04 Market Analysis

Market Analysis Skill

Use When

• Use when proving that the opportunity sits inside a real, financeable market.
• Use when building or reviewing TAM, SAM, SOM, industry trends, or regulatory context.
• Use when revenue assumptions need external market grounding.

Do Not Use When

• Do not use as a substitute for target-customer or competitor analysis.
• Do not use to justify numbers with unsourced optimism.
• Do not use top-down market size alone when a bottom-up view is needed for credibility.

Required Inputs

• Business model, product or service type, and geography
• Customer segments and revenue logic
• Available market data, industry reports, regulatory context, and country assumptions
• Any financial assumptions that depend on market size, growth, or demand dynamics

Workflow

1. Define the market question the section must prove.
2. Build the industry overview, growth logic, and regulatory frame.
3. Size TAM, SAM, and SOM using both top-down and bottom-up logic where possible.
4. Identify the key demand drivers, barriers, and industry structure.
5. Reconcile the market section with pricing, volume, and growth assumptions in the financial model.
6. Flag weak evidence, estimated figures, and further validation needs.

Quality Bar

• Market size and growth claims are sourced or transparently estimated.
• The section proves relevance for this business, not just industry size.
• Market logic supports the revenue ramp in the financial model.
• The reader can see why this market is attractive and accessible now.

Anti-Patterns

• Copying generic industry summaries that do not connect to the business model.
• Using TAM as if it were the realistic revenue opportunity.
• Presenting growth rates without source quality or method clarity.
• Ignoring regulation, barriers, or demand friction.

Outputs

• Market analysis section
• TAM, SAM, SOM and growth logic
• Key market drivers, barriers, and regulatory factors
• A list of market assumptions that must align with later sections

Generate a data-driven market analysis that proves the business operates in a viable, growing market worth investing in.

Required Elements

1. Industry overview Current state, structure, dynamics, and marketing evolution stage
2. Market size TAM, SAM, SOM with dual methodology
3. Growth rate and trends Historical and projected CAGR
4. Market drivers Forces fuelling growth (technology, regulation, demographics, AI adoption)
5. Market barriers Entry barriers, switching costs, regulatory hurdles
6. Regulatory environment Laws, licences, compliance requirements
7. Industry lifecycle stage Emerging, growing, mature, or declining
8. Key industry players Major companies and estimated market share
9. Market share metrics How share is measured in this industry (Farris)
10. Data sources Citation for every claim

Market Sizing Methodology

Use both approaches and reconcile (investors flag plans using only top-down):

Bottom-up (preferred):

Number of potential customers
  x Average revenue per customer
  x Realistic conversion rate
  = SOM (Serviceable Obtainable Market)

Top-down:

Total industry revenue
  x Relevant segment percentage
  x Obtainable share percentage
  = SOM cross-check

SOM Reasonableness Rules

• Startups: SOM typically 1-5% of SAM in years 1-3
• Established businesses entering new markets: 5-15% of SAM
• If SOM exceeds 20% of SAM, provide extraordinary justification
• TAM SAM narrowing must show clear filtering criteria

Market Share Metrics (Farris)

Define how market share is measured in this industry:

Marketing Evolution Context (Kotler 6.0)

Position the industry within Kotler's marketing evolution framework:

Identify where the target industry sits and where it is heading this signals market trajectory to investors.

Generation Process

1. Ask for: industry, geography, target segment, business model
2. Research or estimate market size using both methodologies
3. Identify 3-5 key trends shaping the industry
4. Document regulatory landscape
5. Map competitive ecosystem (detailed in section 06)
6. Position industry on Kotler's evolution curve
7. Define how market share is measured in this industry
8. Cite all data sources flag estimates clearly as "estimated"

Quality Criteria

• Market size uses bottom-up methodology, not just top-down
• Both methods reconcile within 30% of each other
• Growth claims cite sources or are flagged as estimates
• TAM/SAM/SOM shows logical narrowing with clear filters
• SOM passes the reasonableness rules above
• Trends are specific to this industry, not generic macro trends
• Regulatory risks are acknowledged honestly
• Market share metrics are defined for this specific industry

Market Type Classification

Before sizing the market, classify its type this changes everything about strategy, spending, and timeline (Blank & Dorf, 2012):

Use the cost-of-entry thresholds to assess competitive feasibility: 74%+ = monopoly (avoid head-on), 41%+ = market leader (re-segment instead), <26% = fragmented (easiest entry). See references/market-type-entry-analysis.md.

