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A strategic approach to market intelligence
In the current climate, as companies search for critical answers to fundamental questions – strategy, products, markets, and partners – they must find short-term solutions for immediate revenue and profit improvements, and also uncover opportunities to create long-term value.
To do so, companies need a deep understanding of their markets – both in terms of overall market size, structure and trends, as well as in each of its myriad details. Piecing together this market intelligence “mosaic” is critical to addressing a company’s strategic and tactical challenges. Each individual element is valuable, and the value created from developing a holistic understanding of the total market ecosystem is enormous.
This article presents a strategic approach to market intelligence, and discusses:
- Issues that require market intelligence
- Typical weaknesses in market intelligence
- How a company should approach market intelligence
Issues that require market intelligence
Today’s operating environment is forcing companies to re-evaluate urgently many of their core strategic assumptions and tactical plans – both to yield immediate improvements and to secure the long-term future. For each of the issues listed below, in-depth market understanding and insight – into customer needs, competitive offerings, channel options, alliance opportunities, and more – is essential to finding the right answers.
Strategy issues
- What strategic objectives and milestones should we set for our company businesses?
- How can we improve our performance in our current businesses, products and markets?
- Which future businesses, products and markets make the most sense for us?
- What business model makes most sense for each of our current and future businesses?
- How should we finance, launch and scale each of our new business, product and market opportunities?
Product issues
- Do we have the right product vision and product roadmap?
- Do our products meet customer needs better than all other alternatives?
- Do we need to revise our current and future product portfolios?
- Do we need to refine our current value propositions – features, benefits, pricing, or positioning?
- Do we need to improve the customer experiences we are delivering?
- Can we innovate compelling new offerings?
Market issues
- Are we focused on the right markets, both in the short and long term?
- Are we focused on the right customers? Segments?
- To what extent, do we understand these markets / customers / segments now and how they will evolve over time?
- Have we accurately defined our customers?
- How can we extend our current customer relationships?
- How can we better educate, win, and grow customers in our current markets?
- Can we identify attractive, new “blue ocean” market niches, with high demand, healthy growth, and limited competition?
Partner issues
- Can we improve our relationships with, and the value we derive from, current partnerships?
- Can we partner to offer better “whole solutions”?
- Can we find partners to help us reach our target markets?
- Which elements of our business system are we best positioned to do ourselves and which can be better performed by other players?
Getting to the answers for any of these questions is challenging. You need to frame the issues correctly – and then use fact-based analysis to establish the facts, explore the options and make sound decisions. Particularly today, there are no second chances. Focusing on the wrong questions, or trying to resolve them in a haphazard manner with incomplete data, is likely to lead to failure.
Typical weaknesses in market intelligence
Though most executives readily acknowledge the need for fact-based analysis and decision-making, many companies do not have, or make best use of, the kind of market intelligence they need to address their key issues and concerns. There are a number of underlying reasons for this:
- Workload and daily pressures – most company executives are consumed by daily and weekly challenges. They do not have the time or resources to conduct the research and analyses they need, and are instead busy fighting fires.
- Unclear problem definition – it is easy to focus on the presenting problem rather than its root cause. For example, executives may battle low sales numbers through sales force improvements and changes instead recognizing the real problem – unclear market and poor product definitions. As a result, the right analyses are not done, leading to poor decision-making.
- Lack of actionable data – companies often rely on high-level overview reports from industry analysts that do not adequately present sufficient detail on their specific customers, competitors or channels. The actionable data you need for your particular product market is normally gained only through primary research – in-depth interviews and conversations with market participants.
- Embedded company beliefs – almost all companies evolve beliefs over time based on what worked and what didn’t in the past. These often develop into a deep-seated set of beliefs that everyone in the company is convinced is the recipe for success. When external conditions change, such companies remain trapped by these mental barriers, and do not notice or realize the implications of these external changes.
- Ease of relying on internal viewpoints – constrained by time and money, it is easy for executives to convince themselves that “we know our markets”. However, the vast majority of a company’s collective efforts go to convincing the market to purchase its products, not listening to the market to understand its realities. As such, people who think they know the market often “know” it as they want it to be, not as it actually is – and sooner or later the reality of the market intrudes in the form of poor results.
- Different functional perspectives – cross-functional discussions are frequently made difficult by the different worldviews of the different functions. Engineers, marketers, salespeople and operations people all see problems in different ways – and in the absence of objective market data, can struggle to find a common language for problem-solving.
How a company should approach market intelligence
To maximize the impact of market intelligence in your company, we recommend the following approach:
Use a holistic framework
Begin by developing a holistic framework of the total ecosystem in your market, to understand the key market categories and players. Then choose the right combination of detailed analyses for the specific issues you need to resolve.
Analysis |
Sample goals |
Ecosystem |
Develop high-level overview of a market and key trends. |
Customers |
Understand customer needs and problems, and satisfaction with client and competitive solutions |
Competitors |
Understand competitive value propositions (features, pricing and positioning) |
Partners |
Identify prospective strategic alliance partners and understand their goals and needs |
Channels |
Understand the range of channel partner options and their needs and goals |
Vendors |
Identify the best vendors to manufacture a new product offering |
Influencers |
Understand the perspectives of key media contacts, industry analysts, and other influencers |
Investors |
Identify angel, venture capital, private equity or strategic investors focused on your market |