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Demand Conditions in Understanding the Industry

Demand Conditions

As we explore terms of demand within industries we'll take a look at what they mean in the context of industry terms and we'll examine the impact of demand terms on your success as an entrepreneur.

Specifically, when we explore the terms of an industry the first element we have discussed is "knowledge conditions in understanding the industry", and the second is "demand Conditions in Understanding the industry".

Within that, by understanding these two conditions you can improve your success in the industries you enter in demand terms will complement our discussion of the Opportunity Analysis panel for the State of the Industry component.

How to determine the terms of demand “volume, growth rate and breadth of the market”

So when we talk about demand terms, we are talking about a few different elements to consider in the markets, we are talking about the size of the market, the growth rate of that market as well as the consistency of this market, we want to realize that to create a successful business, we need to better meet customer needs and we need to do so in a profitable way.

A well-publicized problem is a half-solved problem. And we want to know that the problem is well explained, and it's a half-solved problem.

Specifically, we want to look for ways to understand problems and solve those known problems.

Not only do we want to understand the current needs and wants of the market, but we also want to be able to predict and anticipate where the market is moving, and how we will be able to compete not only now.

But in retrospect, a large part of that is an element of customer discovery actually going out and talking to potential customers, so while we do that it will help as well as thinking ahead when it's time to start talking to potential clients:

  • What are the different slides?
  • What are the different sizes?
  • What audiences should we be sure to consider?

E-learning is a great example of thinking about demand conditions, and the various items that come into play:

Demand Conditions in Understanding the Industry

1. In the first item: It amounts to 4.4 trillion dollars there are 1.4 billion students and 62 million teachers a large number of parents influence buying decisions here as well.

2. In the second item: E-learning, as a subset of the education market is now also large at $91 billion, it also has a near-term growth rate of 23% per annum. So, the average growth rate during 2017 is 91 billion up 23% annually.

3. The third item: There are a number of other factors that play a role in market opportunities and demand conditions as well each element has three 700 million individuals basic reading and writing skills are lacking worldwide.

4. In the fourth item: the high cost of education 84% rise since 2000 Student loan debt rising 1 trillion dollars.

5. In the fifth item: Internet users if we want to look at e-learning we will look at the learning peaks in education and we will look at the electronic part of e-learning and on the Internet.

In the fifth item, we look at Internet users more than 2.4 billion users globally.

See: Risk Taking in Entrepreneurial Decision Making

6. In the sixth item: What is the population of the area? How many companies do I compete with? Well, if you are in Europe there are 3000 e-learning modules only in Europe.

7. In the seventh item: What about devices? What about the ease and availability of tablets? Well, here I see that American student tablet ownership has grown by more than 250% and it grows quickly after that too.

I also want to think I think about demand about expectations and about the industry.

8. On the eighth item: I see that there is a lot of noise, there are many expectations, there is probably a great belief that e-learning and online learning will be the panacea for all types of education it will solve all our problems and gaps and I want to be aware of that I want to be aware of what these tendencies desires and expectations whether they are reality.

9. In the ninth item: There is a new regulation emerging.

10. In item 10: There are a number of what are considered hot topics to learn about record stores open internet sites open education and free content.

So I see when I look at e-learning and think of the demand there is a variety of conditions to consider regarding, again:

  • The size of the market
  • Growth rate
  • Smoothing it

As well as other factors that affect demand in this case: 

  • The elements of affordability
  • Access to the web
  • Tablet ownership
  • Industry standards and expectations.

When I look at expenses this is an important element to consider as well I want to know what are the expenses incurred on education? And I see here, it's over 6 billion a year.

I see e-learning growing at a faster rate this is the 23% that we have indicated.

I want to know who is my client? Who buys these items? Well, there are four main factors which are analyzed here in the IBIS report. There is a market from K to 12 there is a post-secondary market and usually your college market.

There is corporate and government spending to train employees there are actually a variety of other factors as well But I can identify here via the pie chart that 50% of the spending is in the K to 12 market.

It is not surprising on the grounds that they make up the bulk of the population.

There are more schools and more students in kindergarten through 12th grade programs than there are in colleges that way I'm not necessarily surprised by this.

But I'm interested in knowing the stats and what expenses are being made even if I enter this market and compete in it.

See: What are the Entrepreneurial Motivations

What revenue can be captured? I also want to learn about how the industry is structured. and how it is divided.

▶ The first element from the left side: Content

Influencing factors are:

  • Regulatory/Curriculum
  • Corporate Requirement
  • Consumer Requirement

Business types are:

  • Publisher
  • Content
  • Open Source

▶ The second component: Management systems

Influencing factors are:

  • Scale
  • Complexity
  • Efficiency

Business types are:

  • Software Platform
  • Tools
  • Smart Technology

And learning management systems, analytics, etc., that are considered in e-learning.

▶ The third element, distribution, which is arguably the most popular in recent times:

Influencing factors are:

  • Online
  • Free/Paid
  • One-to-one/One-to-many

Business types are:

  • Immersive learning
  • MOOCs, an abbreviation for (massive open online course).
  • learning portal.

The three elements will come into play as we serve our customers we look at the cost of education level of qualification flexibility and customer experience.

The quality that is delivered across the intersection of these three areas of content management systems I am also interested in raising money specifically when I look at these many competitors in the market.

Do people raise money? Do people get financing from venture capitalists and other types of investors? I see here that they are. Although it is in a state of decline a bit.

We see it picked up at the end of 2010 but with the US economic slowdown and the global economic slowdown it's starting to ease a little bit.

