Things to know and learnig from the best.

Total Available Market

There are 6 key questions to ask when analyzing and gauging the overall market/industry:

1. What’s the structure of the industry? What’s the history and trends that transformed the industry? What are the key forces that affect this industry? There are 5 key forces called Porter's 5 Forces to assess the structure of the industry:
   
   
   • How intense is the rivalry among existing competitors? Is competition based on price? Will competitors slash prices in response to other competitors pricing strategies? Or is the market big enough where competitors are not competing for the same customers?
   
   
   • How much power do suppliers have? Can suppliers charge a high premium and get away with it?
   
   
   • Are there any close substitutes to the product/service you’re offering? If there are close substitutes, there is a higher chance your customer won’t use your product/service
   
   
   • How easy is it for new competitors such as yourself to get into this industry? If it’s easy, then expect to have lower market share than you would hope for.
   
   
   • How much can customers demand companies to sell their product/service at a certain price? For example, if the industry was selling staples, then customers have a lot of power to demand staple retailers to sell at a cheap price versus demanding to buy a car at a cheap price.


2. What industry trends are apparent that might change these forces mentioned above?


3. What is the environment that your business is operating within and is it a friendly environment? Are there any strict laws that regulate your industry?


4. What are the major competitors’ goals/strategies/assumptions/capabilities?


5. Are there any alternative strategies for smaller competitors to follow to compete in this industry?


6. What are the critical requirements for success to succeed in this industry?