What Is Market Sizing And Why It Matters In Business

Market sizing is the estimation of the potential of a market. Incorporating market research, market sizing is useful for businesses looking to introduce a new product or service to evaluate the business opportunity. Market sizing also helps investors to understand the value of the potential opportunity within the target company’s business plan.


ConceptMarket Sizing is a crucial process in business and market research that involves estimating the total market potential for a product, service, or industry. It provides valuable insights into the size and growth potential of a target market, aiding in strategic planning, resource allocation, and decision-making. Accurate market sizing is essential for businesses to identify opportunities, assess market share, and plan marketing and sales strategies.
Key CharacteristicsMarket Sizing is characterized by the following elements:
Data-Driven: It relies on data, research, and analysis to estimate market size accurately.
Objective: The goal is to provide an objective assessment of market potential, free from biases or wishful thinking.
Segmentation: It often involves segmenting the market into subcategories to analyze specific niches or customer groups.
Future Projections: Market sizing is not limited to current conditions; it often includes projections for future growth or changes.
Methods and ApproachesSeveral methods are used for Market Sizing, including:
Top-Down Approach: Estimating the total market size based on industry data, government statistics, or reports.
Bottom-Up Approach: Calculating market size by aggregating data from individual customer segments or specific regions.
Primary Research: Conducting surveys, interviews, or focus groups to gather direct insights from potential customers or industry experts.
Secondary Research: Analyzing existing data sources, market reports, and publicly available information.
Use CasesMarket Sizing is essential for various business scenarios:
Market Entry: When entering a new market, companies need to understand its size and growth potential.
Product Launch: Assessing the market size helps in setting realistic sales targets and marketing strategies.
Investment Decisions: Investors use market sizing to evaluate the attractiveness of opportunities.
Competitive Analysis: Understanding the size of the market helps in assessing market share and competitive positioning.
BenefitsAccurate Market Sizing provides several benefits:
Informed Decision-Making: It helps businesses make informed decisions about market entry, investment, and resource allocation.
Risk Mitigation: Understanding market size reduces the risk of overestimating or underestimating demand.
Resource Efficiency: Companies can allocate resources more efficiently by focusing on markets with significant potential.
Competitive Advantage: It enables companies to identify underserved niches and gain a competitive edge.
ChallengesChallenges associated with Market Sizing include:
Data Availability: Access to accurate and relevant data can be limited, especially in emerging markets.
Complexity: Estimating market size for highly specialized or niche industries can be complex.
Changing Dynamics: Markets can evolve rapidly, making it challenging to keep sizing estimates up-to-date.
Factors Influencing AccuracyFactors that influence the accuracy of Market Sizing include:
Data Quality: The reliability and completeness of data sources used.
Market Volatility: How stable or volatile the market conditions are.
Assumptions: The accuracy of assumptions made during the sizing process.
Research Methodology: The rigor and validity of research methods employed.
Real-World ApplicationMarket Sizing is applied across industries, including technology, healthcare, consumer goods, and finance. For example, tech companies assess the market size before launching new software products, while pharmaceutical firms estimate market potential for new drugs.




Understanding market sizing

For businesses wishing to enter a new market, the research that goes into market analysis is daunting in its complexity. 

Market sizing seeks to remove that complexity by breaking the analysis into smaller sets of assumptions.

These assumptions can then be extrapolated to form an overall market size estimate.

Once a business has successfully undertaken market sizing, it can determine the level of investment required and also potential growth strategies.

It can also gauge the value of a market and its profitability – factors that ultimately determine whether the business enters said market.

The three basic steps to market sizing

To be effective, market sizing should be a bottom-up approach. Although time-consuming, this approach to market research gives more realistic and accurate market potential.

Using the bottom-up approach, market size can be calculated by multiplying the number of units sold by the price of each unit. 

In other words, businesses using this approach start with the smallest known pieces of data and then use these data to build up a realistic representation of their market.

This approach differs from the top-down approach, which is based on generalized and trend-inflated market valuation whose data accuracy is often questionable.

Here is how the bottom-up approach works.

1. Define the target market

The first step is perhaps the most important, and it involves understanding a target audience. In other words, who is the type of person a product or service is best suited to?

A buyer persona can help because it allows businesses to be ultra-specific on the type of people they want to attract. 

