# Problem Statement & Market Analysis
## Purpose
Generate a comprehensive problem statement and market analysis that establishes the foundation for the entire PRD. This section must clearly articulate the problem being solved, validate market opportunity, and position the solution within the competitive landscape.
## Prerequisites
- Initial requirements gathering must be complete
- Business context and objectives must be documented
- Market research data must be available or assumptions clearly stated
## Section Structure & Requirements
### 1. Problem Definition
**Objective**: Clearly articulate the core problem being addressed
**Required Elements:**
- **Problem Statement**: One clear, concise sentence defining the core problem
- **Problem Context**: Background and circumstances that create this problem
- **Problem Scope**: Boundaries of what aspects of the problem will be addressed
- **Problem Impact**: Quantified impact on users, businesses, or market
- **Problem Validation**: Evidence that this problem exists and matters
**Quality Criteria:**
- Problem is specific and measurable
- Impact is quantified with credible data
- Scope is realistic and achievable
- Validation evidence is compelling
**Template:**
## Problem Statement
[One sentence problem definition]
### Problem Context
[Background and circumstances]
### Problem Scope
[What aspects will be addressed]
### Problem Impact
[Quantified impact with supporting data]
### Problem Validation
[Evidence and research supporting problem existence]
### 2. Market Analysis
**Objective**: Establish market context and opportunity
**Required Elements:**
- **Market Size**: TAM, SAM, and SOM with sources
- **Market Trends**: Key trends driving market evolution
- **Market Segments**: Relevant market segments and characteristics
- **Market Dynamics**: Growth drivers, barriers, and forces
- **Regulatory Environment**: Relevant regulations and compliance requirements
**Quality Criteria:**
- Market data from credible, recent sources
- Market size calculations are realistic and well-supported
- Trends are relevant to the proposed solution
- Regulatory requirements are accurately identified
**Template:**
## Market Analysis
### Market Size and Opportunity
- **Total Addressable Market (TAM)**: [Size and source]
- **Serviceable Addressable Market (SAM)**: [Size and source]
- **Serviceable Obtainable Market (SOM)**: [Size and source]
### Market Trends
[Key trends with supporting data]
### Market Segments
[Relevant segments and characteristics]
### Market Dynamics
[Growth drivers, barriers, competitive forces]
### Regulatory Environment
[Relevant regulations and compliance requirements]
### 3. Competitive Analysis
**Objective**: Map competitive landscape and identify differentiation opportunities
**Required Elements:**
- **Direct Competitors**: Companies solving the same problem
- **Indirect Competitors**: Alternative solutions users currently employ
- **Competitive Positioning**: How competitors position themselves
- **Competitive Strengths/Weaknesses**: Objective analysis of competitor capabilities
- **Market Gaps**: Unaddressed needs or underserved segments
- **Differentiation Opportunities**: How proposed solution can differentiate
**Quality Criteria:**
- Comprehensive coverage of competitive landscape
- Objective analysis without bias
- Current and accurate competitive information
- Clear identification of differentiation opportunities
**Template:**
## Competitive Analysis
### Direct Competitors
[Companies directly solving this problem]
### Indirect Competitors
[Alternative solutions and workarounds]
### Competitive Landscape Matrix
[Comparison of key competitors across relevant dimensions]
### Market Gaps and Opportunities
[Unaddressed needs and underserved segments]
### Differentiation Strategy
[How proposed solution will differentiate]
### 4. Current State Analysis
**Objective**: Document how the problem is currently being addressed
**Required Elements:**
- **Current Solutions**: How users currently solve this problem
- **Solution Limitations**: Gaps and pain points in current solutions
- **User Workarounds**: Manual processes or makeshift solutions
- **Cost of Current State**: Economic impact of current problem/solutions
- **Change Drivers**: What's driving the need for a new solution
**Quality Criteria:**
- Accurate representation of current user behavior
- Realistic assessment of current solution limitations
- Quantified cost of current state where possible
- Clear drivers for change identified
## Information Gathering Requirements
### Market Research Data Needed:
- Industry reports and market studies
- Competitive intelligence and analysis
- User research and surveys
- Economic impact studies
- Regulatory and compliance documentation
### Validation Requirements:
- User interviews confirming problem existence
- Market data from multiple credible sources
- Competitive analysis from recent research
- Economic impact calculations with supporting data
## Cross-Reference Requirements
### Must Reference:
- Business objectives from requirements gathering
- User personas (to be developed in next section)
- Technical constraints from requirements gathering
- Success metrics framework
### Must Support:
- Product vision and positioning
- Feature prioritization decisions
- Go-to-market strategy
- Resource allocation decisions
## Common Pitfalls to Avoid
### Problem Definition Pitfalls:
- **Solution-first thinking**: Starting with solution and working backward
- **Problem inflation**: Making problem seem bigger than it actually is
- **Vague problem statements**: Using unclear or unmeasurable language
- **Multiple problems**: Trying to solve too many problems at once
### Market Analysis Pitfalls:
- **Outdated data**: Using market research that's no longer current
- **Unrealistic market sizing**: Overestimating addressable market
- **Cherry-picked data**: Selecting only data that supports desired conclusion
- **Missing market dynamics**: Ignoring important market forces
### Competitive Analysis Pitfalls:
- **Competitor dismissal**: Underestimating competitive threats
- **Feature comparison only**: Focusing only on features, not value proposition
- **Static analysis**: Not considering competitive evolution
- **Bias confirmation**: Seeing only what confirms existing beliefs
## Edge Case Considerations
### When Market Data is Limited:
- Clearly document data limitations
- Use proxy markets or analogous situations
- Create assumption framework for validation
- Plan primary research to fill gaps
### When Competition is Unclear:
- Broaden definition of competition
- Include indirect and substitute solutions
- Focus on user behavior and alternatives
- Document uncertainty and validation plans
### When Problem is Emerging:
- Focus on early indicators and trends
- Use leading indicators rather than lagging data
- Document assumptions about problem evolution
- Plan for rapid validation and iteration
## Validation Checkpoints
### Before Finalizing Section:
- [ ] Problem statement is clear and measurable
- [ ] Market data is current and from credible sources
- [ ] Competitive analysis is comprehensive and objective
- [ ] Current state analysis accurately reflects user reality
- [ ] All claims are supported by evidence or marked as assumptions
### Cross-Section Validation:
- [ ] Problem aligns with business objectives
- [ ] Market opportunity justifies investment
- [ ] Competitive positioning is achievable
- [ ] Problem scope matches available resources
## Output Quality Standards
- Professional business language
- Data-driven insights with sources cited
- Clear logical flow from problem to opportunity
- Actionable insights for product development
- Executive-ready presentation quality