation to gather information. Because research is based on historic data<\/a> up to a specific point, it’s often a one-time or periodic task.<\/p>\n

A strategic market analysis<\/a> might involve market research but also employs external sources that provide quantifiable measures of market activity. In a market analysis, you can keep collecting data as you go. The goal is to be able to predict future developments.<\/p>\n

Another differentiation might be granularity. Conducting market analysis can provide the maximum granularity in a specific area or focal point. You want to pinpoint a competitor’s next move, discover your unique strength at this time, or understand how a current event shifted market forces and how to use it to your advantage.<\/p>\n

There’s no market analysis without market research. But not every market research is done to support competitive market analysis<\/a>.<\/p>\n

Where do market mapping, market intelligence, and market survey fit in? These are elements of market analysis. Market mapping is a visualization of the market based on market research. A market survey is a method used to do research and is often aimed at qualitative insights. Market intelligence refers to the actual collection of information, not the evaluation. Still following? Good.<\/p>\n

Enough beating around the bush; let’s get down to business: how to conduct market analysis that puts you in front of the competition.<\/p>\n

3 main types of market analysis<\/h2>\n

You want to pick a model suited to meet your objectives and fine-tune the methods for your business plan. There are several types and endless variations., but here are three we recommend:<\/p>\n

\"The<\/p>\n

SWOT analysis – Strengths, Weaknesses, Opportunities, Threats<\/strong><\/p>\n

In this framework, you collect information and data to determine the above four factors for your business. Then you weigh strengths against weaknesses and match them with the opportunities and threats.<\/p>\n

For example, a company could have developed a mind-blowing technology, (S) but have limited resources to support extensive marketing campaigns (W). Now you identify opportunities the market offers and threats that could put your business endeavor at risk. Let’s say competitors are passive, not realizing that consumers are hungry for something new (O). On the other hand, there’s a rise in Asian tech companies developing similar solutions at lower cost (T).<\/p>\n

The SWOT model<\/a> can be applied to any business decision. You can analyze competitors to better understand their position in the market or various market segments<\/a> to get a granular view of what’s really going on. You can analyze websites, marketing campaigns, and even internal processes.<\/p>\n

\"Market<\/p>\n

With the Market Quadrant Analysis tool, you can easily identify the market leaders and rising players in your market to benchmark your company’s strengths relative to your competitor\u2019s weaknesses. Here we can see that CNN.com has the largest audience with 350M in the last three months in the United States, but NY Times and USA Today have seen the faster growth in terms of MoM change.<\/p>\n

PEST analysis \u2013 Political, Economical, Social, Technological<\/strong><\/p>\n

In this model, you look at the market from a different angle to gain a different perspective. The PEST analysis aims at evaluating the forces that determine the direction of a market.<\/p>\n

It relies on the presumption that business success isn’t solely the result of performance and competitiveness. Take the health and financial industries, for example, which are heavily regulated by government agencies. Compliance plays a significant role in business decisions and has financial implications.<\/p>\n

When it comes to social influences, think of the growing demand for diversity, equality, and inclusion, not to mention sustainability issues that affect competition and development.<\/p>\n

Porter’s Five Forces analysis<\/strong><\/p>\n

This is another method that analyzes the forces impacting an industry and its players. The goal here is to assess how competitiveness and profitability are related.<\/p>\n

The underlying assumption is that the more competitive the market, the lower its profit potential. The five forces describe the factors that influence both competitiveness and profitability:<\/p>\n