Procurement Glossary
Market analysis: Systematic evaluation of procurement markets
November 19, 2025
Market analysis forms the foundation of strategic procurement decisions and enables buyers to make a well-founded assessment of supplier markets. It provides crucial insights into market structures, price dynamics and supply risks. Find out below what market analysis involves, what methods are available and how you can use them successfully in procurement.
Key Facts
- Systematic analysis of procurement markets to identify opportunities and risks
- Basis for strategic supplier selection and negotiation strategies
- Includes market structure, competitive intensity, price development and innovation trends
- Reduces procurement risks and optimizes total cost of ownership
- Enables proactive adaptation of the procurement strategy to market changes
Contents
Definition: Market analysis
Market analysis in Procurement refers to the systematic investigation and evaluation of procurement markets in order to gain strategic insights for purchasing decisions.
Core elements of the market analysis
A comprehensive market analysis comprises several key components:
- Market structure and intensity of competition
- Supplier landscape and market concentration
- Price trends and cost drivers
- Technological trends and innovations
- Regulatory framework
Market analysis vs. supplier evaluation
While the requirements analysis defines internal requirements, the market analysis focuses on external market conditions. It differs from supplier evaluation in that it focuses more broadly on the entire market environment rather than individual suppliers.
Importance of market analysis in Procurement
Market analysis enables buyers to make informed decisions and minimize procurement risks. It forms the basis for successful procurement strategies and optimizes supplier selection.
Methods and procedures
Various analytical approaches enable a structured market evaluation and provide usable insights for strategic procurement decisions.
Porter's Five Forces Analysis
This proven method analyzes the intensity of competition through five forces: supplier power, customer power, threat from substitutes, barriers to market entry and rivalry among existing competitors. It helps to assess the negotiating position and market attractiveness.
SWOT analysis of the procurement market
The systematic evaluation of strengths, weaknesses, opportunities and threats in the market enables a holistic assessment. Internal factors such as supplier capacities and external influences such as regulatory changes are taken into account.
Spend analysis and market volume
Analyzing your own purchasing volume in relation to the overall market reveals your negotiating power. Benchmarking approaches enable comparison with market prices and best practices of other companies.
Tacto Intelligence
Combines deep procurement knowledge with the most powerful AI agents for strong Procurement.
Key figures for controlling the market analysis
Measurable indicators make it possible to evaluate the quality of the analysis and the success of market-based procurement decisions.
Market coverage and data quality
The share of the analyzed market volume in the total market shows the completeness of the study. The timeliness of the data used is measured by the average age of the information. In addition, the number of validated data sources per market segment assesses the reliability of the analysis.
Forecast quality and hit rate
The deviation between forecast and actual market developments measures the quality of the forecasting models. A high hit rate for price forecasts and supplier risks confirms the effectiveness of the analysis methods used.
Procurement performance indicators
Cost savings through market-based negotiations and the reduction of procurement risks show the direct benefits of market analysis. The capital commitment period and supplier diversification measure the strategic optimization of procurement.
Risks, dependencies and countermeasures
Incomplete or incorrect market analyses can lead to suboptimal procurement decisions and considerable financial losses.
Data quality and timeliness
Outdated or incomplete market data leads to incorrect conclusions. Conditions can change quickly, especially in volatile markets. Regular updating of data sources and validation through multiple information channels are essential for reliable analyses.
Overdependence on historical data
Looking only at the past ignores disruptive changes and new market developments. Technology radars and trend analyses help to develop future-oriented perspectives and take innovation cycles into account.
Lack of market depth
Superficial analyses overlook important market dynamics and regional differences. Insufficient consideration of supply risks can lead to supply bottlenecks. Detailed segmentation and local market expertise are required.
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Practical example
An automotive supplier conducts a comprehensive market analysis for electronic components. The analysis reveals an oligopoly structure with three dominant suppliers controlling 80% of the market. At the same time, the team identifies emerging technologies from Asia that could enable cost reductions of 15% in the medium term.
- Diversification of the supplier base by qualifying new suppliers
- Development of a dual sourcing strategy to minimize risk
- Building strategic partnerships with technology leaders
Trends & developments around market analysis
Digital technologies and new analytical methods are revolutionizing the way companies examine and evaluate procurement markets.
AI-supported market analysis
Artificial intelligence enables the automated analysis of large volumes of data from various sources. Machine learning algorithms recognize patterns in price data, supplier behaviour and market trends that would be difficult to identify manually. AI applications significantly accelerate analysis processes.
Real-Time Market Intelligence
Modern platforms provide continuous market data instead of selective analyses. Real-time dashboards show price changes, supplier risks and market developments. This transparency enables proactive procurement decisions and quick reactions to market changes.
ESG integration in market valuations
Sustainability criteria are increasingly being integrated into market analyses. Environmental, social and governance factors influence supplier selection and risk assessment. The Supply Chain Act further reinforces this development.
Conclusion
Market analysis is an indispensable tool for strategic procurement decisions and enables buyers to identify market opportunities and minimize risks. By using modern analysis methods and digital tools, companies can strengthen their negotiating position and achieve sustainable competitive advantages. The continuous development of analytical skills is becoming a decisive success factor in increasingly complex procurement markets.
FAQ
What is the difference between market analysis and market research?
Market analysis in Procurement focuses on existing procurement markets and their evaluation for specific purchasing decisions. Market research, on the other hand, often examines new markets or customer needs for product development and marketing. Market analysis focuses more specifically on suppliers, prices and procurement risks.
How often should a market analysis be updated?
The update frequency depends on the market volatility. In stable markets, an annual review is sufficient, while volatile commodity markets require quarterly or even monthly updates. Critical materials and strategic categories should be monitored continuously in order to be able to react quickly to changes.
Which data sources are most valuable for market analysis?
Primary data from suppliers and our own purchasing data form the basis. In addition, industry associations, market research institutes and specialist publications provide valuable insights. Online platforms and databases provide access to current market prices and trends. The combination of different sources increases the reliability of the analysis.
How can market analysis be used in negotiations?
Sound market data significantly strengthens the negotiating position. Knowledge of market prices, supplier capacities and the competitive situation enables fact-based argumentation. The analysis also reveals alternative procurement sources, which reduces dependence on individual suppliers and increases the scope for negotiation.
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