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Company Research

How to Perform a B2B Market Analysis

Gauge Risk and Uncover Opportunities in Your Industry

Businesses-to-business enterprises must understand their industries in great detail if they hope to succeed and remain competitive. A comprehensive B2B market analysis provides insights on customers, competitors, opportunities, and risks in a given sector.

Many business owners are familiar with the market analysis as a component of funding requests. However, businesses also perform regular market analyses for their own benefit. Companies want to understand the marketplace, and thorough research helps them identify risks and opportunities.

The following elements are fundamental to a B2B market analysis:

  • Customer research
  • Competitor identification
  • Market sizing
  • Business risk analysis
  • Economic insights

This list is not all-inclusive, and priorities can vary by industry. However, all B2B market analysis documents are intended to demonstrate a deep understanding of the factors that can affect a business's bottom line. We'll explore each element in detail below.

Customer Research for B2B Businesses

B2B marketing teams can have a considerably more difficult time identifying customers than their B2C counterparts. Why is this the case?

B2B products or services may appeal to a very limited pool of customers due to lower demand and higher prices. B2C companies often have products available for a swath of people. Consumer-facing businesses build profiles of their ideal customer based around gender, age, marital status, and the like. It would be foolish for a B2B firm to do the same, as these are rarely the determinative factors in identifying qualified leads. Instead, salespeople must find companies that have a need for their goods or services, and that can afford to purchase them.

Many B2B companies rely upon business information providers to research potential customers. These databases often contain reports about a business's financial performance, subsidiaries, and other firmographic details. Savvy researchers go farther still, digging into corporate earnings reports to understand which areas of the business are expanding or contracting.

Identifying Competitors

Sizing-up the major players in an industry is essential to crafting a compelling value proposition. Identifying competitor strengths and weaknesses allows businesses to make strategic decisions about resource allocation, territory planning, pricing, and promotions.

Once again, business information providers have an important part to play. Just as these resources help businesses identify customers, they can pull back the curtain on the competition. The following information is useful when gauging the threat posed by B2B competitors:

  • Parent and subsidiary relationships
  • Sales territory
  • Earnings
  • Outstanding loan defaults, late payments, or liens
  • Legal judgements
  • Recent news

Competitive insights shouldn't be based upon speculation; understanding the threat posed by other companies is too important to leave to chance.

B2B Market Sizing

Market sizing exercises seek to determine the sales potential for a given good or service. Whether a B2B company is planning on launching a new product line or expanding into another market, it's essential to ground expectations in real data.

Let's use the hypothetical example of a trucking company that's developed a new way to refrigerate tractor trailers. In order to understand the size of the market, management would need to answer several questions, including:

How many refrigerated trailers are currently in use?
What's the average lifetime of a refrigerated trailer?
How many new refrigerated trailers are purchased each year?

Uncovering answers to these types of questions isn't always easy. Marketers rely upon surveys, public financial documents, and government data to arrive at reasonable figures.

Market size can be expressed in units (how many refrigerated trailers will be purchased?) or dollars (what's the total value of sales?). This is, of course, a simplified example showing the total market potential. A real B2B company would have to consider how much market share they could reasonably hope to win.

Business Risk Analysis

Every business faces a unique set of risks. A comprehensive B2B market analysis seeks to identify these challenges and propose contingency plans. Major business risks include:

Financial risks: Revenue and spending concerns, including the ability to access capital, get paid by customers, and manage debt.

Operational risks: Challenges that arise from internal factors, such as supply chain disruptions or labor actions.

Compliance risks: Penalties associated with violating regulations, including health codes and anti-corruption laws.

Technological risks: Data security threats, including the theft of customer and company information.

Strategic risks: Any changes with the potential to disrupt a business's strategy, including new competitors, a shift in customer preferences, and other external factors.

Reputational Risks: Events that can negatively affect perceptions of a company. Taking a public stand on political issues, being implicated in illegal activity, or bungling a human-resources matter can all result in damage to a company's reputation.

Each business will be faced with a different risk landscape. Retailers are vulnerable to supply chain issues, labor actions, and decreases in foot traffic to stores. A medical equipment manufacturer would pay particular attention to compliance risks, as that industry is heavily regulated.

Successful businesses don't just anticipate risks - they also develop mitigation strategies to minimize damage. If funding should dry up, management knows where additional cash might be found. The impact of losing a primary supplier can be blunted by ensuring secondary vendors are able to increase production on short notice. Such planning is important if businesses hope to weather the storm of uncertainties facing them.

Understanding the Economic Outlook

While being fully versed in the particulars of an industry is important, businesses must also try and anticipate wider economic trends. Consumer spending data, employment numbers, and similar metrics enable companies to put their own expectations in context.

Economic data is available from a variety of sources, including state and local governments. The business media is also a valuable resource in understanding the economic climate.

Creating a B2B market analysis requires time and attention to detail, but the extra effort can position a company for short- and long-term success.

Find more information about Dun & Bradstreet's risk management tools on our Solutions page.

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