What is the market structure analysis?

Market structure analysis is a systematic overview of factors that determine the level of difficulty when input or expansion into a specific market area. The term structure of the market describes the economic environment in which the company operates. This overview, also referred to as market input analysis, evaluates capacities, weaknesses and strengths of competitors and measure the potential for access to delivery. Other factors that have usually been considered to analyze the market structure are the level of product substitution or service that can become a game, and the expected sale that can materialize from entering the new market. Market structure analysis focuses on the latter area in an effort to measure statistical probability of success or failure. Data that collects in the analysis, usually looks about the potential of sales and difficulty and levels of investment needed for successful entry into the market gap. The level of access to the stocks needed for business activities is also often evaluated.

Quantitatively measurement of existing competitors active on the market is a key aspect in the analysis of the market structure. This may require some work in the style of detective, for example, such as combing public data on key competitors. Transcripts of earnings and data consisting of a competitor's sales data can often bring insight into the key aspects of the market structure.

Reliability and access to supplier chains is a key part of the market structure analysis. A special competing arena can offer a high level of access to a new market participant. However, if the key reserves are controlled by a cartel or a limited number of companies, such factors can seriously prevent prospects for successful market entry.

Another factor that has often been considered in the analysis is the willingness of consumers to replace one similar offer of the product after another. If the product loyalty is high among the main playerEM in a particular market, then price wars may appear when new candidates enter the market. There are many examples of how the product loyalty or its lack can affect the success of the company when entering the market. As a factor in the market structure analysis, brand loyalty is usually considered a critically important factor for the new market participant to assess.

Factors in the analysis of the market structure are dynamic because different players on the market are expanding or concluding a contract or entering an arena or leaving. These factors constantly affect the cost of entry or expansion on the market. As a result, such analyzes are sometimes performed at regularly planned intervals.