Benefits of calculating market capacity
Posted: Tue Jan 28, 2025 6:24 am
In order to effectively develop the next direction in entrepreneurship and master new market segments, at the initial stages of business planning, the company should calculate the market capacity. This way, it is possible to estimate the potential benefits from engaging in a particular type of business activity.
In this calculation, you simply make a forecast of the level of potential sales. Usually, a period of 12 months is taken. The number of companies that are already successfully operating in this segment is determined. In addition, it is worth considering how satisfied consumers are with the amount of goods or services provided (how much demand corresponds to supply on the market). If you ignore this data, then the launch of a new product will obviously be unprofitable.
When you start determining the south korea email list market capacity, you can calculate both the potential and the actual figure. The potential should be several times greater than the actual consumption volumes. Potential sales volumes are calculated in rubles or tons.
When determining the existing market capacity, indicators are used that reflect the scale of the company, production capacity, sales and purchase volumes, customer base, etc. Statistical data, marketing research results, various information from open sources, as well as information about competitors are taken. Potential, or probable, market capacity is a value that is determined using expert assessment and forecasting methods, when currently existing dependencies are projected onto future periods.
The found value of the possible sales volume is extremely important for the enterprise strategy regarding its penetration into a certain niche of economic relations. The probable value of the market capacity is calculated by adding the actual size and potential of the company.
Benefits of calculating market capacity
If the difference between the obtained values of potential and actual capacity is large enough, then there are prospects for further work and advancement in this niche. If the situation is the opposite, i.e. the difference in figures is insignificant, this means that the market is already oversaturated with this category of goods. It is hardly worth investing your resources in this direction. Even if you make a profit, it will be insignificant compared to the costs incurred.
By conducting a market capacity analysis, certain positive consequences can be obtained, such as:
increasing the relevance of forecasts for future sales volumes of goods and services and the effectiveness of advertising campaigns;
development of a precise marketing strategy for the company, and therefore sales planning;
Calculating the current market capacity indicator will allow the company to determine not only its place in the system of business relations, but also the share of sales of direct competitors. You must agree that knowing the position of competitors, both strong and slightly weaker than you, is strategically no less important.
In this calculation, you simply make a forecast of the level of potential sales. Usually, a period of 12 months is taken. The number of companies that are already successfully operating in this segment is determined. In addition, it is worth considering how satisfied consumers are with the amount of goods or services provided (how much demand corresponds to supply on the market). If you ignore this data, then the launch of a new product will obviously be unprofitable.
When you start determining the south korea email list market capacity, you can calculate both the potential and the actual figure. The potential should be several times greater than the actual consumption volumes. Potential sales volumes are calculated in rubles or tons.
When determining the existing market capacity, indicators are used that reflect the scale of the company, production capacity, sales and purchase volumes, customer base, etc. Statistical data, marketing research results, various information from open sources, as well as information about competitors are taken. Potential, or probable, market capacity is a value that is determined using expert assessment and forecasting methods, when currently existing dependencies are projected onto future periods.
The found value of the possible sales volume is extremely important for the enterprise strategy regarding its penetration into a certain niche of economic relations. The probable value of the market capacity is calculated by adding the actual size and potential of the company.
Benefits of calculating market capacity
If the difference between the obtained values of potential and actual capacity is large enough, then there are prospects for further work and advancement in this niche. If the situation is the opposite, i.e. the difference in figures is insignificant, this means that the market is already oversaturated with this category of goods. It is hardly worth investing your resources in this direction. Even if you make a profit, it will be insignificant compared to the costs incurred.
By conducting a market capacity analysis, certain positive consequences can be obtained, such as:
increasing the relevance of forecasts for future sales volumes of goods and services and the effectiveness of advertising campaigns;
development of a precise marketing strategy for the company, and therefore sales planning;
Calculating the current market capacity indicator will allow the company to determine not only its place in the system of business relations, but also the share of sales of direct competitors. You must agree that knowing the position of competitors, both strong and slightly weaker than you, is strategically no less important.