The capacity of the market is the most important indicator for the formation of the enterprise strategy

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market capacity is
Market capacity is the likely volumeprovision of services (sales of goods) for a fixed period of time at a steady price level. Or effective demand for them. As a rule, a measure of time in the calculations is one calendar year. The main indicator of this aspect is expressed in monetary equivalent (dollars, euros, rubles, yuan and so on). In other cases, market capacity can be expressed directly in commodity terms. But when calculating strategies and prospects or analyzing the current situation, financial structures are not interested in how many units of products can be sold to the consumer, and what the sales revenue will be.

Calculation of market capacity is based on the followingformula: Е = К * Ц, where Е - directly sought capacity, К - the number of units (or mass) of the goods, Ц - cost. Market capacity is a factor that is formed due to real demand and predictable, elasticity of its volumes, the availability of price level, the ability to productively promote the product, the well-being of the population, business activity and the general conjuncture. This is a fairly general situation. Each separate market has its own version of capacity calculation. But there are general provisions, such as seasonal price fluctuations.

determination of market capacity

Market capacity is a necessary indicator in thatIf the company intends to increase its presence in the industry or to develop new sales areas for goods. This factor has two levels: real and potentially predictable. The alleged is a reflection of the wishes of buyers of a certain type of product to receive a new product or to have a new service. The existing market capacity is by no means always identical with the potential one. Calculations also take into account the region and geographical areas. To do this, an analysis of secondary indicators for the sales market (reviews, statistical data, analytical reviews in the press). The calculation includes the parameters of costs and behavior of consumers of specific products (volumes of disposable purchases, financial costs for goods, definitions in the choice of product categories, motivation and much more).

The capacity of the market is the multiplication of the consumption rateone buyer for the total number of residents in a particular region. Or adjustment of the known indicator in one region with the help of price coefficient, average wage level, population and other data. It is obvious that at certain time intervals the market capacity may increase, in others it may decrease.

calculation of market capacity
Therefore, special divisions of companiesconstantly monitor the existing dynamics, analyze the causes and create on the basis of the identified data certain schemes that help enterprises to sustainably balance.

Market research, its modeling is the most importantdirection in the strategy of existence and development of each enterprise. The more accurate the data, the more stable the company can operate in the industry. Determining market capacity, current information and existing trends are extremely important for making correct management decisions.

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