I was asked recently how I evaluated alternative proposals. The question was asked in the context of social systems designs. And while there are a number of considerations that apply to social systems specifically, that in no way obviates the need for a fundamental understanding of the forces at play in your marketplace.
I won't even try to add value here. I think everyone should spend some time understanding at least this aspect of the work of Harvard's Michael E. Porter.
Recently the Harvard Business Review ran an article by Michael Porter. It included a pointer to a video of Porter describing his five forces that's definitely worth a viewing.