Market Analysis Research
Describe the proposed business. Address the following in your summary:
Articulate the business’s mission and vision statements.
Based on your intended product or service, describe the characteristics of your customer base.
Investigate and list your current competitors. For example, if you’re manufacturing and selling exercise equipment, current competitors would be companies like NordicTrack or Nautilus, Inc. To simplify the process, limit yourself to businesses you are competing directly against. If your business is a local bistro, then your competitors are other local similar restaurants.
Research and estimate the size of your intended market. Market size is the number of potential customers or unit sales for your products/services. Consider the nature of your business when researching market size. For instance, if your business is a local bistro, then your market size is determined by the population within a reasonable radius of the restaurant, say, 5-15 miles maximum. On the other hand, if your business intends to sell a low-weight mountain bicycle online, then the market size is the average number of low-weight mountain bicycles sold nationwide annually.
Estimate the value of your market. Market value is the potential revenues the market has to offer. For instance, suppose low-weight mountain bicycles have a market size of 300,000 units a year with a $500 average price. Then the market value would be $150,000,000.
It can be difficult to estimate market value as you must make assumptions related to market size and average unit price. Use the expected value concept introduced in Chapter 6 of the textbook and the chart below to do the estimation.
Expected Market Value: Mountain Bicycle Scenario
|Assumptions||Probability p(x)||Units (‘000)||Avg. Unit Price ($)||Market Value (‘$000)|
|Expected Market Value (‘$000)||102,110|
Estimate the total addressable market or TAM. This is the fraction of the total market you realistically estimate to get. Most businesses have a relatively modest market share, well under 20%. For example, if we expect to get a 5% share of the mountain bicycle market, then our TAM would be: 0.05 * $102,110,000 = $5,105,500 or approximately $5.1 million.
Based on the information collected, do you feel it is a good idea to continue with the implementation of the business? Explain why or why not.
Cite references to support your assignment.
Format your citations according to APA guidelines.
Business Overview, Mission and Vision
Ford Motor Company’s major intended purpose is to design, manufacture, marketing, and servicing Ford cars, trucks, and Sport Utility Vehicles (SUVs). Its intended market is the USA, UK, Canada and Germany. Ford Motor Company will have a business model defined by various respects. The customer segment is the first model that involves selling vehicles to automotive and parts distributors and commercial companies. Channels as a model will involve the network range and website to enable customers to view the company’s portfolio.
Value propositions involve the quality, brand name, reliability of goods and services, experience and expertise, and marketing strategy. Customer relationship as a model includes the maintenance services, dealership, financial credits and credit sales. Key activities as a model involve the manufacture, marketing, and sale of Ford vehicles and the company’s financing services; key partners will include the suppliers, resources and tools partnerships, and the technological partnerships. Key resources as a model involve the technologies and the intellectual properties belonging to the company; Cost structure is another model that involves administrative and general costs and the research and development activities. Finally, revenue streams as a model comprise the financing (credits and leases) and the company’s automotive services.
Customer base characteristics in line with market analysis can be discussed along with demographics, geographics, psychographics, behavioristic and linguistics. Under the demographics, the company will be targeting the average citizen with an average monthly income, preferably 35 years and below, irrespective of their religion or race. Geographic as a characteristic will involve high-quality manufacturing vehicles with less fuel consumption and adaptable to all types of weather and climatic changes (Ferreras, Hernández & Serradell 2019).
The company will manufacture and offer services with class and comfort suitable to many with an established brand name for both family and commercial purposes under psychographics. The company intends to offer quality and affordable vehicles and services to capture a huge customer base, thereby increasing the frequency of purchase and being reliable during the year’s peak seasons; behavioristic. When it comes to linguistics, the company will develop keywords and phrases suiting the customers to minimize errors arising from spellings and pronunciation and capture the regional difference factor.
This type of industry has many significant customers who provide cheap and affordable vehicles to their customers. Some of the potential competitors are Toyota, Honda, Nissan, Isuzu and Chrysler (Tang et al., 2019). The company’s intended market is the US, Canada, UK and Germany; the market size thereby tallies to 2,422,698 units (US), 279,000 units (Germany), 236, 137 units (UK) and 279,376 units (Canada). On average, the size of the intended market will be 804, 302 units. With USD 26,624 as the average vehicle price, the market value will average at USD 21.41 Billion annually. The company targets 115.43 million people from the intended market with an approximate 20% market share; the total addressable market stands at USD 4.282 Billion.
Considering factors like the intended market, market value, the addressable market, and the industry’s competition, Ford Motor Company stands a chance of thriving super well in the current market. Implementing this business might be a bit costly, but the returns will match the investment, thereby ensuring the company’s subsequent growth. The company intends to manufacture high-quality, affordable, and high technological vehicles at a notch higher than its competitors, making it one of the key determinants of the market trend. With all these factors taken care of, the investor has a mutual obligation to go ahead with the business implementation.
Ferreras-Garcia, R., Hernández-Lara, A. B., & Serradell-López, E. (2019). Entrepreneurial competences in a higher education business plan course. Education+ Training.
Tang, H., Chen, Z., Zhou, G., Li, Y., Avery, K., Guo, H., … & Su, X. (2019). Correlation between failure and local material property in chopped carbon fiber chip‐reinforced sheet molding compound composites under tensile load. Polymer Composites, 40(S2), E962-E974.
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