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What is a market opportunity assessment?

Market opportunity assessment, what it is and the growth strategies taken by some household name brands.

A market opportunity assessment is the process of synthesising bespoke research and client data to identify opportunities for growth in a specific market or business area and formulate an actionable strategy to realise this growth.

Opportunities come in many different shapes and sizes. Therefore the pivotal first step towards success is to identify them. Maximising opportunities in a constantly shifting environment and market requires a creative, flexible and methodical approach. Few organisations – no matter whether they are start-ups or corporations – have the time, the resources or the expertise to conduct a broad and thorough market opportunity assessment.

A market assessment will utilise a pragmatic approach that is tailored specifically to the client and the market they operate in, while leveraging tried and trusted research and analysis methodologies.

What kind of organisations should undertake market opportunity assessments?

Market opportunity assessments can (and should) be conducted by all organisations. Any organisation can benefit from identifying opportunities of where and how they can grow their reach and client base.

A good market opportunity assessment is always tailored to the needs and goals of an organisation. It aims to provide as much objective data as possible to verify or signpost growth strategies with the greatest potential. Additionally, when market opportunity assessments include an audience research component and strategic analysis, they will not only identify growth opportunities, but also provide a detailed roadmap of how to achieve these.

Goals/aims… Identify and evaluate… to create comprehensive strategy Who can benefit…
Revenue growth

Increase profit/operating margins

Diversification of revenue

Business expansion / growth opportunities Start-ups and growing businesses

Established businesses


NFP organisations and charities

Public and government institutions
Best ROI for any business development activity (from marketing campaigns to M&A due diligence)
Short- and long-term risk exposure: Evaluate viability of a business going forward (support a diversification strategy and business strategy / Model TAM/SAM/SOM, market share and potential projections given specific company or economic scenarios)
Evaluate and improve current business performance (supports specific product/service delivery and operations improvements, and strategic support for general business improvements (e.g. as a tool to identify which parts of a business should be sold off)

What type of market opportunities are there?

  1. Grow the existing business
  2. Create new business(es)
  3. Grow the reach of existing business
  4. Pivoting during crisis

Although expanding the business is the aim of most organisations, it can be challenging to identify the best strategy to achieve this while sustaining current success.

Market opportunity assessments lay the foundation to identify growth with the highest ROI (return on investment), whether that is through a single opportunity or several.

1. Grow existing business

This is the most straightforward type of growth; relying on a sound understanding of an organisation’s market, customers and competition to identify the areas where an organisation’s prospective growth is well-placed to succeed and the strategy to realise it. This growth may come in the form of an increase in market share, a shift in pricing or geographical expansion.

For example, a market opportunity assessment could identify the locations and merge & acquisition targets for a successful expansion. This research also succeeds in highlighting consumer pain points and competitor performance issues for a gain in market share. On the other spectrum, the assessment can uncover customer needs and behaviours as well as the messaging for a change in pricing that increases margins.

Case Study: Starbucks’ growth strategy

Over the last 5 years Starbucks has leveraged a number of strategies to continue driving growth within their existing, core business. They have achieved this by creating digital initiatives, introducing a new loyalty scheme and continued physical expansion – all underpinned by market and customer research insights. In this way, Starbucks has successfully managed to grow global sales by ~3% and revenue by ~10% year on year in an incredibly saturated market.

Case Study: Lidl’s growth strategy

Lidl’s fast and successful expansion across Europe over recent years, driven by a combination of fierce discounting, effective marketing and an exceptional understanding of their market, is a perfect example of geographical growth. Lidl has done this through optimising its entire operation to be scalable and making strategic decisions based on granular and high quality insights.
At times this has meant doing things differently. Employees are paid a comparably high salary for the retail industry, but have to meet specific performance indicators. In 2017 Lidl’s international operations represented over half of their total revenue with sales of €46 billion and had grown by ~11% per annum since 2012.

2. Create new Business (es)

Growth can be achieved by diversifying and offering new products and services (connected or unconnected to the existing business). Such growth can, for example, be realised by entering uncontested markets (Blue Ocean Strategy ) or through the merger or acquisition of other businesses.

This approach can also ensure a significant diversification of an organisation’s revenue. It has the added benefit of increasing the organisation’s longer-term resilience by limiting revenue exposure to changes in demand for products and services. Typically, this is also the most investment heavy and highest-risk growth, as bringing a product to market or purchasing another business usually requires a sizable outlay, which sometimes fails to provide a return.

Key to success is a thorough market opportunity assessment that formulates a detailed business strategy for the new product or service.
Market opportunity assessments can provide a detailed model and projections in various economic scenarios to quantify the likelihood and rate of returns, as well as detailed roadmaps for marketing strategies, prime M&A targets and flag any major risks (e.g., due diligence).

Case Study: IBM’s growth strategy

In 2010 IBM began a three-year buying spree, driven by an aggressive M&A growth strategy. During this time IBM acquired 43 companies, with each acquisition costing an average of 350 million USD. By integrating and pushing the offering of these companies though their existing, global sales channels, IBM was able to significantly accelerate the acquired companies’ revenues – sometimes by nearly 50% within the first two years of the acquisition.

Case Study: Procter & Gamble’s growth strategy

 The merger of Proctor & Gamble with Gillette in 2005, is a perfect example of growth through a multi-facetted M&A strategy. This merger not only made them the largest consumer goods business in the world, knocking Unilever off its top spot, but also added a number of new products to their portfolio, while also driving global operational and sales growth. As it so happened, Gillette’s and Procter & Gamble’s existing global sales structures complemented each other; Gillette being stronger and better set-up in some markets than Procter & Gamble and vice versa. By combining and leveraging these existing operations and sales channels, Procter & Gamble drove a 25% net sales growth in 2006.