Industry Structure Analysis (Porter)

Beyond market sizing, assess the structural attractiveness of the industry using Porter's analytical frameworks:

Industry Lifecycle Stage (Porter's critique of the Product Life Cycle)

Rather than mechanically applying the standard introduction growth maturity decline model (which Porter shows is unreliable), identify the driving forces that are actively changing industry structure:

Strategic Group Mapping

Cluster competitors into strategic groups firms following similar strategies along key dimensions (price position, quality, geographic coverage, vertical integration, brand investment). This reveals:

• Which firms are direct competitors (same strategic group) vs. indirect (different group)
• Whether any strategic position is unoccupied and whether this is an opportunity or a structural impossibility
• Which group is in the most structurally attractive position (faces weakest Five Forces)

Cross-reference: references/industry-structure-porter.md for the complete framework including strategic dimensions, mobility barriers, industry evolution driving forces, and Uganda/EA application notes.

References

• Industry structure, strategic groups, and industry evolution: See references/industry-structure-porter.md for strategic group mapping methodology, dimensions of competitive strategy, mobility barriers, industry evolution driving forces, product life cycle critique, and Uganda/EA application notes from Porter (1980)
• Market metrics and formulas: See references/market-metrics.md for comprehensive market measurement formulas, market share calculations, and industry analysis metrics from Farris
• Industry trend analysis: See references/industry-trends.md for trend identification frameworks, digital transformation indicators, and phygital marketing evolution from Kotler 6.0
• Marketing research methodology: See references/marketing-research-methodology.md for the complete marketing research process, secondary data evaluation criteria, research design selection (exploratory/descriptive/causal), sampling methods with sample size formulas, statistical analysis techniques for market analysis, and research report formatting from Hair, Ortinau & Harrison
• Market strategy frameworks: See references/market-strategy-frameworks.md for market sizing methods (6 methods including marketcrafting), HOOF demand forecasting, Porter's Five Forces with rating methodology, Value Net framework (complementors and cooperative dynamics), PESTEL environmental analysis, industry life cycle (S-curve phases), customer buying criteria (E2-P2-R2), and key success factor derivation from Evans, Harris & Lenox, and Fahey & Randall
• Market type and entry analysis: See references/market-type-entry-analysis.md for four market types (existing/new/re-segmented/clone), cost-of-entry thresholds from military OR (74%/41%/26% rules), revenue growth curves by market type, bottom-up vs. top-down estimation, Business Context Map (6-sector environmental scan), and market segmentation criteria from Blank & Dorf (2012), Cooper & Vlaskovits (2010), and Alam
• Uganda macroeconomic context (202526): See references/uganda-macro-context-2025.md for current Uganda GDP, exchange rates, inflation by category, population data, labour market statistics, poverty rates by region, household expenditure patterns, and financial access data from UBOS (CPI Feb 2026, UNHS 2023/24, NLFS 2021, KEI Q1 2025/26) and World Bank (Uganda Economic Update 2023). Read this file whenever sizing a Uganda market, citing inflation assumptions, or estimating consumer purchasing power.
• Uganda economic outlook World Bank & AfDB (2025): See references/uganda-economic-outlook-worldbank-afdb.md for comprehensive quantitative data across 10 domains: GDP growth trajectory (FY22FY27 including oil-boom FY27 projection of 9.8%), sectoral performance, interest rates and lending rates, exchange rate history, public debt, fiscal operations, export data (coffee, gold, tourism), FDI, poverty headcount (old and new IPL), agriculture productivity gaps vs. Kenya/Tanzania/Rwanda, oil pipeline (EACOP) timeline, climate shock projections, Africa-wide context from AfDB AEO 2025, and stress test reference data. Sources: World Bank UEU-21 (June 2023), World Bank UEU-26 (December 2025), AfDB AEO 2025. Use this file for macroeconomic framing, sector benchmarking, risk sections, and any forward-looking projections beyond FY25.
• Uganda private sector markets IFC/World Bank CPSD (2022): See references/uganda-private-sector-markets.md for private sector structure data, investment climate indicators, financial sector benchmarks (credit to private sector 14.2% GDP; SME loan access 6% vs Kenya 44%; lending rates 19.26%), and detailed sector opportunity assessments for agribusiness (fish, dairy, maize), energy (installed capacity 1,252 MW; SHS market 428,100 units), and housing (2 million unit shortfall; 180,000 units/year needed; 76% of households low income). Also covers cross-cutting constraints (infrastructure, trade, skills, land) and digital economy opportunity. Source: IFC/World Bank Country Private Sector Diagnostic, February 2022. Read when sizing Uganda markets, assessing investment climate risk, or benchmarking against regional peers (Kenya, Rwanda, Tanzania).
