Strategic Market Analysis – Aftermarket Services
Strategic market analysis is the foundation for smarter aftermarket decisions.
Our last blog, “Business Intelligence for Service Providers” discussed how business intelligence is a decisive tool in the ability to improve operational and service performance on a daily basis in aftermarket services.
In this article, we will be discussing another important tool for service business success, strategic market analysis. Sometimes confused with business intelligence, strategic market analysis focuses on knowing:
- the size of the market
- market forecasts & trends
- market wants and niches
- market segmentation
- your competition
Strategic market analysis also assists your operational and tactical efforts as well as the proper allocation of strategic and tactical resources. The key point here is that Strategic Market Analysis and Business Intelligence are best employed as one integrated tool and not as stand-alone marketing tools.
Strategic Market Analysis is the Foundation for Smarter Decisions
Strategic market analysis is the solid foundation from which to build your business intelligence. Having careful, objective and professional analysis of the market place, 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’s the total market opportunity?
- What is our current market share?
- Who are our main competitors?
- 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 market wants?
- Are their 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 that 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 a 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 absolutely 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 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 on 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:
- Market size and forecasts by product or region
- Deep dive competitive information
- Understanding market behavior, needs and wants
- Analyzing your capabilities to deliver market needs
- The help of a market expert to leverage industry data from a proprietary database
Off-the-Shelf Research 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 cursory view of a market or industry.
When off-the-shelf or Internet research is chosen for the wrong reason, usually cost this can be fraught with issues like:
- quality of the data
- old data, freshness of the data
- not getting the whole picture
- comparing apples to oranges
This approach is like trying to build a jig saw puzzle with pieces from different puzzles. And, it becomes the foundation for your decision making?
Take Away
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 on a consistent basis to remain successful.
