A strategic market assessment helps you prioritise investment decisions and execute effective growth strategies. But where should you begin? Start with these foundational market indicators: macroeconomic shifts, category momentum and a landscape analysis of competitors, consumers and channels.
1. Macroeconomics
Certain countries might appear attractive on the surface with high economic growth, stable labour markets or strong capital investments. But risks could be lurking beneath those positive indicators that need to be considered.
Top macroeconomic indicators
• Real GDP growth
• Inflation and consumer prices
• Interest rates
• Employment rates
• Exchange rates
These metrics are crucial for understanding economic conditions. You can also use our macro model to undertake a risk scenario analysis. Scenario forecasts capture a range of potential events (with assigned probabilities) that could impact baseline projections for GDP growth, unemployment rates, inflation and interest rates.
2. Category growth
Category sales growth is an indicator of market attractiveness and should be a primary input for your assessment. Look at both compound and absolute growth metrics to understand historical and future trajectories.
Compound annual growth vs absolute growth
The compound annual growth rate (CAGR) gives you a quick view of average performance for a product or service category over time. Absolute (total) value or volume growth can convey the size of the opportunity, especially when comparing mature markets with rapidly rising, smaller economies.
You should also analyse the performance of complementary categories that share demand drivers or similar lifecycles to your offer. This insight gives you a sense of potential demand, especially for emerging or less-developed markets.
3. Landscape analysis
Now, you need to consider the broader landscape—competitors, consumers and channels.
Competitors
Examining the competitive landscape sheds light on the degree of market fragmentation or consolidation. Market shares tell you which companies or brands compete in a given category and how much of the market those players capture based on category sales.
Remember to factor in your positioning and any USPs or vulnerabilities. If you have a difficult time competing against a certain brand on price, for example, that brand’s presence in a market should carry more weight as a potential threat. Or if a local player aligns with your business objectives, you might want to explore a joint venture.
Consumers
Demographic profiles and socioeconomic trends are another major determinant of future demand. Look at population, household, income and expenditure data to get a sense of consumers in the countries you’re exploring.
You can get even more granular with segmentations like consumer expenditure by income and survey data to understand consumer preferences. Overall, this data gives you a sense of which countries are the most favourable based on your target audience.
Distribution
An effective retail strategy requires insight into the distribution landscape. Which purchase channels are dominant for your category in the countries you’re assessing? How are sales shifting across those channels?
Examine channel evolution over time to see which ones are growing or losing share. And given the importance of online shopping, category sales by e-commerce retailer can help you monitor the competitive landscape and decide which platforms or partners to sell through.
Get started
A strategic market assessment helps you examine opportunities and challenges for potential business expansion.
Download this quick guide from our Opportunity Minded series to expand upon these fundamentals and see how you can turn data into direction that drives growth.
Contributing Euromonitor experts: Matthew Barry, Global Insight Manager – Food; Lan Ha, Head of Insights – Economies and Consumers; Bob Hoyler, Global Insight Manager – Retail; Jana Rude, Senior Insight Manager – Consumers; Aleksandra Svidler, Consultant – Economies and Consumers.
Editor’s note: This article was originally published in August 2021 and has been updated.