• AfCFTA and East Africa trade framework: See references/afcfta-ea-trade-framework.md for Uganda's participation in AfCFTA (54 countries, $3.4T GDP market), EAC Common External Tariff structure (0%/10%/25%), Rules of Origin (35% local value-added for zero tariff), Uganda's six trade agreements (EAC, COMESA, AfCFTA, EBA, AGOA, UK DCTS), May 2025 export destination data (Middle East 34.4%, EAC 25%, EU 19.1%), top exports (gold $3.16B, coffee $990M), PAPSS for local currency cross-border payments, EUDR compliance requirements (effective 31 Dec 2025, applies to coffee/cocoa/timber), and practical implications for plan authors. Cross-reference references/eac-trade-data-2024.md for 202425 statistics. Read when the business has export potential, imports from outside EAC, or needs to size the regional market beyond Uganda.
• EAC trade data 20242025: See references/eac-trade-data-2024.md for current quantitative trade benchmarks Uganda export growth 22% in 2024 and 50% in JanMay 2025; Uganda AfCFTA export potential US$178.2M (dairy $178M, coffee $101M, sugar $86M, wood $84M, ferrous metals $112M); EAC total trade US$11B 2024; NTB count rising (1048 between Nov 2024 and May 2025); OSBP impact (79% border time reduction); EAC regional value chain participation only 1.7% of gross exports. Sources: UNECA Sep 2025, de Melo/Twum FERDI 2020, EAC/TradeMark Africa Apr 2024. Use for current market sizing figures when the business targets exports or competes with imported goods.
• EAC Common Market Framework: See references/eac-common-market-framework.md for EAC Common Market Protocol seven freedoms (goods, persons, labour, establishment, residence, services, capital); free movement of workers and no work permit fees for EAC nationals (Art. 10); mutual recognition of qualifications (EAQFHE 2015); right of establishment for EAC companies; regional value chain opportunities (dairy, maize, tourism) with Uganda's structural position; Uganda SME export pathways; cross-border hiring implications; overlapping EAC/IGAD frameworks. Sources: EAC Common Market Protocol 2009, Daly et al./IGC 2016, IOM/BRMM 2022. Read when the business has regional expansion plans, is hiring EAC nationals, or needs to understand market access rights within the EAC bloc.
• Uganda human capital development (World Bank, 2025): See references/uganda-human-capital-2025.md for the World Bank's full analysis of Uganda's human capital trajectory HCI score 0.39 (2022), Vision 2040 GDP targets (US$50B US$500B, per capita US$1,046 US$7,000), demographic dividend framing (46M population, >50% under-18, 104M projected by 2060, 1.11.2M new workers/year), education statistics (LAYS 4.3, 57% of P6 pupils below literacy minimum, education spend only 2.7% of GDP), health outcomes table (life expectancy 68.5 years, maternal mortality 189 per 100,000), WASH gaps (12M without basic water, 38M without safe sanitation), social protection coverage (3% of population), and public investment requirements to hit Vision 2040. Read when framing demographic market drivers, sizing growth in consumer or social-sector markets, or establishing Uganda's development context in the opening of any market analysis section.
• Uganda agriculture sector data (2021/22): See references/uganda-agriculture-survey-2022.md for crop production benchmarks (maize 1.5 MT/ha, coffee 265,000 MT total, banana 10M MT), livestock prevalence by species and region, input adoption rates (fertiliser 58 kg/ha nationally, irrigation 0.7% of HHs, improved seed 4%), farm size distribution (avg 1.3 Ha), market access data (avg 7.1 km to market), agro-processing sector (65% of manufacturing, USD 13.24B value), and regional benchmarks for all 14 sub-regions. Source: UBOS AAS 2021/22; WB UEU-26 2025. Read when sizing agricultural markets, planning agribusiness models, benchmarking crop yields, or analysing agro-input business potential.
• Uganda tourism sector: See references/uganda-tourism-sector.md
• AfDB African Economic Outlook 2025: See references/africa-economic-outlook-2025.md for Africa-wide GDP projections (3.9% 2025, 4.0% 2026), East Africa regional performance (5.9% 202526 fastest growing), country profiles (Uganda 6.8%/4.1% inflation; Tanzania 5.9%/3.3% lowest inflation; Rwanda 7.7%; Kenya 4.9%), USD 1.43T domestic capital mobilisation potential across five forms (fiscal/natural/financial/business/human), downside risk tiers (US tariffs, aid cuts, climate, debt distress), and strategic opportunities (AfCFTA, beneficiation, diaspora). Read when framing continental macro context, projecting East Africa growth, or assessing risk factors for 20252026 business plans.
