Market attractiveness is a measure of the profit potential inbuilt in the structure of a market or industry. There are a large number of factors contributing to (and which may be utilized to measure) market attractiveness. The main factors and few illustrations from each of the categories are given in the following:
(1) Market size, market factors-market growth rate, and life cycle stage;
(2) economic and technological factors-investment intensity, barriers to entry or barriers to exit, industry capacity, and right to use to raw materials;
(3) Competitive forces-Kinds of direct rivals, substitution threats and structure of competition, bargaining power of buyers and suppliers; and
(4) Environmental factors- degree of social acceptance, regulatory climate and human factors.