Case study: BMW’s growth strategy

In 2011 BWM launched the car-sharing business DriveNow. Since then, it has grown its operation across 31 cities throughout 14 countries with more than 4 million users. Early 2019, BMW established its service as the market leader through a merger with Daimler’s Car2Go and a rebranding to ShareNow. While the car-sharing model is still in its infancy and profitability requires scale, BMW and Daimler sees this new business as an investment the urban mobility market of the future and have invested €1 billion into developing multi-modal mobility as a service (MaaS) platforms

3. Grow the periphery/ancillary of existing business

With this approach, businesses can achieve growth by identifying value on the edge of existing business (Edge Strategy). This type of growth may come in the form of monetising the existing offering differently, offering variations of current products and services, or creating ancillary offerings.

The aim is to leverage the existing investment in a creative way to minimise risk and maximise ROI for future growth, and thereby maximising potential profits. The identification of edge-opportunities depends on a deep understanding of the market/industry as a whole, the needs and behaviour of the organisation’s customers, as well as the value of the business’s existing offering and assets.

Case study: Amazon’s growth strategy

A significant part of Amazon’s meteoric growth over the last decade is driven by the way it has monetised the periphery of its business. In fact, Amazon’s success is a great example for Edge Strategy [TM] growth: Founded in 1994 as a bookselling website, it is now an e-commerce giant with over 300 million users and worth more than $800 billion USD. While more recent growth has been acquisition-based, the early transition from an online bookstore to general marketplace, as well as their current digital assistant, Alexa, are great examples of successful peripheral growth. Alexa is expected to generate around $19 billion of sales revenue (~5% of Amazon’s total revenue) by 2021.

4. Pivoting during crisis

In early 2020 the process were being redefined quickly due to the Coronavirus pandemic. This meant going back to basics, defining what companies were good at and spotting the signals of the market changes that could be used.

What does a market opportunity assessment entail?

A market opportunity assessment, like all strategic support, is tailored to the specific circumstances, industries, reach, etc. of each client, and can entail all or a mixture of the following elements

Description Commentary
Identifying growth opportunities Market assessment TAM (Total Available Market) Quantifies the total market demand for a product or a service Markets can be assessed in volume and value

Market assessments can be conducted bottom up, top down, or, ideally, as a combination thereof (with a both validating each other)

TAM SAM SOM have different purposes: SOM indicates the short term sales potential, SOM / SAM the target market share, and TAM the potential at scale.
SAM (Serviceable Available Market) Quantifies the segment of TAM within an organisation’s geographical reach and targeted by its products and services
SOM (Serviceable Obtainable Market) Quantifies the segment of SAM that an organisation is likely to capture with its products and services
Trends & drivers Understanding how the market will perform over the next 2-5 years
Market and performance modelling Model future market movement and growth Bringing together all available data (client data, market data, competitor data, trend and driver data) to model an organisations future growth
Increasing resilience Risk assessment Evaluate short- and long-term exposure to risk (at market and operational level) Define a strategy for business resilience and sustainability Future-proof an organisation beyond the usual, 5-year planning horizon (e.g. by improving resilience of operations, diversification of revenue, etc.)
Description Commentary
Insights to realise / generate growth Competitive assessment / benchmarking How an organisation performs compared to its competitors and what the drivers / differentiators of these performances
Audience understanding / customer satisfaction research Understanding customer satisfaction, behaviour, create customer personas
Marketing messages for growth / win market share Actionable insights that inform marketing strategy and ensure a maximised ROI for marketing expenditure

What type of marketing and messaging will be most successful with specific customer (target) groups?

Which marketing channels are most successful?
Customer base mapping / database During a bottom-up TAM analysis, it can often be cost effective to map potential customers and create a database that can be directly leveraged by an organisation’s business development and marketing teams (targeting potential customers)
Competitor mapping / database During a market assessment or competitive benchmarking exercise, mapping / creating a database of competitors can be a cost effective exercise
Identifying and shortlisting of M&A targets or potential partner companies We can also create databases of potential customers, business partners, and shortlist acquisition/merger targets, etc.

Research Methodology Elements: How do you conduct a market opportunity assessment?

The type of research used to identify and evaluate these market opportunities and their various elements breaks into two segments: primary and secondary research. Typically, most market assessments will employ a combination of these two insight generation methodologies.

Primary research:

Qualitative research 

o   F2F

o   Focus groups

o   Tele-depths:
– Sessions can be recorded/viewed by client. Possibility to create montages for presentation, internal training or other purposes
– Can be used to gain a very broad understanding of a subject (markets, customers, etc.)

Quantitative research

o   Surveys (online, phone):
Closed questions, targeted objective (validate specific hypotheses, etc.)

o   Existing client data analysis

Secondary research: 

o   Desk research

o   Tapping into reputable sources to collect:
– Data
– Relevant research/reports conducted recently
– Articles / industry publications to provide colour and underpin things like trends/drivers

The questions to ask yourself to see if you should conduct market opportunity research

Are we basing our current and long-term strategic decisions on objective data?

Are we confident that we are not missing out on market opportunities?

Is my organisation currently facing a challenging market?

These are the questions any organisation should consider. A market opportunity assessment can help with all of these. It provides hard and objective data to underpin strategic decisions, identifies and quantifies new opportunities and creates growth in challenging business environments.
As market opportunity assessments are always bespoke and can be as broad or as specific as a client needs them to be, they not only fit every budget but also add direct and significant value to any organisation.

If you have any questions or wonder whether a market opportunity assessment may help you and your organisation, please get in touch. We’re always happy to hold discussions to see how we might be able to help.
Also don’t worry – for us, a market opportunity assessment has to add specific and actionable value, so during our initial discussion we will be honest and clear about how we can or can’t help you.

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