• East Africa mineral resource governance: See references/ea-mineral-governance.md for country-by-country mineral production data (Tanzania/Kenya/Uganda/Rwanda/Burundi), royalty rates by country (Tanzania 45% metals, 1% clearing fee), World Bank governance indicators for all five EAC states, IFF risk (USD 3052B/year, >50% from extractives, Acacia Mining precedent), ASM employment data (Uganda 300K direct/5M dependent), local content compliance cost estimates (Tanzania 1525%, Uganda/Kenya 1015%), EITI participation status, and jurisdiction selection tier guide. Read when writing market analysis or risk sections for mining/extractive ventures in East Africa.
• Africa-wide trade and economic outlook (2025): See references/africa-trade-outlook-2025.md for Africa GDP growth trajectory (3.4% continental avg; Eastern Africa 4.4%), East Africa country projections (Uganda 6.8% 2025, Kenya 5.3%, Tanzania 6.0%, Rwanda 7.2%), Africa total goods trade US$1,401B (+5.8%), intra-African trade US$208B (+7.7% AfCFTA effect), Uganda credit rating downgrade (B3 Moody's), commodity price gains (coffee +46%, gold +23%), fiscal balance trajectories, and Africa debt/inflation context. Source: Afreximbank ATO 2025. Read when framing continental/regional macro context, benchmarking Uganda against EA peers, or assessing trade-related market opportunities. for pre-COVID sector size (6% of GDP, USD 1.4B receipts, 1.5M arrivals), employment (670,000 direct; 1.56M indirect), post-pandemic recovery trajectory (513,000 arrivals 2022), Uganda's competitive position (54% of world's mountain gorillas, most bird species in Africa), infrastructure gaps, 25 regulatory licences, World Bank recommendations, and investment opportunities in accommodation, concessions, and product diversification. Source: WB Uganda Economic Update June 2023. Read for tourism business plans, lodge/hospitality investment proposals, or tour operator market analysis.
• Advanced market sizing methodology (Umbrex, 2025): See references/market-sizing-methodology.md for the complete Umbrex Market Sizing Playbook TAM/SAM/SOM definitions and funnel logic; 8 market boundary principles; 12 failure modes with mitigations; top-down step-by-step build; bottom-up penetration modelling; supply-side/value-chain sizing; Three-Lens Triangulation Framework (top-down + bottom-up + expert); order-of-magnitude sanity checks with universal constants; driver trees and Monte Carlo sensitivity stress-testing; adoption S-curve and Rogers diffusion model; communicating market sizing to investors (Pyramid Principle, three investor questions); and a Uganda/East Africa application section with reference numbers, common sizing approaches by market type, and a TAM/SAM/SOM template in UGX. Read when building or stress-testing any TAM/SAM/SOM model, preparing for investor scrutiny, or working with limited data in East African markets.
• Industry analysis methods Nine Forces, Driving Forces, and Country Risk: See ../06-competitive-analysis/references/competitive-analysis-methods-fleisher.md for the Nine Forces industry analysis model (extends Porter's Five Forces with government, social, technology, and international forces), Driving Forces Analysis (identifying macro tailwinds and headwinds over a 35 year plan horizon), Country Risk Analysis (six-dimension framework for export/regional expansion), Technology Forecasting (eight methods including Delphi and S-curves), and Statistical Interpretation guidelines Source: Fleisher & Bensoussan (FT Press, 2007). Read when conducting industry attractiveness assessment, identifying macro driving forces, or assessing country-level risk for regional market expansion.
• Statistical rigour for market analysis: Use meta-statistics skill when computing or presenting any market sizing figures, growth rates, survey results, or comparative statistics. Key rules: use geometric mean (not arithmetic) for CAGR; use confidence intervals on all primary survey claims; use coefficient of variation to compare volatility across segments; follow Section 2.5 data visualisation standards (no 3D charts; axis from zero; label units). See meta-statistics/references/statistics-for-business-plans.md Market Sizing for TAM/SAM/SOM statistical methodology and citation templates.
• Data analytics for market evidence: See ../../book-extractions/data-analytics-business-planning-extraction.md when the market section uses dashboards, survey datasets, forecasts, AI analytics, customer segmentation, or large secondary datasets. Classify each claim as descriptive, diagnostic, predictive, or prescriptive so the evidence does not overclaim.
• Strategic analysis toolkit (PESTLE, Porter's Five Forces, SWOT, MOST, CSFs/KPIs): See ../meta-market-validation/references/business-analysis-techniques-cadle.md for the full descriptions of all 12 strategy tools (Tools 112), their correct use in external environment and internal capability analysis, and Uganda/EA adaptation notes for low-data markets Source: Cadle, Paul & Turner (BCS, 2010). Read when building or reviewing the industry overview, external environment scan, or internal capability sections of market analysis.