Then, the business must determine the size of their target market. This can be done in several ways and may involve contacting business organizations or governmental and commerce agencies.

For example, a high-end baby food company may contact its local commerce board to determine that there are 550 high-end supermarkets in their state.

2. Assess product interest

Then, the business should determine the number of consumers who may be interested in buying their product.

This can be done by looking at competitors and their annual sales data.

However, sometimes this information is hard to obtain. If competitor data cannot be found, then focus groups and surveys can be used to gauge the likely level of interest in a new product.

While the baby-food company may have identified 550 stores, they find that only 250 are interested in stocking the product on their shelves.

3. Calculate the potential sales

Calculating potential sales can be tricky, but an accurate approximation can be obtained by competitor analysis or by referring to cash flow forecasting or other finance based models.

In the case of the baby-food company, it estimates a roll-out cost of $20 million across 250 stores compared to potential annual revenue of $60 million.

Although the investment is 33% of forecasted annual revenue, profits in the second year sans roll-out costs are significantly higher. Therefore, the company decides to enter the market.

Market sizing example

Now that we’ve provided an overview of market sizing and how it works, let’s take a look at the hypothetical example of a LED manufacturer.

The manufacturer wants to know the size of the residential LED market size in the United States. 

Step 1 – Defining the target market

In first defining a target market, the manufacturer may find there are several audiences worth quantifying. These include:

  • Environmentally-conscious consumers who want to switch out their incandescent bulbs for LEDs.
  • First-home owners who want to incorporate LED lighting as part of a new build.
  • Existing homeowners who want to upgrade or improve the lighting in older homes that are dimly lit.
  • Homeowners living in states where incandescent bulbs have been banned by authorities.

The company can then perform detailed research and determine how many LED units are sold in each market and add them together to determine the total market size.

Alternatively and upon further research, it is found that the total US LED market was valued at $9.89 billion in 2020 and is expected to be worth $17.22 billion by 2028.

However, these data account for LED sales across the residential, commercial, industrial, retail, hospitality, and healthcare sectors. 

Step 2 – Assess product interest

To determine what percentage of total LED sales are residential, the company learns that 47% of all United States households use LEDs for all or most of their lighting

If there are approximately 142.2 million houses in the United States, this equates to around 66.8 million potential customers.

Step 3 – Calculate the potential sales

As we noted earlier, calculating the potential sales for any product or service can be one of the most difficult parts of market sizing.

Below we have listed some assumptions for both existing and new homes in the United States.

Existing homes

  • Approximately 66.8 million homes use LED illumination.
  • The average US home has seven rooms with three LED units in each. Hence, the total number of LED units in all American homes is approximately 66.8 million x 7 x 3 = 1.4028 billion units.
  • Considering the average LED unit lasts 14 years, we can assume that 1.4028 billion units are purchased/replaced every 14 years. As a result, the company calculates that around 100 million units are purchased every year in existing homes.

New homes

  • According to the US Census Bureau, 912,000 family homes were built in 2021.
  • For the sake of this article, let’s assume that every one of these new builds incorporates LED units with none using incandescent bulbs. Let’s also assume that these homes have an average of 7 rooms and 4 LED units in each. 
  • The market size for LED units in new homes in the United States is therefore 912,000 x 7 x 4 = 25.536 million.

The company then adds the number of LED units sold in existing homes and new homes on an annual basis and arrives at a number of 125.53 million. 

If we assume that the average cost of an LED unit (including standard bulbs and more expensive downlights) is $15, the residential market for LED lighting as it stands today is worth around $1.88 billion annually.

Key takeaways:

  • Market sizing is the estimate of the size of a market using insights gleaned from a target audience and existing or potential sales volume.
  • Market sizing is a bottom-up approach that utilizes known data to give a representative view of the larger market. It is more accurate than the top-down approach that relies on generalized or assumption based market data from competitors.
  • At its core, market sizing is an iterative process that is based on an accurate and detailed view of the target audience a business hopes to serve.

