It often happens that a businessman has chosen a certain niche for his business. He considers it promising, but in reality there are simply no clients in this market. Or, on the contrary, it is overcrowded with goods and competitors. Then it will be extremely difficult to build a successful business. That is why before opening or expanding a company, it is important to consider such a parameter as “market capacity”.
This indicator helps to assess the scale of the local or global market, the number of potential target audience, to find out how much money is on the market, what share you can count on. Strategic planning, positioning and the correctness of making management decisions when creating or expanding a business will depend on these input data.
In this article, we will examine in detail what market capacity is. We will determine how to correctly calculate capacity, what it is measured in, and what types there are. We will also find out why companies need to calculate capacity, why it is important, and we will analyze the calculations using an example.
What is market capacity and how is it measured?
Market capacity is an important economic metric that shows the largest c level contact list volume of products that consumers can buy in a given market in a given period of time. Simply put, market capacity reflects its potential.
The indicator can cover current demand and potential demand, which is more often realized under favorable conditions, such as price reductions, product range expansion, or the launch of new marketing campaigns.
For example, if the smartphone market in a certain region is estimated at 1 million units per year, then this is the current market capacity. However, the actual capacity may online course curator – who is it? change depending on the level of average current income of consumers, the emergence of new technologies or competitors, and changes in the market structure.
How is market capacity measured?
There are two options for how to measure the capacity of a region, city, country, or world:
1. Quantitative capacity of the market – in pieces, physical volume:
Goods are measured in pieces, liters, kilograms and other physical units. Such an assessment is needed to understand how much product or material needs to be produced.
Measured in money – rubles, dollars, euros. This type of metric allows america email list you to understand what income can be obtained. The greater the monetary capacity of the market, the higher the potential profit .
What is the market capacity?
There are several types of market capacity: potential, actual and available. This is one of the approaches to determining capacity in general. Within the approach, each type reflects a certain amount of capacity and is needed for specific situations, making management decisions.