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7. Market analysis

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Guidance on writing the 'Market analysis' section of your business plan.

Background

Use this section to show your understanding of the market you’re working in and what external factors could affect your organisation.

7.1 PESTEL analysis

Complete a PESTEL analysis

A PESTEL analysis is a simple tool that allows you to identify big external trends and drivers that could have a positive or negative impact on your business. (PESTEL stands for political, economic, social, technological, environmental and legal: the six areas that the analysis covers.)

For voluntary organisations, this is often to do with the policy (political) environment or the changing needs of their beneficiaries (social). However, all the sections are important, and you might come up with challenges and opportunities that you hadn’t thought of before.

Work with your colleagues to complete the table.

PoliticalEconomicSocialTechnologicalEnvironmentalLegal

Government policy

Changes to government

Funding opportunities

Economic environment (interest rates, consumer spending)

Lifestyle or cultural factors affecting your customers or beneficiaries

Public attitudes

Emerging technologies

Data and information

Weather

Climate change

Pollution

Waste and recycling

Regulation

Law

Standards

Add a short paragraph to describe how you’ve used PESTEL as part of your business planning

You should show that you’re prepared to deal with upcoming challenges or take advantage of opportunities.

As a voluntary organisation, you might not be in a position to act on every opportunity because of a lack of time or resources. Highlight those that you plan to focus on and describe why you think they’re most important.

7.2 Competitor analysis

Most voluntary organisations will be used to competing for funds, often with organisations who are doing similar work. If you’ve ever applied for a grant, you’ll have had to state why you’re best placed to deliver the desired outcomes.

Competitor analysis is an extension of this: you need to think about where you’re stronger and weaker than your competitors in terms of delivering what the customer needs or wants.

7.2.1. Who are our competitors?

Include a short description of how you’ve identified your competitors

If you’re trading with customers, your competitors are not always obvious. Think about who is competing for the customer’s money.

For example, if you’re a charity that offers a teaching product to schools, such as an outdoor classroom, you’re not just competing with other organisations that offer outdoor classrooms: you’re competing with all the organisations that offer teaching products to schools in your area.

These products might be completely different to yours, but the school has to make a decision whether to allocate their budget to you or another provider; they might choose a completely different activity. It’s up to you to understand what the school’s priorities are, how you complement the curriculum and what their budget allows. You’ll then have a better understanding of how you compare with your competitors.

7.2.2 Table of competitors

Fill in a table of competitors with as much information as you can find out

Do this by reading annual reports, looking at data from the Charity Commission or Companies House, or mystery shopping.

WhoWhatTarget marketPrice rangeStrengthsWeaknesses

Company name, location and size (turnover, employees)

Legal status (limited company, charity)

What do they do (products and services)?

Who are their key customers (age, location, social group)?

Price for similar products/services to yours

What price bracket they are aiming at (eg mid-range, low budget)?

Eg size, experience, brand recognition, quality

Eg quality, reliability, out-dated, not local

7.2.3 SWOT analysis

Complete a SWOT analysis

A SWOT (strengths, weaknesses, opportunities and threats) analysis is a tool to help you work out how to stand out from the competition. You can complete it as a group exercise with colleagues or, ideally, with some of your customers or beneficiaries.

StrengthsWeaknessesOpportunitiesThreats

What you’re good at and why people choose or trust you over others

Areas where you’re not as strong or things that you find it hard to keep on top of

Key opportunities to improve and grow your business (you can identify these with your PESTEL analysis)

Anything that could damage your business or reputation, or give your competitors an advantage (you can identify these with your PESTEL analysis)

7.2.4 Summary

Give a short summary of what you’ve learnt about your competitors and how you’ll stand out from the crowd

Don’t just dismiss your competitors – you can always learn something from how other organisations operate.

  • Who are your biggest competitors and how will you use your strengths to compete with them?
  • Do you have any plans to work with your competitors?
  • What makes you and your product or service unique? Why will customers choose you over others?
Page last edited Jun 18, 2018

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