Commercial Analysis


Is there a "magic formula" for success?

Many people end up believing that there is a "magic formula" to reach success, however, this is a myth. However, there are effective and interesting tools and market strategies that can improve the positioning of a certain entity in the market niche corresponding to it, thus adding more value, thus, competitive advantage. Given this scenario, today's post will bring together some basic elements tangent to commercial analysis as a way to combat the idea that there is such a formula for achieving success.

The formula sells the idea that all products can be sold overnight, which, without planning, is impossible. There are some aspects on which the entity can rely to boost its sales, such as commercial analysis, sales, market, team and leaders. These are just a few examples.

Improving market positioning

In order to obtain a better position on the market, some key variables should be taken into account. The post brings together a number of elements that help a business get better performance. Such tips are intended to help the entity leverage its sales, bringing real results to the business. The first variable that permeates the commercial analysis is the commercial process. Whether or not the business relies on this process is the first thing. If the answer is "I think so", then there is no process, but a problem.

Unlike sectors that, in their practice, operate with more tangible data, such as marketing and finance, the commercial sector is fickle, marked by sensations. Given this scenario, it is of paramount importance that the process be based on numbers so that strategic planning becomes more assertive and efficient.

Characteristics of commercial analysis

Commercial analysis is also popularly known as market analysis. As the term itself points out, a market analysis has well-defined objectives, focused exclusively on a specific market level.

The evaluation offered by this analysis has, as main scope, to determine how attractive is a certain niche market for the company, which implies the use of specific research techniques. Therefore, it is common that, first of all, an in-depth study is carried out on the market possibilities for this particular business.

The market study is ideal for several moments, whether for companies that are in the process of construction or for those that already exist, but who want to operate in a different sector and want to test the possibilities and whether this specific market is attractive for the products / services you want to offer.

Risks in business analysis

Another advantage of this type of approach is to present an overview of current and future risks that can prevent a certain company from expanding. There is a very simple way from which market analysis can be understood. It is assumed that a process is based on the determination of certain factors, conditions and characteristics concerning a specific market. In market analysis, a series of variables are taken into account so that feedback produces satisfactory results.

Among them, there are those results promoted by SWOT. Due to the logic of operation of the tool, it becomes possible to know the strengths and weaknesses of a certain entity (Strengths and Weaknesses), as well as it becomes noticeable, also, the opportunities and threats (Opportunities and Threats).

The assessment of strengths and weaknesses

In fact, one of the keywords related to commercial analysis is the assessment of strengths and weaknesses, which implies discussion about opportunities (strengths) and threats (weaknesses). The evaluation of these strengths and weaknesses is paramount, because, from it, it becomes possible to create a strategy, and it lists the factors that can foster the success of the business.

On the other hand, analyzing external threats and opportunities is of equal importance, because from this it becomes very easy to know where the opportunities will come from and what are the risks and problems that can be raised by converting these opportunities into practical actions. For example, with the intention of analyzing the changes in consumer behavior, which today buys much more than before, points to the fact that e-commerce currently makes the company position itself better.

How can a market be evaluated?

There are several variables that permeate the evaluation of a market. There are certain contexts that make a region or even a space (neighborhood, municipality, state) more competitive, and thus, changing strategy is fundamental, because remaining in the same way can lead to business bankruptcy.

In so that a market can be evaluated, the SWOT Matrix, a well-known and widely used tool, proposed some steps that must be taken when studying a certain market. These steps analyze some essential elements, including urgency, market size, pricing potential, customer acquisition cost, value delivery cost, offer exclusivity, market speed, initial investment, potential for sale of secondary products and perennial profit potential.

The calculations in the Market SWOT analysis

Before explaining the characteristics of the steps through which the commercial analysis goes through, one should understand what are the metrics taken into account.

First, one takes into account a scale ranging from zero to ten in the attractiveness, so that means that the business, in this regard, is not at all attractive, and, in turn, ten points to the fact that the business is highly attractive in this activity. After the appropriate explanations, the appropriate steps can be presented.

The first of these is urgency.

The question that will guide the reflection concerns what is the urgency of the market for the product or service you wish to offer. In other words, we want to know if, at this moment, the market demands for this product/service. This is a matter of paramount importance, since if the niche in which it operates is not in need of such a service, rejection is inevitable.