Key Highlights:

  • Definition of Market Sizing: Market sizing is the process of estimating the potential size of a market for a specific product or service. It involves breaking down market analysis into smaller assumptions to arrive at an overall estimate of the market’s potential.
  • Purpose of Market Sizing:
    • Helps businesses assess business opportunities for introducing new products or services.
    • Assists investors in understanding the value of potential opportunities in a company’s business plan.
  • Market Sizing Process:
    • Define Target Market: Understand the target audience and determine the size of the market segment. Utilize buyer personas to be specific about the intended customers.
    • Assess Product Interest: Determine the number of potential consumers interested in buying the product. Look at competitor data or conduct focus groups and surveys.
    • Calculate Potential Sales: Calculate potential sales by multiplying the number of units sold by the price of each unit.
  • Bottom-Up Approach: Market sizing should be a bottom-up approach, starting with known data and building up a realistic view of the market. This approach is more accurate than the top-down approach that relies on generalized data.
  • Market Sizing Example: LED Manufacturer:
    • Defining Target Market: Define different segments interested in LED lighting, such as environmentally-conscious consumers, first-home owners, existing homeowners, and those living in areas where incandescent bulbs are banned.
    • Assessing Product Interest: Determine the percentage of households using LEDs and apply it to the total number of households in the target area.
    • Calculating Potential Sales: Calculate potential sales for existing and new homes separately, considering the number of LED units per home, lifespan of LEDs, and market size for each segment.
  • Key Takeaways:
    • Market sizing assists businesses in understanding the potential of a market before entering with a new product or service.
    • The process involves defining the target market, assessing product interest, and calculating potential sales.
    • A bottom-up approach based on detailed data is more accurate than a top-down approach based on generalized market data.
    • Market sizing is an iterative process that requires a detailed understanding of the target audience and potential sales volume.

Case Studies

Smartphone MarketIn the smartphone industry, market sizing involves estimating the total number of potential smartphone users or the total market value. This helps manufacturers and app developers assess the market’s size and growth potential.– Guides product development and marketing strategies. – Attracts investors and informs business decisions. – Provides insights into market share and competition.Market sizing for the global smartphone market may involve estimating the number of smartphone users worldwide and their preferences. This information helps companies like Apple and Samsung plan their product launches and marketing campaigns.
E-commerce MarketMarket sizing in the e-commerce industry involves estimating the total sales or revenue potential for online retail. It helps e-commerce businesses gauge market opportunities, set growth targets, and allocate resources effectively.– Supports business planning and resource allocation. – Assists in identifying niche markets and trends. – Informs pricing and marketing strategies.For e-commerce businesses, market sizing can involve estimating the total online retail sales in a specific region or category, such as fashion, electronics, or groceries. This information aids companies like Amazon and Alibaba in their expansion strategies.
Electric Vehicle MarketMarket sizing in the electric vehicle (EV) industry involves estimating the total demand for electric cars, including passenger vehicles and commercial fleets. It helps manufacturers and investors assess the growth potential of the EV market.– Guides production capacity and supply chain management. – Attracts investment for research and development. – Informs government policies and incentives.Market sizing for the global EV market may include estimating the number of electric cars on the road, the growth rate, and the potential demand for charging infrastructure. Automakers like Tesla and traditional manufacturers use this data for product planning.
Healthcare MarketIn the healthcare industry, market sizing can involve estimating the total addressable market (TAM) for a specific medical device, pharmaceutical, or healthcare service. It helps companies assess market potential and competition.– Informs pricing, market entry, and distribution strategies. – Guides research and development investments. – Supports market share and growth projections.Pharmaceutical companies may estimate the TAM for a new drug, considering factors like the prevalence of the targeted disease and potential patient demographics. Medical device manufacturers use market sizing to assess demand for their products, such as MRI machines.
Cloud Computing MarketMarket sizing in the cloud computing industry involves estimating the total revenue potential for cloud services, including infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS).– Assists cloud providers in capacity planning and pricing strategies. – Informs investment decisions and market positioning. – Helps customers select suitable cloud solutions.Cloud providers like Amazon Web Services (AWS) estimate the global cloud market size by considering factors such as businesses’ migration to the cloud, data storage requirements, and demand for cloud-based applications.
Renewable Energy MarketMarket sizing in the renewable energy sector involves estimating the potential demand for renewable energy sources like solar, wind, and hydroelectric power. It helps companies and governments plan energy infrastructure and policies.– Guides investment decisions in renewable energy projects. – Supports government incentives and regulations. – Informs sustainability and environmental initiatives.A market sizing analysis for the solar energy market may involve estimating the demand for solar panels and installations based on factors like energy consumption, government incentives, and environmental goals. Solar companies use this data for business planning.
Video Streaming MarketIn the video streaming industry, market sizing helps estimate the total number of potential subscribers and the market’s revenue potential. This assists streaming platforms in content acquisition, pricing, and user acquisition strategies.– Informs content acquisition and licensing negotiations. – Guides pricing and packaging strategies. – Assists in user acquisition and retention efforts.Market sizing for a video streaming platform may involve estimating the number of potential subscribers based on demographics, content preferences, and competitive analysis. Companies like Netflix and Disney+ use this data for content planning.
Autonomous Vehicle MarketMarket sizing in the autonomous vehicle industry involves estimating the potential demand for self-driving cars and associated technologies. It helps manufacturers, tech companies, and policymakers plan for autonomous vehicle adoption.– Guides research and development investments and timelines. – Supports regulatory and safety considerations. – Informs business models and partnerships.Autonomous vehicle market sizing may include estimating consumer acceptance, regulatory developments, and the growth of ride-hailing services. Companies like Waymo and traditional automakers use this data for autonomous vehicle development.
Cybersecurity MarketIn the cybersecurity sector, market sizing estimates the potential demand for cybersecurity solutions, including software, hardware, and services. It helps cybersecurity companies assess market opportunities and competitive landscapes.– Informs product development and feature prioritization. – Guides pricing strategies and go-to-market plans. – Assists in targeting specific industries and regions.Market sizing for the cybersecurity market may involve estimating the spending on cybersecurity by businesses, government agencies, and industries prone to cyber threats. Companies like Palo Alto Networks and McAfee use this data for market positioning.
Sustainable Packaging MarketIn the sustainable packaging industry, market sizing estimates the potential demand for eco-friendly packaging materials and solutions. It helps packaging companies assess opportunities for sustainable product offerings.– Guides product development and material sourcing strategies. – Informs pricing and marketing efforts for eco-friendly products. – Supports sustainability goals and environmental initiatives.Market sizing for sustainable packaging may involve estimating the adoption of eco-friendly packaging materials by consumer goods companies and the growth of environmentally conscious consumers. Packaging companies use this data for sustainable product planning.

