Entrepreneurs are particularly good at spotting gaps in the market, but not everyone can do it. Identifying market opportunities is competitive and whoever gets there first tends to reap the rewards.
With your business model canvas in place, prototype tested with your target audience, we share ways to get a head start and define new opportunities within your market in the UK and abroad…
Types of market opportunities
A market opportunity is a newly identified need that a company can use to grow; usually, because it’s not being addressed by competitors… yet.
As an entrepreneur at an innovation start-up or scale-up, you may be looking for opportunities to grow, expand your market share, enter into new or larger markets or find new customers.
Another type of opportunity is one that looks at pivoting your offering to take advantage of changes to the business environment. Many businesses have had to rethink their products and services in the wake of the current pandemic to ensure continued business growth.
Take our Immundnz case study. This specialist immunology business was awarded UKRI funding for a new project to find biomarkers in human lung cells that could predict the severity of a COVID-19 infection. Innovate UK EDGE helped them secure this essential funding and grow their team through international partnerships.
Pivoting your business doesn’t have to mean completely transforming your product. It could involve moving your services online or finding a slightly different audience for your existing products.
In the UK, this could mean pivoting to other markets or customer segments you’ve identified from reviewing your business model and value propositions - a service we offer our clients, which also looks at channels to reach those audiences, as well as the partners, activities and resources required to do it.
How to assess market opportunity
To identify business opportunities in new or existing markets, a full analysis is needed. Find out how to take stock...
Conduct a market opportunity assessment
Although it may seem like going back to school, conducting a market analysis is a great way to notice gaps in the market that you may have missed. Sit down, preferably away from the office, and go through the strengths and weaknesses of your own company. This will expose areas of your business that you need to improve on, and these can lead to new opportunities.
Your market analysis could include;
- Calculating market size - is there enough market demand?
- Competitor analysis - who are the major players already out there in the market?
- Market potential - is this the best market for your innovation?
- Market growth opportunities - is the market likely to grow?
- Identifying any barriers to entry - what are the potential pitfalls?
- External environment - are there any upcoming technology updates, policy and regulatory developments or social influences that could affect your success?
One of our innovation and growth specialists can help you build your knowledge of new markets at home and overseas, providing bespoke and expert advice.
Calculate market size
The size of the market is usually calculated in terms of potential customers or transactions.
First, you will need to define your target customer before carrying out market research and collating data.
Work out what the total market size is and then calculate what percentage of the total market your target customer occupies for a more realistic market size assessment.
Competitor analysis is an important part of identifying new opportunities. By looking at the number of customers or sales of similar businesses you can start to get a feel of the size and opportunity of the market and pinpoint anything that others are missing. Look at products, services or brands that are doing well in the market and think about how you could improve on them with your offering.
You could do this through a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of your own and competing businesses.
- What are the perceived and actual strengths of your own and competing businesses?
- What could be improved?
- What opportunities are out there for your own and other similar businesses?
- What threatens your own and competing businesses success?
- What can you do about it?
Alternatively, you could complete a simple analysis matrix comparing competitors against a set of relevant categories, for example;
- Market share
- Target audience
- Product features
How to define your market & offering
Once you’ve conducted initial research and analysis, it’s time to refine your offering for the market.
Define your target market
Be sure to keep in mind the type of person you’re targeting by asking yourself questions such as:
- What's their lifestyle?
- How do they travel?
- What devices do they use most?
- What are their eating habits?
- What is their profession/role?
- How do they prefer to obtain goods and services?
By defining your target audience, you’re able to get a better insight into your current and potential customers and what it is they’re missing. Once you’ve found that ‘thing’ that's missing you’ve found your market opportunity.
It can help to create a buyer persona. A buyer persona is an example template of your typical or ideal customer. You may have multiple buyer personas for different parts of your business. A buyer persona will be based on customer research and include key information about them, such as;
- Personal information
- Professional information
- Values and goals
- Challenges and pain points
- Hobbies, activities, shopping and communication habits
- Where they hang out - social media channels, websites, physical locations etc.
You could start compiling this information via customer surveys, team insights or market data.
Find niche market opportunities
Identifying a niche market idea is essential when it comes to exploiting new opportunities for innovation.
The more targeted your market becomes, the more gaps that will start to appear and the less competition you will face.
Niche business ideas could include anything from a new product for home workers to a medical innovation for a specific health issue. Here are some things to consider when identifying your niche;
- USP - What are your strengths and differences?
- Audience demographics - Who is your buyer persona and what do they need?
- Innovation - Has it been done before and does it provide a solution for the customer?
Give your business a competitive edge by targeting a niche market sector with your innovation.
Talk and listen to people
Whether it be other business owners, your friend, someone you meet down your local pub, or a family member, talk to them. It's one of the best ways to identify market opportunities and to find new markets. When you talk to others you view things differently, and thinking outside of the box is likely to help you most in finding those hidden gaps in the market.
This also goes for customers. If you’re launching a new product, you should talk to your existing customers and review client data or surveys to identify trends and patterns in buyer behaviour that could help point you in the right direction.
Explore potential partnerships
Exploring a new opportunity often involves the help of partners. Finding new partners to manufacture, distribute, co-develop and supply your products, ideas and services could help you to see your business or market sector in a new light.
Browse our global partnership database to view opportunities.
International market opportunities
As you grow, you may outsize your home market and need to look further afield for new opportunities. Breaking into new, international markets can take your business to a new stage of growth.
To do this, it’s important to have a strong understanding of the market and sector as well as connections in the target country. You’ll need to think about local regulations, any cultural differences and where your offering fits into the current landscape.
This is crucial to any market expansion strategy. You need to know who the key players are, how the mark is growing and what the barriers to entry are.
It’s likely you’ll have a lot of this in place. We’d help by going through this with you to make sure you’re looking at the right data and it’s telling a realistic story. Given our connections across the innovation landscape, we’ll also try to source additional data for you.
The Global Business Innovation Programme gives ambitious innovation businesses the chance to learn about specific international markets, build relationships and forge new partnerships. Our global programmes, brokerage events and advisors can provide you with the information, advice and connections needed for global business expansion.
New markets & partners
If you’re looking to expand abroad, the right strategic partners can unlock regions or countries. Again, we’d revisit your business model and value proposition through the lens of its relevance for that market. We’d look at legislation, pricepoint, standards/certifications too. The process will help you prioritise which markets to focus on.
We can initiate conversations through our contacts in the Enterprise Europe Network (the world’s business-to-business collaboration network), Department of International Trade and the Science and Innovation Network - all based around the world.
Get help from an innovation and growth specialist
Break into international markets and adjacent sectors to grow and scale with help from our connections, expertise and targeted global programmes.
Our innovation and growth specialists can advise on everything from business models to marketing strategies. Following an audit of your business plan, we can help you enter new markets by determining innovation-led growth strategies.