J. Service Science & Management, 2009, 2: 276-281
doi:10.4236/jssm.2009.24033 Published Online December 2009 (www.SciRP.org/journal/jssm)
Copyright © 2009 SciRes JSSM
The Research on the Appraisal of Market
Opportunity Based on AHP
Donghong YANG1, Yujie TAN1, Yanbin SUN1
1School of Economics and Management, Daqing Petroleum Institute, Daqing, China.
Email: dqyangdonghong@126.com
Received April 21, 2009; revised June 25, 2009; accepted August 2, 2009.
ABSTRACT
In this article, through analyzing the inner and external environments of the manufacture enterprise, the hierarchy
model of the market opportunity has been constructed. Based on the AHP, the mathematics evaluation model of the
market opportunity has been established. Take a simulative enterprise as example, according to the hierarchy model
and the mathematics evaluation model of the market opportunity, the judgment matrixes of every hierarchy have been
established and the weigh t of each market opportunity opposite to the ta rget hierarchy is obtained. The reasonab le de-
cision-making method has been provided to choose the market opportunity for the manufacture enterprise.
Keywords: Analysis Hierarchy Process, Market Opportunity, Environment Analysis
1. Introduction
With the change and development of the market demand
and the intense competition environment in the market,
any manufacture enterprise can not always rely on the
existing products and services. If the manufacture enter-
prise wants to survive and develop for a long time, it
must look for new market opportunities.
In the internal and external enterprise environment,
market opportunities are situation and opportunities whi-
ch can make the manufacture enterprise get tremendous
benefit and develop rapid ly. Market o ppor tun ities exist ing
in the internal and external environment are the customer
demand which have n ot y e t been met or fully m e t [1] .
Market opportunities generally exist in two situations.
First, to find the new or potential customers for the ex-
isting products and services and to start and develop a
new market, or to find the new features and new uses of
existing products and guide people to use them. Second,
to create, develop, design and produce new products or
new services which have new features to meet the
changing needs of peopl e.
Along with the changes of market environment, de-
mand also will be changed. Therefore, market oppo rtuni-
ties will emerge or disappear. Any market opportunity
objectively exists and any enterprise can find and take
advantage of the market opportunities. There are no ex-
clusive rights [2].
However, just in the specific conditions one market
opportunity can success. Because of the different condi-
tions of the manufacture enterprises, in the use of a mar-
ket opportunity, the different manufacture enterprises
will gain different interests and competitive advantages.
Therefore, manufacture enterprises must accurately ana-
lyze and evaluate the market opportunities to find one
that is suitable for the manufacture enterprise’s develop-
ment.
2. The Appraisal of Market Opportunity
2.1 The Appraisal Process of Market
Opportunity
Market opportunities come from customer demand, and
customer demand changes with the internal and external
environment of the manufacture enterprise. When look-
ing for market opportunities, the manufacture enterprises
analyze the enterprise’s suppliers, customers and com-
petitors, as well as the internal organizational structure,
financial status, professional skills, human resources and
network conditions [3]. The optimal market opportunity
can be identified after analysis and evaluation. (See Fig-
ure 1)
2.2 The Hierarchy Model of Market Opportunity
The market gravitation, the enterprise resource, the
competitors and the customers are considered to analyze
and evaluate a particular market opportunity or some
market opportunities which is whether confor m to manu-
facture enterprise development needs or not.
The Research on the Appraisal of Market Opportunity Based on AHP277
Analysis
Appraisal
External environment
Internal environment
The enterprise Market opportunities
The optimal market opp ortunit y
Figure 1. The appraisal process of market opportunity
Market Opportunity
M ar ket Gr avitation Competitors Customers Enterprise Resource
The Motivation
The Ca
p
abilit
y
Com
p
etitor Level
Subsection Market
The T echnology
The Capital
The Network
The Manpo w e r
The Or
g
anization
Market Demand
Market Pullulating
Potential Profit
Market Opportunity 1 M ar ket Opport uni ty 2 M ar ket Opport uni ty N
Figure 2. The hierarchy model of the market opportunity
The market gravitation refers to market attract ability
to specific products which are produced by the enterprise.
The market gravitation includes market demand, market
pullulatin and potential profit. The more the market de-
mand of products and services, the market more attract
the products and services of enterprise. The market prof-
itability of produc ts and services is high, the capital prof-
itability is high, which attracts enterprises to product the
products and services.