Related Market Development Frameworks


A total addressable market or TAM is the available market for a product or service. That is a metric usually leveraged by startups to understand the business potential of an industry. Typically, a large addressable market is appealing to venture capitalists willing to back startups with extensive growth potential.

Niche Targeting

A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.

Market Validation

In simple terms, market validation is the process of showing a concept to a prospective buyer and collecting feedback to determine whether it is worth persisting with. To that end, market validation requires the business to conduct multiple customer interviews before it has made a significant investment of time or money. A transitional business model is an example of market validation that helps the company secure the needed capital while having a market reality check. It helps shape the long-term vision and a scalable business model.

Market Orientation

Market orientation is an approach to business where the company focuses more on the behaviors, wants, and needs of customers in its market. A company will first target a niche market to prove a commercial use case. And from there, it will create options to scale.

Market-Expansion Strategy

In a tech-driven business world, companies can move toward market expansion by creating options to scale via niches. Thus leveraging transitional business models to scale further and take advantage of non-linear competition, where today’s niches become tomorrow’s legacy players.

Stages of Digital Transformation

Digital and tech business models can be classified according to four levels of transformation into digitally-enabled, digitally-enhanced, tech or platform business models, and business platforms/ecosystems.

Platform Business Model Strategy

A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.

Business Platform Theory


Business Scaling

Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.

Strategy Lever Framework

Developing a successful business strategy is about finding the proper niche, where to launch an initial version of your product to create a feedback loop and improve fast while making sure not to run out of money. And from there create options to scale to adjacent niches.

Connected Analysis Frameworks

Failure Mode And Effects Analysis

A failure mode and effects analysis (FMEA) is a structured approach to identifying design failures in a product or process. Developed in the 1950s, the failure mode and effects analysis is one the earliest methodologies of its kind. It enables organizations to anticipate a range of potential failures during the design stage.

Agile Business Analysis

Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Business Valuation

Business valuations involve a formal analysis of the key operational aspects of a business. A business valuation is an analysis used to determine the economic value of a business or company unit. It’s important to note that valuations are one part science and one part art. Analysts use professional judgment to consider the financial performance of a business with respect to local, national, or global economic conditions. They will also consider the total value of assets and liabilities, in addition to patented or proprietary technology.

