The Handbook of Market Intelligence

Understand, Compete and Grow in Global Markets

Hans Hedin, Irmeli Hirvensalo, Markko Vaarnas

• Publisher: Wiley
• Year: 2014
• ISBN:
  9781118923603
• Edition: 2
• Topic: Business
• Subtopic: Marketing Research
• Index: Business

An important update to this roadmap for the development of a corporate intelligence program Market intelligence is the distinct discipline by which organisations systematically gather and process information about their external operating environment in order to facilitate accurate and confident decision making that is based on insight. For companies to thrive in the global post-recession marketplace, their management needs future-oriented business information. The Handbook of Market Intelligence provides a one stop shop, step-by-step roadmap for establishing, conducting and further
developing corporate intelligence programs within an organisation and then shows how organisations can turn market data into actionable insights. • Full of best practice advice from hundreds of real-life international case studies • Outlines the anticipated future trends in Strategic Market Intelligence based on unique global survey data • Provides guidance on extracting relevant, useful and accurate market information that can be used for successful business development

Part 1
Market Intelligence in Global Organizations

• Chapter 1: Market Intelligence: Drivers and Benefits
  • Understand, Compete and Grow – The Decision-Maker’s Challenge
  • Market Intelligence: Turning Data into Insight
  • About This Book
• Chapter 2: Market Intelligence in Global Organizations: Survey Findings in 2013
  • Introduction
  • How the Survey Was Conducted
  • State of Market Intelligence in Global Companies in 2013
  • Industry Comparison
  • Companies with World Class MI Functions
  • Market Intelligence in B2B and B2C Companies
  • Summary

Chapter 1
Market Intelligence: Drivers and Benefits

UNDERSTAND, COMPETE AND GROW – THE DECISION-MAKER’S CHALLENGE

ANOTHER DECISION AHEAD

---

On another busy morning in a large international apparel company, two executives are sitting in a meeting room, having agreed on a planning session in preparation for the upcoming strategic planning workshop. Their challenge is to come up with a preliminary market entry strategy to Brazil that seems to provide lucrative business opportunities among the growing middle class population. Indeed some of the company’s competitors have already established a presence in Latin American countries, with varying degrees of success.

Knowing the complications of the task ahead, the executives have decided to first compile a list of questions that they will need an answer to before they can formulate a market entry strategy. Who are the potential customers; what are the demographics, and how does the local culture shape the habits and preferences of people with regards to clothing? Where does the competition come from, and are the competitors making money? What about the local legislation and interest groups; who are the local players that should be taken into account? What are the primary trends affecting local consumer behavior, and how vulnerable is the market to economic or political disruptions? How differentiated should the market entry strategies be for different countries in Latin America? And the list goes on.

The questions to strategic decision-makers are hardly new, yet the executives find themselves putting their best effort into trying to make sense of the unknown territory that they have set their eyes on. The company’s executive team and indeed the shareholders would expect to see a winning strategy that will help the company enter a new market, compete successfully in it, and grow its revenue, profits, and brand value as a result.

---

THE MARKETPLACE IS GETTING INCREASINGLY COMPLEX

Companies operating in the global marketplace derive their revenue from an increasingly complex set of local markets, and the executives in our example above are not alone with their challenge: to be able to compete and grow, there’s a lot to build an understanding about. In the Global Market Intelligence Surveys conducted by GIA, executive and professional respondents have listed out opportunities and threats that frequently top the agendas of executive decision-makers:

Opportunities

• Mergers & Acquisitions
• Winning market share from competition
• Expanding into new markets geographically or product-wise
• Finding innovative business models
• Spotting new demand for products and services
• Generating new partnerships

Threats

• Price erosion
• New competitors entering the market
• Emerging business models
• Consolidation or fragmentation of the value chain
• Limited understanding of the current trends
• Changing customer behavior

Looking at the list of remarkably broad and strategic topics, it is easy to see why competitiveness and growth can only be driven by an understanding of the business environment: every single opportunity and threat that the survey respondents brought up involves a number of market players, industries and trends, and a number of complicated interdependencies between them.

While the operating environment of any global organization nowadays is complex and multidimensional, it can be analyzed in a structured fashion. In Figure 1.1, we present a model to map out the operating environment of an organization in a straightforward, yet comprehensive way. Although the model is simplistic, or even because of that, it has proved its usefulness in companies across different industries.

Figure 1.1 The operating environment of global organizations is complex and multidimensional

Every organization is part of a value chain within which it has customers, potentially customers’ customers, different types of competitors, and suppliers. In a typical scenario, the organization also needs to work with a number of interest groups, such as legislators, government bodies, and trade unions.

The individual market players alone will make up a complex operating environment: some of the players are old and well established, others are emerging either with new business models or services, or they are simply entering the market as newcomers. In addition to providing different business models and substituting products and services, some of the market players may also be seeking growth by forming partnerships or integrating forwards or backwards along the value chain. Finally, the interest groups also bring about changes and developments in the marketplace that the organization needs to stay aware of.

The individual suppliers, competitors, and customers along the value chain make up clusters and industries, the dynamics of which the company will also need to understand (going up the vertical axis in Figure 1.1). To be able to maintain a forward-looking stra...