Knowing that many K up to 12 and many college audiences. Officially 85% of the previous chart we saw for our clients funded by the public sector.

Meaning they depend on tax revenue meaning they depend on federal spending so if federal spending goes down or if tax revenue drops this will have an impact on related and related industries.

However, we can see that there is still significant funding in this area 864 million in 2012 alone is expected it was probably a little higher than that in the end too.

And when we look at the right side of trade volume we still see between 87 and 130 trades done each year.

SeeWhat is the Industry Lifecycle

This typically means approximately 100 companies have been funded through these means we'll also look at M&A activity M&A activity and what else was going on there.

We see a lot of mergers and acquisitions we can look here and see the value of the transaction approaching 10 billion.

We can also see that many of those deals in the education stage were actually e-learning companies so 75% of education companies that were incorporated or acquired were in an e-learning vacuum.

What else we can look at in the bottom image while we're doing this kind of research is who's raising the money? What is the target sector? What is the value of the deal? So these are the companies, fundraising, we can see the investors.

And we can see some of the notable investors here differing from some of the notable venture capitalists like Andreessen Horowitz, as well as some institutions like the Bill and Melinda Gates Foundations, that put money into this area.

We can see the target sectors to a large extent the distribution.

And we can see the values of the coefficients so a few million here. Ten or 15 million there we can also do this type of research in other areas all I saw is from the IBIS report.

This is one of the search databases that you can access as a University of Maryland student.

Search the terms of the order

There are others out there we'll take a look at those stats we will look at Eurostats if we are done with the European Union we will consider SBDC.

We'll look at the Census Bureau so when we look at the terms of the order there are a variety of databases that we can access some are free some are paid, so we are going to highlight some of these things online for you as well.

To take advantage of these demand conditions we want to focus on three aspects.

Again, volume is important, but when you're looking at an early stage industry when you're looking at something that's just beginning to climb the path to success volume may not necessarily be there and it may not be that high.

So we are also interested and perhaps more interested in the growth rate of this demand.

If it's a small market that's okay but if it's growing at 20, 30 or 40% a year we want to be on that curve as entrepreneurs.

We want to drive this growth the idea is that the rising tide will excite the many companies that are in this space.

We're also interested in consistency of demand across customer segments, so when I look at that demand and see that half of the market that is being spent is K to 12 and it's a fairly homogeneous market.

There is likely to be a similar set of needs and wants across this broad sector.

See: The Opportunity Canvas Analysis

Now that doesn't mean I necessarily want to try to build a product that serves everyone the needs of a kindergarten classroom and the needs of a high school classroom are completely different.

Student development varies greatly what a six-year-old and an 18-year-old can do or expect is completely different, so we don't have to say they're all the same, so one size fits all.

But it at least leads me to a common kind of what some needs and desires are it is possible that some type of grading system is used.

There will likely be some amount of assignments, homework, and outputs used. There is a kind of relationship between teacher and student there is some kind of parental or guardian relationship.

There are K-12 supervisors who will play a role and there may be various other regulations regarding student privacy.

Now there are a different set of factors and concerns if we look at corporate training or we're looking at employee training within the government by the government this is what we mean by consistency of demand.

When there is a large group of k to 12 a large group of post-secondary groups or a large group of companies and government where if we want to develop a solution we can address one of those large areas with our solution and not have to build a completely new solution if we want to compete in this field.

Now all this raises the question of once you get to know the industry and start analyzing the demand, what are you doing there? For me, I like to think, where is an unrealized opportunity? If everyone I see, especially those who raise venture capital.

A lot of investment capital is collected from good companies in the distribution column. I, as a startup, might not want to compete there.

I may not want to chase what others are chasing I might want to look for something different I may want to look at the management system side.

The rationale might be that when distributing there are a lot of players and a lot of funding is allocated to it.

Content-wise I might be the creator of the content but I would expect colleges and schools might already have the content.

Or they may have the expertise to develop this content or even the philosophical responsibility to develop their own.

So I may want to rest in the middle I might want to get comfortable with the startup and management systems and look at the tools that could be of value.

And maybe I just don't want to look at the tools in all the tools Maybe I want to look at mobile gadgets.

And I might not just want to look at mobile gadgets I may want to consider doing in-mobile analytics within management systems.

So this is the kind of research you can do to drive where you might want to compete and think where the opportunity is and where there is adequate volume and growth rate.

And homogeneity you can build a sustainable startup find a large and growing market with a similar set of needs and wants.

So I'm looking for large markets that are growing and have some similar needs and wants so that I can offer something of value and focus my resources and do it effectively.

And I could do that in an area where it might be an attractive niche for me.

If the opportunity to offer a million dollars or 5 million dollars was for me that would be very attractive for Microsoft and Google not to answer the phone for a million dollar opportunity.

Not having a meeting to discuss a million dollar opportunity Just a very small amount for companies of this size.

So you may find that there are opportunities to get involved and involved and market opportunities this may be too small for some of the big players to compete in but it might be worth it as a start.

Segmentation is an essential part that must also be considered when considering an order. With division, it's an opportunity to specialize building reputation and brand.

To do one thing well you can use that for new things later but it gives you discipline it lets you go in and think about how to fill a need.

In short, when we think about demand terms we want to realize that this is part of the industry we need to understand we want to learn about the element the effect that magnetism has growth rate and homogeneity as we look to bring new products to market.

See: Entrepreneur: Who is He, Works, Examples, Skills and Types

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