July 2026 Portable Contract

Required Inputs

Outputs

Evidence Produced

Capability and Permission Boundaries

For 04 market analysis, the controlling focus is market boundary, source quality, bottom-up and top-down sizing, structure, trends, entry timing, and uncertainty. This skill may search and analyse market evidence in read-only mode; it may not invent a TAM, extrapolate beyond a source population, or present an undated estimate as current. Its normal mode is read-only analysis and drafting. Any mutation, external communication, spending, certification, or professional conclusion outside that boundary requires explicit authority and must remain traceable to the approving role.

Degraded Mode

For 04 market analysis, loss of evidence about market boundary, source quality, bottom-up and top-down sizing, structure, trends, entry timing, and uncertainty activates degraded mode. If the controlling 04 market analysis evidence is unavailable, the same boundary applies. When a load-bearing market source or denominator is unavailable, provide the bounded known market and label the unmeasured remainder. Return the verified subset, label the affected decision qualified or not assessed, explain the downstream consequence, and state the smallest evidence request or authorised action that permits recovery. Do not convert the missing check into a pass.

Decision Rules

Workflow

1. Define the exact 04 market analysis decision, intended reader, jurisdiction, business stage, and permission boundary.
2. Collect market definition, customer count or spend evidence, geography, time period, and source register and map each material conclusion to its source; stop the affected conclusion when an input could change it.
3. Apply the specialist methods and directly linked references already contained in this skill, retaining its domain thresholds, calculations, and Uganda or East Africa context where applicable.
4. Compare the credible alternatives, test the countercase and failure path, and apply the decision table rather than selecting a template default.
5. Produce market analysis with bounded size, structure, trend, and entry implications with the evidence, exception, and handoff records; reconcile every shared assumption with its owning section.
6. Run the section quality checks, applicable finance or professional review, and anti-slop gate. If a gate fails, correct the evidence or decision and return to the responsible step.

Quality Standards

• Market analysis with bounded size, structure, trend, and entry implications must answer a real decision for the named bank, investor, DFI, grant, board, or strategic-partner reader.
• Source-at-claim market model and assumption/countercase register must be source-linked, dated where facts can change, and sufficient for another reviewer to reproduce the conclusion.
• The section exposes its countercase, stop condition, recovery action, and effect on neighbouring sections.
• No unavailable source, calculation, tool, or professional review is reported as passed; finance and statutory judgements follow the governing doctrine.
• Language remains specific to 04 market analysis, uses British English naturally, and passes the repository anti-slop gate without promotional filler.

Anti-Patterns

• In 04 market analysis, treating an unavailable market definition, customer count or spend evidence, geography, time period, and source register as confirmed. Correction: qualify the affected conclusion and issue the named evidence request.
• Producing market analysis with bounded size, structure, trend, and entry implications that restates the brief but makes no choice. Correction: record the choice, rejected alternative, rationale, countercase, and implication.
• Ignoring a conflicting upstream assumption. Correction: return it to its owning section and resume only from a reconciled version.
• Reporting an unavailable check as passed. Correction: mark it not assessed and narrow the release state.
• Claiming compliance, assurance, bankability, or investor readiness from narrative quality. Correction: run the applicable gate and retain its evidence.
• Copying the worked example into a client plan. Correction: use the method only and replace every fact with verified engagement evidence.

Worked Example

A report covers all East African logistics while the venture serves Kampala cold-chain pharmacies. Reject regional revenue as SOM evidence and size the reachable segment from verified pharmacy counts.

References

• Use the verified project evidence register and the owning upstream pipeline section for 04 market analysis; no local deep-dive reference is declared.
• For 04 market analysis claims involving money, tax, grants, reserves, revenue, cost, valuation, or financial statements, apply the Chwezi finance doctrine and record the required professional-review state; illustrative figures never become client facts.