A calm beach and perfect day for swimming. Bob an experienced diver, wades into the waters with his swimming kit. Colourful fish swam around him gently……..and then suddenly he is surrounded by Piranhas. Where did they come from? Panic struck, but help was nearby and Bob was saved. Did the Piranhas appear from nowhere? They were always there…..Bob ignored the WARNING sign that said ‘Piranhas infested Water…..Swim at your own Risk’.
Picture this now for your business. You do a product launch in a new market. You are confident that you have done this before, so why not this one? Direct launch without understanding the market dynamics and competition in a new geography. You may succeed, but risk of FAILURE is High and can drain your finances.
VUCA Challenges
Today’s markets are evolving continuously. Businesses operate in a VUCA environment. There is:
- Volatility
- Uncertainty
- Complexity
- Ambiguity
These pose challenges for any business to analyse, respond or plan for. A successful strategy is dependent, not only by knowing its own customers, its own resources and its past performance It is critical to have intelligence on new market developments especially the competitive landscape, on a continuous basis.
Market intelligence helps to define market opportunities, customer segments and their requirements, emerging and disruptive trends, competitive dynamics and other relevant information. It provides management with strategic data for decision-making insights. Benchmarking key metrics with regional and global players can identify gaps in your internal capabilities. For businesses considering new market entry, enables them to make an informed strategic Go/No-Go decision.
Top-Down Strategic Approach
A strategic market assessment is the answer. Unlike a customer survey, which builds up information bottom-up, a top-down approach can be done in a much lesser time for making an informed decision. Delphi Method is one such process, which is used to collect market opinions from a group of EXPERTS. Information flow is from competitors, distributors, past industry employees and others, to get their views on the market to derive conclusions. In some cases, select end users are met for interviews or focus groups. Target is not 99% accuracy, but arrive at a realistic informed conclusion, to enable management to make a strategic investment decision.
Free Information
One can start with conducting thorough research of information available in public domain. In today’s age, there is huge volume of information available on the net, including macro-economic data, demographics, market trends, etc. which is mostly free. Some relevant published reports can also be purchased, but their credibility needs validation. This will give you an overall understanding of the market dynamics and gear you up, to have an intelligent conversation with the market experts.
Art of Intelligent Conversations
Next, dive into conducting interviews with the target experts. Developing a database with contacts beforehand helps, so you are clear on the number of meetings required. Not all contacts will be available at the beginning. So build-up the list along the way. You may ask, why should competitors talk with you and provide information? Well, it is an art! Do not go in to only get their information. Show some knowledge of the market…..remember the secondary research you did at the start! It is an intelligent conversation you need to have and not pull out a questionnaire to fill in. Prepare well for these conversations, since you may not get another meeting with them. I prefer to do an in-person meeting, based on time availability and convenience of the participants. Else, get on a video call.
Analyse and Validate
So now you have all relevant information from secondary research and interviews. Analyse and triangulate the information to arrive at ‘near accurate’ conclusions on market size, gaps, growth and hence opportunity to participate for your company. More importantly, decide on how you will differentiate from established competitors. Get the analysis cross-validated with some experts you interviewed one more time, to confirm all assumptions and accuracy. So do not burn bridges with them after your first round of meetings!
Dive-In Knowingly
Market assessment is a strategic tool and do not undermine its importance. Businesses invest millions to enable sustainable business growth. Wrong decisions can cause multi-fold losses. Investing in conducting this exercise is critical, either by capable internal staff or outsourcing to specialists. In ‘Finding Nemo’, the fish was lucky to have survived multiple predators, to get home safely. Reality is that the ‘Jaws’ of a wrong decision will drag your business into the darker end of competitive waters!
This article is contributed by Manish Kotwala, Partner – Strategy & Business Transformation, MCA Management Consultants. He can be reached on manish.k@mcagulf.com