Paired Comparison Analysis

A paired comparison analysis is used to rate or rank options where evaluation criteria are subjective by nature. The analysis is particularly useful when there is a lack of clear priorities or objective data to base decisions on. A paired comparison analysis evaluates a range of options by comparing them against each other.

Monte Carlo Analysis

The Monte Carlo analysis is a quantitative risk management technique. The Monte Carlo analysis was developed by nuclear scientist Stanislaw Ulam in 1940 as work progressed on the atom bomb. The analysis first considers the impact of certain risks on project management such as time or budgetary constraints. Then, a computerized mathematical output gives businesses a range of possible outcomes and their probability of occurrence.

Cost-Benefit Analysis

A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a cost analysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.

CATWOE Analysis

The CATWOE analysis is a problem-solving strategy that asks businesses to look at an issue from six different perspectives. The CATWOE analysis is an in-depth and holistic approach to problem-solving because it enables businesses to consider all perspectives. This often forces management out of habitual ways of thinking that would otherwise hinder growth and profitability. Most importantly, the CATWOE analysis allows businesses to combine multiple perspectives into a single, unifying solution.

VTDF Framework

It’s possible to identify the key players that overlap with a company’s business model with a competitor analysis. This overlapping can be analyzed in terms of key customers, technologies, distribution, and financial models. When all those elements are analyzed, it is possible to map all the facets of competition for a tech business model to understand better where a business stands in the marketplace and its possible future developments.

Pareto Analysis

The Pareto Analysis is a statistical analysis used in business decision making that identifies a certain number of input factors that have the greatest impact on income. It is based on the similarly named Pareto Principle, which states that 80% of the effect of something can be attributed to just 20% of the drivers.

Comparable Analysis

A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company. To find comparables you can look at two key profiles: the business and financial profile. From the comparable company analysis it is possible to understand the competitive landscape of the target organization.

SWOT Analysis

A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

PESTEL Analysis

The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

Business Analysis

Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.

Financial Structure

In corporate finance, the financial structure is how corporations finance their assets (usually either through debt or equity). For the sake of reverse engineering businesses, we want to look at three critical elements to determine the model used to sustain its assets: cost structure, profitability, and cash flow generation.

Financial Modeling

Financial modeling involves the analysis of accounting, finance, and business data to predict future financial performance. Financial modeling is often used in valuation, which consists of estimating the value in dollar terms of a company based on several parameters. Some of the most common financial models comprise discounted cash flows, the M&A model, and the CCA model.

Value Investing

Value investing is an investment philosophy that looks at companies’ fundamentals, to discover those companies whose intrinsic value is higher than what the market is currently pricing, in short value investing tries to evaluate a business by starting by its fundamentals.

Buffet Indicator

The Buffet Indicator is a measure of the total value of all publicly-traded stocks in a country divided by that country’s GDP. It’s a measure and ratio to evaluate whether a market is undervalued or overvalued. It’s one of Warren Buffet’s favorite measures as a warning that financial markets might be overvalued and riskier.

Financial Analysis

Financial accounting is a subdiscipline within accounting that helps organizations provide reporting related to three critical areas of a business: its assets and liabilities (balance sheet), its revenues and expenses (income statement), and its cash flows (cash flow statement). Together those areas can be used for internal and external purposes.

Post-Mortem Analysis

Post-mortem analyses review projects from start to finish to determine process improvements and ensure that inefficiencies are not repeated in the future. In the Project Management Book of Knowledge (PMBOK), this process is referred to as “lessons learned”.

Retrospective Analysis

Retrospective analyses are held after a project to determine what worked well and what did not. They are also conducted at the end of an iteration in Agile project management. Agile practitioners call these meetings retrospectives or retros. They are an effective way to check the pulse of a project team, reflect on the work performed to date, and reach a consensus on how to tackle the next sprint cycle.

Root Cause Analysis

In essence, a root cause analysis involves the identification of problem root causes to devise the most effective solutions. Note that the root cause is an underlying factor that sets the problem in motion or causes a particular situation such as non-conformance.

Blindspot Analysis


Break-even Analysis

A break-even analysis is commonly used to determine the point at which a new product or service will become profitable. The analysis is a financial calculation that tells the business how many products it must sell to cover its production costs.  A break-even analysis is a small business accounting process that tells the business what it needs to do to break even or recoup its initial investment. 