The enterprise resource is the useful thing which is
worth for the survival and development of enterprise.
The enterprise resource is an important foundation con-
ditions for production and operation of enterprise. The
enterprise resources include the technology, the capital,
the network, the manpower and the organization. When
the market can effectively and rationally use resources of
enterprise, in accordance with the advantages of enter-
prise resources into products and management, and get
benefit through sale, the market opportunity is fit for the
survival and development of enterprise.
In a certain degree of market competition environment,
when the enterprises analyze and evaluate the market
opportunities, the competito r level and subsection market
should be consi dered.
The products and services will be sold to the custom-
ers. So when the enterprises analyze and evaluate the
market opportunities, the consumption motivation and
the consumption capability should be considered.
The hierarchy model of the market opportunity is es-
tablished as follow. (See Figure 2)
2.3 The Mathematics Evaluation Model of
Market Opportunity
2.3.1 Constr u c ting Judgment Matrixes
Through paired comparing the factors, the judgment ma-
trix ()
ijn n
Aa
is constructed. In determining the value
of , the 1-9 and their reciprocals are quoted [4].
ij
a
2.3.2 Single-Level Ranking and Consistency Test
1) Single-level ranking
The eigenvector Wnormalized corresponding to the
judgment matrix is the Sort weights of the factors corre-
sponding to the factor on the above hierarchy. When
Copyright © 2009 SciRes JSSM
The Research on the Appraisal of Market Opportunity Based on AHP
278
calculating the maximum eigenvalue max
and W, the
method is as follows [5].
(a) Each list of matrix elements is standardized. The
general element is
1
ij
ij n
kj
k
a
a
a
(, 1,2,ij , )n
(1)
(b) The summation of elements in each row he
ju
of t
dgment matrix standardized is gained.
1
n
iij
j
Wa
(1,2,,)in
(2)
(c) The vector
12
(, ,, )
T
n
WWW Wis standardized.
1
(1,2,,)
n
)
T
n
W
m eig
i
in
i
i
W
Wi
W

(3)
The vector n-
gl hts, and the maximu
is the Si
123
(,, ,,WWWW
e-level sort weigenvalue is
max 1
()
ni
ii
A
W
nW
4
2) Consistency test target is
(a) The consistency
max 1
n
CI n
(5)
(b) Find the corresponding averagendom
te ns
ra
consis-
ncy targetRI which is shown in Table 1.
(c) The coistency proportion is
CI
CR RI
(6)
When 0.10CR
, the consistency of judgment matrix
is acceptable, otherwise, the judgment matrix is modified,
and then its consistency is tested.
2.3.3 Sort of Level Ranking and Consistency Test
1) Sort of level ranking
The hierarchical model includes target layer
A
, guide-
line and project C. The relative weights of target
layer
B
A
corresponding to guidelines is=
B(1)
W
(1 (1)
3
,, )
T
W
)
12
(,WW
(1) (1)
,
k
W
The relative weights of the various criteria of guideline
corresponding to projectis
BC (2) (2)
1
(,
jj
WW(2)
2,
j
W
(2
3) (2)
,, )
T
jnj
WW(1,2,,jk)
.
The relative weights of projects corresponding to tar-
get layer
A
is calculated in the Table 2.
2) Consistency test
1
1
m
j
j
m
j
j
CI a
CR
RI a
7
When 0.10CR
, the consistency of judgment matrix
is acceptable, otherwise, the judgment matrix is modified,
and then its consistency is tested.
The vector is the relative
weights of the projects. The policy-makers choose the
project whose weight is the greatest as the optimal project.
123
(,, ,,)
T
n
WWWW W
3. Empirical Analysis
The market opportunities are identified by application of
the model. The simulative manufacture enterprise is now
facing three chances to choose, to be known as A, B and
Table 1. Th ranm consistency target of judgment matrix [6]
2. Sort of level ranking
B1Bk
e average
do
Table
B2 …
H. B
H.C W2 k
Sort of level Ranking
W1… WW
W11 W12…W1k
WW… W
21 22 2k
C1
C2
Cn WW
ij
n1 W
n2nk
(1) (2)
k
ij
j
WWW

(1,2, )in
Rank 1 4 5 6 7 8 9 2 3
RI 0.00 0.90 1.12 1.24 1.32 1.41 1.45 0.00 0.58
Copyright © 2009 SciRes JSSM
The Research on the Appraisal of Market Opportunity Based on AHP 279
C. The basic steps of identifying aaluating thar-
dgment matrix of A-B
A W
nd eve m
ket opportunities are as follows.
