Strategic Market Analysis – The Foundation for Smarter Business DecisionsNov 06, 2020
Strategic market analysis is the solid foundation from which to build your business intelligence. Having careful, objective, and professional analysis of the marketplace, competition, internal resources and capabilities and assessing future trends built on hard data and evidence is paramount.
All Companies have a critical need for strategic market analysis. Strategic market analysis provides an understanding of the market you are competing in to be successful. Here are a few of the questions you can achieve insights into:
· What is the Total Available Market (TAM) for our products and services?
· How much of TAM is serviceable by our company? What is the Service Addressable Market (SAM)?
· What is our share of market (SOM) opportunity?
· Who are our main competitors and what are their strengths and weaknesses relative to ours?
· What threats do our competitors pose and what opportunities do they create for us?
· How should we prioritize our Go To Market efforts? Where should we focus?
· Is this a market we should be investing in or planning to exit?
· Should we consider merging, acquiring, or selling?
· What market trends can we take advantage of, or do we need to address to grow?
· Does our business plan reflect the market wants?
· Are there market niches we are missing, or should be growing?
· What are the market segments that are growing, or declining?
· Are we missing any important market segment opportunities?
· Do we have a deep understanding of our competitors which will allow us to exploit their weaknesses?
Planning and Allocating Market Analysis Resources
Planning and allocating resources for strategic market analysis is essential whether your needs are for proprietary or off-the-shelf research. The value proposition in making a sound purchase decision should come down to the strategic value of the information vs. the cost.
The place to start is with the most accurate and up-to-date information you can get your hands on when trying to make decisions that will produce the desired result. Outdated or bad information will result in a cascading effect of bad decisions. Because of this, allocating sufficient resources for strategic market analysis and business intelligence is necessary. Their costs are insignificant compared to the capital, assets, and business failure you risk by making bad decisions based on flawed or obsolete data.
One note of caution, you should be of aware is that lower cost off-the-shelf research when not used for its intended purpose of broad view and general trend information will likely cost more than proprietary research.
Proprietary Research or Off-the-Shelf Research
The important key to whether proprietary custom or off-the-shelf research is best for you depends. It depends upon answers to questions like these:
· Why do you need the data?
· Are you simply in need of broad trend data?
· Do you need it to plan and allocate operational resources?
· Do you need specific information on sub-segments of the market?
· Is having a deep dive into the competition required?
· Will you need data to enhance buying & decision making processes?
· Do you need strategic and market analysis?
Bottom line proprietary market research is the choice for comprehensive and specific information that allows you to make informed operational and tactical decisions. Also when you need more data points like:
· Total Available, Service Addressable, and Share of Market (TAM, SAM, SOM) size and forecasts by product or region
· Deep dive competitive information
· Understanding market behavior needs and wants
· Analyzing your capabilities to deliver against market needs
· The help of a market expert to leverage industry data from proprietary databases
Off-the-Shelf market research is best for a broad view of the market without a lot of specifics. This type of market research attempts to satisfy the needs of most people wanting to gain a high-level view of a market or industry.
When off-the-shelf or Internet research is used as the method for obtaining market data it is often referred to as a “Swiss cheese” approach. However, the problem, as we know with Swiss cheese, is that it has holes in it. This method is fraught with issues like:
· quality of the data
· old data, the freshness of the data
· not getting the whole picture
· comparing apples to oranges
This approach is like trying to build a jigsaw puzzle with pieces from different puzzles. Is this want you to want as the foundation for your decision making?
No matter the type of market research, the important point to remember is that no successful business goes to market without all the market research it can obtain and continues to utilize market research consistently to remain successful.
Blumberg Advisory Group has extensive experience in conducting Strategic Market Analysis studies within the Aftermarket Service (e.g., field services, reverse logistics) market. Schedule a call today to learn why software vendors, manufacturers, and Third-Party Service providers turn to Blumberg when they need critical information about target markets and customers to fuel business expansion.
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