What is Opportunity Analysis?

Opportunity Analysis Goals

Opportunity Analysis is the systematic examination and evaluation of external environments in order to identify market acceptance, needs, desire for, and economic factors in the creation of a new product or expansion of existing products and the profitably or lack-thereof.

Each evaluation of product expansion or manufacturing / distribution will vary. From small changes within a current production model that leads to production or distribution expense reduction or increases overall efficiency, to the launch of a new product line that will increase profitability for a business overall is part of an opportunity analysis.

Whether the goal is to increase profits by reducing expenses or broadening the range of products offered, undergoing an opportunity analysis helps to provide an understanding of what effects, positive and negative, are likely to take place if a particular approach is implemented.

Opportunity Analysis Key Questions

Three key questions must be answered in order for an analysis to be effective. First, is identifying all benefits of implementing. Second is answering the question; what adverse effects are likely to occur when the implementation takes place? And lastly, how will the new changes, and/or additions affect the overall function of the operation, and is the result worth making the change?

Once it is determined that there is value in pursuing these changes, the opportunity analysis then focuses on any potential negative effects of implementation. Any worthwhile opportunity analysis must also evaluate the long-range effects. Often, this means looking at not only issues of production and cost, but also unique and possibly intangible factors. And most importantly, if the change will have a negative effect on revenue generation over the long-term then it’s time to “go back to the drawing board.”

Opportunity Analysis FAQs

What is an example of opportunity analysis?

Here is an example of opportunity analysis:

1. A company that sells outdoor gear is considering expanding into the hiking market. They conduct market research and find that there is a growing demand for lightweight, high-quality hiking equipment, they also identify a gap in the market for such products, as most of the current offerings are either low-quality or very expensive.
2. The company then assesses the feasibility of launching a line of hiking equipment by analyzing the size of the potential market, the cost of developing and producing the products, and the potential competition. They also consider their own resources and expertise, and determine that they 
3. have the necessary skills and capabilities to enter the market.
4. Based on this analysis, the company decides to proceed with the opportunity and develops a business plan for launching the new line of hiking gear. This plan includes goals and objectives, a marketing and sales strategy, and a timeline for implementation. The company then recruits a team, secures funding, and begins the process of developing and producing the new products.
5. Finally, the company monitors the performance of the new line and makes any necessary adjustments to the business plan in order to achieve the desired results. This process of opportunity analysis helps the company make informed decisions about whether to pursue the new product opportunity and how to allocate resources to do so effectively.

What are the five stages of opportunity analysis?

The five stages of opportunity analysis are:

1. Identify the opportunity: The first step in opportunity analysis is to identify potential opportunities for the business or organization. This may involve researching market trends, analyzing customer needs and identifying trends that may create new opportunities.
2. Assess the feasibility of the opportunity: This involves evaluating whether the opportunity is feasible in terms of resources, market demand, and potential profitability. This may involve analyzing market size and competition, assessing the cost of developing and launching the product or service, and considering any regulatory or legal constraints.
3. Develop a business plan: One the opportunity has been assessed as feasible, the next step is creating a detailed business plan that outlines how the opportunity will be pursued. This may involve setting specific goals and objectives, identifying key resources and partners, and developing a marketing and sales strategy.
4. Implement the business plan: Put the business plan into action, which may involve recruiting a team, securing funding, building or acquiring the necessary infrastructure, and launching the product or service.
5. Monitor and adjust: Once the product or service is launched, it is important to monitor its performance and make any necessary adjustments to the business plan in order to achieve the desired results. This may involve refining the marketing and sales strategy, modifying the product or service, or making changes to the overall business model.

Why is opportunity analysis important?

Opportunity analysis is important because it helps businesses and organizations identify and evaluate potential opportunities for growth and innovation. By conducting an opportunity analysis, businesses can assess the feasibility and potential profitability of a new product, service, or business venture, and develop a plan for pursuing the opportunity. This can help businesses make informed decisions about how to allocate resources, and can help them avoid investing in ventures that are not likely to be successful. Additionally, opportunity analysis can help businesses identify and capitalize on trends and changes in the market, which can help them stay competitive and remain relevant in a constantly evolving business environment.

How do you conduct an opportunity analysis?

An opportunity analysis is a process of evaluating the potential of a new product, service, or business idea. Here is a general overview of how to conduct an opportunity analysis:

1. Identify the opportunity: Start by identifying the problem or need that your product or service will address. Consider the potential market for your product or service, including the size and demographics of the target audience.
2. Gather and analyze data: Collect data about the market, competitors, and potential customers to help you understand the opportunities and challenges you may face. This may involve conducting market research, analyzing industry trends, and gathering feedback from potential customers.
3. Assess feasibility: Evaluate the feasibility of your product or service in terms of its technical, financial, and market potential. Consider factors such as the cost of production, the potential return on investment, and the level of competition in the market.
4. Develop a plan: Based on your analysis, develop a plan for how you will bring your product or service to market. This may involve identifying key partners, developing a marketing strategy, and outlining a budget and timeline for launching and scaling the business.
   

    

Conducting an opportunity analysis can help you identify and evaluate the potential of new business opportunities and make informed decisions about whether to pursue them.