First, the hierarchy model of the market opportunity is
drawn. (See Figure 2)
Then, the judgment matrixes are constructed. (See Ta-
ble 3 to Table 19)
Table 3. The ju
B1 B
2 B
3 B
4
B1 1 1/3 3 2 0.246
B2 3
B
1
1/4
4
1
3
2
0.497
0.142
31/3
B4 1/2 1/3 1/2 1 0.115
max 1
()
n
i
A
Wi
nWi
=4.215, max 1
n
CI n
=0.072, CI
CR
R
I
<
0.1,the consistency is satisfactory.
of B1-C
B1 W
=0.080
Table 4. The judgment matrix
C
11 C
12 C
13
C11 1 1/3 1/4 0.120
C
12
C
3 1 1/3 0.
0.608
272
13 4 3 1
max
3.074, 0.037,0.064<0.1,e consistesat-
isfactory.
Table 5. The judgment matrix of B2-C
B2 W
CI CR thncy is
C
21 C
22 C
23 C
24 C
25
C21 1 1/2 3 4 5 0.301
C
22
C
2 1 3 4 5 0.397
0.146
23 1/3 1/3 1 3 2
C24
1/4 1/4 1/3
1/3
1 3 0.097
C25 1/5 1/5 1/2 1 0.059
ma
isfactory.
x5.280, 0.07 <0e cistent-
Table 6. The judgment matrix of B3-C
B3
CI 0, CR 0.062.1, thonscy is sa
C
31 C
32 W
C0.333
31 1 1/2
C32 2 1 0.667
max
2, CI 0, 0<0.1,the consistency is satisfactory .
Table 7. The judgment matrix of B4-C
B4
CR
C
41 C
42 W
C41
C42
1 1/3
3
0.250
0.750 1
max
2, 0,0<0.1, the consistency is satisfactory.
Table 8. The judgment matrix of C11-D
C11 DDD
3 W
CI CR
1 2
D1 12 3 0.539
D2
D3 164
297 1/2 1 2 0.
1/3 1/2 1 0.
max
3.009, CI
0.005, CR
0.008<0.1, consistency
isfacto
Table 9. The judnt matr12-D
D
1 23
the is sat-
ry.
gmeix of C
C12 D D W
D
11 1/3 1/4 0.123
D2 320
D3 557
3 1 1/2 0.
4 2 1 0.
max
3.018, CI
0.009, CR
0.016<0.1,
isfacto
TableThe judgment matr13-D
D
1 23
the consistency is sat-
ry.
10.ix of C
C13 D D W
D1 1 1/3 1/3 0.141
D2 .525
D3 .334
3 1 2 0
3 1/2 1 0
max
3.054, CI
0.027, CR
0.046<0.1, consistency
isfacto
Table 11.The judgment matrof C21-D
D
1 D
2 D
3 W
the is sat-
ry.
ix
C21
D1 1 1/3 1/2 0.164
D2 .539
D3 .297
3 1 2 0
2 1/2 1 0
max
3.009, CI
0.005, CR
0.008<0.1, consistenc
isfact
Table 12. The judgment matr-D
D
1 D
2 D
3 W
the y is sat-
ory.
ix of C22
C22
D1 1 1/4 1/3 0.120
D2
D3
4 1 3. 0.608
3 1/3 1 0.272
max
3.074, CI
0.037, CR
0.064<0. consistenc sat-
isfactory.
Table judgment matr-D
D
1 23
1, they is
13. Theix of C23
C23 D D W
D
11 1/3 2 0.252
D2 3 1 3 589
D3 159
0.
1/2 1/3 1 0.
max
3.054, CI
0.027, CR
0.046<0.1,consistency the is sat-
isfactory.
Copyright © 2009 SciRes JSSM
The Research on the Appraisal of Market Opportunity Based on AHP
Copyright © 2009 SciRes JSSM
280
Table. The judgment matr of C24-D
C
14ix
24 D
1 D
2 D
3 W
D1 2 0.525 1 3
D2 1/3 1 1/3 0.