Practical example of urgency

Suppose that a certain company operates in the marketing niche of education, precisely by offering English courses. This branch today is highly competitive, so an English school that does not want to remain in a specific municipality, that is, wants to migrate to other regions of the state. We need a strategy that will promote this expansion.

Instead of already renting spaces in these other cities where you want to have new English schools, it is necessary to investigate whether the city in question needs this new school.

To start by expanding the range of operations through, for example, in-company courses is the most ideal, because it may be that the school's clients need, more urgently, a space that offers English classes within the company itself. Thus, courses in which the student needs to move to the place may not be so well accepted. Investigating the scenario before is essential.

The size of the market

This is an issue that is closely linked with the previous step. Before settling in a new city, the most ideal is to know, before, the size of the market. This is one of the most elementary factors in a commercial analysis.

Always take into account the following situation: the larger the market associated with a certain branch, certainly, the greater the competition. This situation points to the fact that it is essential that the company offers products and services that can stand out in this scenario marked by competitiveness.

Therefore, innovative, modern products that solve problems or contemplate current and urgent demands are the ones that stand out the most. Returning to the example of the English school, if that is the intention, make sure that the professionals are good and that the material is of quality.

Pricing policy should be thought of according to the market.

The pricing potential

Since the price-related aspects have been mentioned, the other point that commercial analysis should take into account is the pricing potential. It is a mechanism that is closely linked with the relationship of supply and demand, and thus, in a market that, every day, becomes more competitive, many high prices can decrease the number of customers.

However, if these prices are below average, the public may find that the product/service is of poor quality and not adhere. In a market that is still little known, and thus the products and services are still new, the company can charge a higher price.

In the case of small markets, a higher price is also charged. If the pricing potential of the business is identified, the challenge is whether this price is ideal and whether it will ensure that the cashier continues to operate in the blue, making a profit.

The cost of acquiring customers

Another variable that should be taken into account in the analysis is the cost of acquiring customers. There are two questions asked on a recurring basis: whether it is easy to win over a new client and what investment and entity need to pay to generate the sale. Knowing how much will be invested to acquire a new customer is also one of the essential points that should be measured by commercial analysis.

To do so, there is an indicator known as Customer Acquisition Cost (CAC). From it, it is possible to earn how much the company will spend to attract the new customer and how much it will need cash to finance its own growth. The sum of all expenses of the marketing and sales teams is calculated, including salaries, commissions, ad, advertising and media expenses, etc. The number of customers earned in a certain period is divided.

Cost of delivery of the value and exclusivity of the offer

The cost of delivering the value is represented by the amount that would need to be invested and what effort is involved. In the case of the English school, renting spaces across the state could cost more than paying teachers to teach classes in the in-company format. It may be more advantageous to invest in a platform of online courses, and may even reach the whole country than to invest in the displacement of the teacher through the state.

The exclusivity of the offer, in turn, points to the following question: if the offer that the company makes to the market is not exclusive, it can have a bad performance in its context of operation, since in order to be able to reach success it is of paramount importance that one has a strategic planning, and from it, it is vital to offer quality products and services as well as the price needs to be competitive, therefore, exclusive.

Last aspects of commercial analysis

There must also be a speed of entry into the market. A company also needs the initial investment. It is represented by the disbursements necessary for the purchase of certain goods, such as machinery, equipment, systems, vehicles, furniture, tools, hardware and software. There are also those costs related to training and training that cannot, under any circumstances, be disregarded by commercial analysis. Having the answer to how much the company wants to expand is crucial.

Therefore, it is taken into account that every investment needs to be included in the corporate budget in order to establish goals and objectives from this. There is no point in conducting a market analysis if the budgeting process is non-existent, or if it is disorganised. The investment could be a shot in the foot.

Potential for sale of secondary products and perennial profit

In the case of the potential sale of secondary products, it is taken into account that the more secondary products the company obtains, the more offers can be made to customers.

Therefore, when analyzing the market, it should be verified if competitors are offering secondary and complementary products to the primary, because if they do not, this can be a great opportunity that will increase the positioning of the entity. Finally, there is the potential for perennial profit that is also considered by the analysis. It is assumed that there is an offer. Knowing what job the company will need to do to continue selling is the command word.

There are products and services that can only be used and used once, and it is therefore temporary, which makes products and services with no shelf life or that work in the long term more attractive.


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