Market Development

Your market

There are two sides to every market, Supply (how many people are providing products in the market) and Demand (how many people are there in the market who need those products). You will need to consider both of these factors when developing your product and deciding on your customers.

The social care market is constantly changing with new ideas about how to support people being introduced and new Government and local policies. You will need to ensure that you have a good understanding of the social acre market and then keep abreast of any changes. To do this you may wish to use some of the research links that can be found on this site or keep up with the latest news by using the news links on this site.

Market strategy

As well as considering supply and demand in the market you may also wish to think about the market, not necessarily the whole social care market but the market segments (reablement, day services and others for example) within it, in order to develop a market strategy.

All markets (and their products and services) can go through a growth pattern called a 'life cycle':

life cycle

The launch of the market is when new products / services / ways of working and thinking are being developed and explored (for example Personalisation), however as they are new the growth in the market is slow - mainly consisting of the entrepreneurs and pioneers.

The growth is when the market gains acceptance and starts attracting customers and suppliers in ever increasing numbers. Competition will also be quite considerable at this stage.

Maturity in the market is when there is still growth in the market but the rate of growth slows. This is when organisations and practices become established and there is little change.

When there are new markets starting to develop new products that are alternatives or substitutes to this market, then it is likely that this market will go into decline. The rate of decline will depend on how quick other markets develop, how expensive it is to leave the market and the levels of demand

Understanding where the market is in it's life cycle may help you think about the strategy you wish to use. A model that can help you consider the options is The Ansoff Matrix.

ansoff matrix

If you are providing products in an existing growing or mature market (bottom left) then your strategy may well be linked to increasing market share (market penetration strategy) in order to increase your customer base or to maintain or improve surpluses or cash flows.

As your products become established in your own market you may wish to start to introduce them into new markets (top left) in order to maximise revenue from them or extend their life (market development strategy). This may be a strategy you may wish to consider when the new markets are in their launch or growth phases. If you miss these phases and the market is already maturing, the risk may be that the new market may not want your product as other products are already established.

Trying to enter an existing market with a new product (bottom right) may be risky, however you may be able to adapt or improve existing services (product development strategy ) to add life to a mature market or to maintain market share in a mature market.

A strategy to enter a new market with a new product (top right) is perhaps the riskiest, but potentially could have the greatest returns and in the longer term actually reduce business risk as your products are spread over a number of markets, thereby giving you a little protection if a market fails (a diversification strategy). There are other reasons your current market may be declining forcing you into new markets or you may have a product that can be easily transported into different markets.



The level of supply of a product in a market generally may well be dependent upon the level of profitability or surplus generation there is in that market. Although in social care there are other factors that may influence whether there is supply in a market, a product provider will always need to ensure that there is sufficient 'profitability' in the market to allow them to cover their costs and make modest surpluses and be sustainable.

A model to help you consider whether a market may be 'attractive' to enter, whether for profit or to cover costs is to consider the competition in the market. A tool for doing this is Porters 5 forces model.

porters five forces

The bargaining power of suppliers in a market will impact on the price you pay for your supplies. In social care one of the biggest suppliers is likely to be staff and the level of wages they demand may impact on the attractiveness of the market.

The bargaining power of buyers is about demand in the market. The fewer buyers the more pressure they can put on prices. In Social Care Local Authorities with block contracts may have considerable power to influence your prices.

The threat of new entrants is largely determined by the 'barriers to entry' to the market (for example in day care it may be having to find a building which can be expensive, for residential it may be the regulation). An influx of new entrants can impact directly on your market share and sales and therefore your sustainability.

The threat of substitutes looks at are there any alternatives or substitutes to your product. If these are better, more attractive or cheaper than your own product then this again could lead to loss of market share and sales.

The middle box, intensity of rivalry, looks at market competition and how easy it is for existing providers in the market to reduce your market share by becoming more competitive and adding greater rivalry.

Considering all five forces may help you decide whether you wish to start supplying your product in a market.

Types of providers (supply)

With personalisation clients may choose to have their support services delivered from a wide range of organisations. In addition to 'traditional' providers (public sector (Local Authorities), private sector (companies run for a profit) and third sector (charitable and non-profit organisations)), there are a number of other competitors you may need to consider.

These include:

  • Mainstream recreation and leisure providers, for example sports centres, offering an increasing range of services to frail and disabled people

  • Health organisations or health professionals, for example Doctors, physiotherapists, chiropodists

  • User and Peer Led organisations, for example Centres for Independent Living, delivering products developed through their own knowledge and experience of the market

  • New community services based on a social enterprise model. This is where organisations can have charitable status but generally tend to be more business focussed, re-investing any surpluses back into their community.

  • Micro services, very small scale organisations, often only one or a few people, providing very personalised services in their communities.

  • Personal Assistants who could include family members, other carers, other disabled people or other individuals and agencies



As well as wanting to know how many other providers there are in the market and the level of competition in the market (Supply) you will also need to know how many people there are in your potential market and how many people may need to use health and social care services (demand).

You will need to look at population and social care statistics generally first, to get an idea about the market place, before 'drilling down' (doing further research) into the demographics of the your actual market area (for example this could be at a Borough Council level).

It is essential that you are clear about the current demand as well as future demand. This will always be unknown and nobody can predict it exactly, however you should ensure that you use all available information to make the best informed estimate.

linksLINKS to find data on demographics and health and social care demand at a national, Hampshire and local council level


Market risk analysis

Supply and demand in your market will be constantly changing and you will need to ensure that you keep up to date about the changes in your own market.

As well as ensuring you remain well informed you should also develop some market risk analysis. This is basically where you try to ensure there are 'no surprises' and ensure that if (and when) the market does change that you are as well prepared as possible.

A market risk analysis is no different from any other risk analysis you complete and indeed there are a lot of models that are used in different sectors that can be used for a business market analysis.

A risk is something that may happen (cause), which may lead to something else happening (the effect) where the impact would be something adverse.

There are four basic steps to risk analysis (record / write down all your risk analysis):

1) Identify the risks / threats

Consider the risks to your business, for example a new business entering your market

2) Assess and evaluate the threats

Consider the likelihood and Impact of each threat. Is the likelihood rare, unlikely, possible, likely or almost certain? Is the impact negligible, minor, moderate, major or catastrophic? An almost certain likelihood and catastrophic impact will require your immediate attention, whereas you may take no action for a threat that has a rare likelihood and negligible impact

3) Address the threat

There are basically 4 things you can do depending on the likelihood / impact score:

  • Treat or reduce - develop contingency plans to minimise the impact when it happens

  • Tolerate or accept - decide to bear any adverse impact

  • Transfer - use insurances to mitigate the impact

  • Terminate - stop your activity or find another way to do it

4) Review your threats

Ensure that on a regular basis you review your risk analysis.

linksLINKS to further information and methods for risk analysis


Hampshire County Council is not responsible for the content of external sites or documents.