Decision Analysis

Stanford University Professor Ronald A. Howard first defined decision analysis as a profession in 1964. Over the ensuing decades, Howard has supervised many doctoral theses on the subject across topics including nuclear waste disposal, investment planning, hurricane seeding, and research strategy. Decision analysis (DA) is a systematic, visual, and quantitative decision-making approach where all aspects of a decision are evaluated before making an optimal choice.

DESTEP Analysis

A DESTEP analysis is a framework used by businesses to understand their external environment and the issues which may impact them. The DESTEP analysis is an extension of the popular PEST analysis created by Harvard Business School professor Francis J. Aguilar. The DESTEP analysis groups external factors into six categories: demographic, economic, socio-cultural, technological, ecological, and political.

STEEP Analysis

The STEEP analysis is a tool used to map the external factors that impact an organization. STEEP stands for the five key areas on which the analysis focuses: socio-cultural, technological, economic, environmental/ecological, and political. Usually, the STEEP analysis is complementary or alternative to other methods such as SWOT or PESTEL analyses.

STEEPLE Analysis

The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.

Activity-Based Management

Activity-based management (ABM) is a framework for determining the profitability of every aspect of a business. The end goal is to maximize organizational strengths while minimizing or eliminating weaknesses. Activity-based management can be described in the following steps: identification and analysis, evaluation and identification of areas of improvement.

PMESII-PT Analysis

PMESII-PT is a tool that helps users organize large amounts of operations information. PMESII-PT is an environmental scanning and monitoring technique, like the SWOT, PESTLE, and QUEST analysis. Developed by the United States Army, used as a way to execute a more complex strategy in foreign countries with a complex and uncertain context to map.

SPACE Analysis

The SPACE (Strategic Position and Action Evaluation) analysis was developed by strategy academics Alan Rowe, Richard Mason, Karl Dickel, Richard Mann, and Robert Mockler. The particular focus of this framework is strategy formation as it relates to the competitive position of an organization. The SPACE analysis is a technique used in strategic management and planning. 

Lotus Diagram

A lotus diagram is a creative tool for ideation and brainstorming. The diagram identifies the key concepts from a broad topic for simple analysis or prioritization.

Functional Decomposition

Functional decomposition is an analysis method where complex processes are examined by dividing them into their constituent parts. According to the Business Analysis Body of Knowledge (BABOK), functional decomposition “helps manage complexity and reduce uncertainty by breaking down processes, systems, functional areas, or deliverables into their simpler constituent parts and allowing each part to be analyzed independently.”

Multi-Criteria Analysis

The multi-criteria analysis provides a systematic approach for ranking adaptation options against multiple decision criteria. These criteria are weighted to reflect their importance relative to other criteria. A multi-criteria analysis (MCA) is a decision-making framework suited to solving problems with many alternative courses of action.

Stakeholder Analysis

A stakeholder analysis is a process where the participation, interest, and influence level of key project stakeholders is identified. A stakeholder analysis is used to leverage the support of key personnel and purposefully align project teams with wider organizational goals. The analysis can also be used to resolve potential sources of conflict before project commencement.

Strategic Analysis

Strategic analysis is a process to understand the organization’s environment and competitive landscape to formulate informed business decisions, to plan for the organizational structure and long-term direction. Strategic planning is also useful to experiment with business model design and assess the fit with the long-term vision of the business.

Related Strategy Concepts: Go-To-Market StrategyMarketing StrategyBusiness ModelsTech Business ModelsJobs-To-Be DoneDesign ThinkingLean Startup CanvasValue ChainValue Proposition CanvasBalanced ScorecardBusiness Model CanvasSWOT AnalysisGrowth HackingBundlingUnbundlingBootstrappingVenture CapitalPorter’s Five ForcesPorter’s Generic StrategiesPorter’s Five ForcesPESTEL AnalysisSWOTPorter’s Diamond ModelAnsoffTechnology Adoption CurveTOWSSOARBalanced ScorecardOKRAgile MethodologyValue PropositionVTDF FrameworkBCG MatrixGE McKinsey MatrixKotter’s 8-Step Change Model.

Main Guides:

About The Author

Scroll to Top