1/2 3 1 0.
142
D3 334
max
3.054, 027, 046<0.1, consistency
isfact
Table The judgment matr of C-D
D
1 D
2 D
3 W
CI 0. CR 0. the is sat-
ory.
15.ix25
C25
D1 1 1/3 1/2 0.159
D2 589
D3 252
3 1 3 0.
2 1/3 1 0.
max
3.054, 027, 046<0.1, consistency
isfact
Table. The judgment matr of C-D
D
1 D
2 D
3 W
CI 0. CR 0. the is sat-
ory.
16ix31
C31
D1 1 1/5 1/3 0.106
D2 633
D3 261
5 1 3 0.
3 1/3 1 0.
max
3.039, 019, .033<0.1, consistenc
isfact
le 17
32 W
Tab. The judgment matrix of C32-D
C D
1 D
2 D
3
D 1 4 3 0.620
1
D2 1/4 1 0.224 2
D3 1/3 1/2 1 0.156
max
CI 0. CR 0 the y is sat-
ory.
3.109, CI
0.055, CR
0.094<0.1,e consist
isfact
18. The judgment matrix of C41-D
C41 W
thency is sat-
ory.
Table
D
1 D
2 D
3
D 1 4 5 0.665
1
D2 1/4 1 0.231 3
D3 1/5 1/3 1 0.104
max
3.087, CI
0.043, CR
0.075<0.1,e consist
isfact
19. The judgment matrix of C42-D
C42
W
thency is sat-
ory.
Table
D1
D2
D3
D1
1 4 3 0.620
D2
10.2
1/3 1/2
/4 1 2 24
D3
1 0.156
max
3.109, CI
0.055, CR
0.094<0.1, consistat-
isfact
Tablet of leg
B1 B2 B3 B4
theency is s
ory.
20. Sorvel rankin
0 0 0 0
W
.246.497.142 .115
H. B
C11
0.120 C13
0.608 C21
0.301 C22
0.397 C24
0.097 C25
0.059 C31
0.333 32
667 C41
0.250 42
750
H. D C12
0.272 C23
0.146 C
0. C
0.
D1 0.0.539 0.123 0.141 0.164 0.120 0.252 0.5250.1590.1060.620 0.665 0.620 278
D2 0.297 0.320 0.525 0.539 0.608 0.589 0.1420.5890.6330.224 0.231 0.224 0.453
D3 0.164 0.557 0.334 0.297 0.272 0.159 0.3340.2520.2610.156 0.104 0.156 0.269
The single-level ranking is done. The consistency of
ll the judgment matrixes is satisfactory. (See Table 20) aThe relative weights of projects corresponding to tar-
get layer
A
is calculated in the Table 6. The correspond-
in
rtuni-
tie
4. The Significance of Market Opportunity
Evaluation
and evaluating market opportunities,
o
-
ture enterprise can maintain the normal production and
g average random consistency proportion of hierarchy
B isCR =063<0.10, the consistency is satisfactory.
According to the comprehensive analysis of market
opponities, the ranking of the three market opportu
0.
s is Market Opportunity2, Market Opportunity1, Mar-
ket Opportunity3.
Through analyzing
the manufacture enterprise can expand reproduction t
promote the enterprise to a higher stage. The manufac
operation, but also can seeks to growth and progress.
The survival and development of manufacture enter-
prises can not be separated from environment. From the
macro-environment, the survival and development of
The Research on the Appraisal of Market Opportunity Based on AHP281
and
le
demand the products which can fully meet needs
an
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manufacture enterprises is restricted mainly by the
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the most basic issues of manufacture enterprises survival.
Only concerning any change from the environment at
any time, finding out the problems timely, evaluating the
favorable market opportunities timely and avoiding the
risk, the manufacture enterprise can get better living
space to enhance the capacity of adapt to the environ-
ment.
The development assurances can not be separable from
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tinuously analyzing and evaluating market opportunities,
the manufacture enterprise can excavate new growth
point to
d desires for market. Co mbined with reasonable prices,
convenient place and appropriate promotion, the manu-
facture enterprise will be able to expand revenues, en-
hance its effectiveness, so as to stabilize the profitability
of manufacture enterprises.
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Copyright © 2009 SciRes JSSM