strategy

Types of Market Research

Types of Market Research Jonathan Poland

Market research is the process of systematically gathering and analyzing information about a market, including customers and competitors. This information is used to generate knowledge and data about the market, and can help businesses to make informed decisions about their products, services, and strategies. Market research typically involves both qualitative and quantitative analysis, and may use a variety of sources, including data providers, social media, industry partners, influencers, experts, and customer feedback.

One key aspect of market research is understanding customer needs and preferences. By conducting surveys, focus groups, and other research methods, businesses can gather information about what customers want and need from their products and services. This information can help businesses to develop products and services that meet the needs of their customers and improve their chances of success in the market.

Another important aspect of market research is understanding the competitive landscape. By conducting research on competitors, businesses can identify their strengths, weaknesses, and strategies, and develop strategies to compete more effectively. This may involve analyzing competitors’ products, pricing, marketing efforts, and other factors to identify areas where the business can differentiate itself and gain a competitive advantage.

Overall, market research is a crucial practice for businesses that want to succeed in their market. By gathering and analyzing information about customers and competitors, businesses can make informed decisions and develop effective strategies to compete and succeed. The following are common to market research.

Business Analysis

Business Analysis Jonathan Poland

Business analysis is the practice of researching and developing strategies, plans, solutions, and studies to support the goals and objectives of a business. Business analysts are responsible for gathering information about the needs of the business and using that information to develop recommendations and solutions.

Business analysis involves several key steps, including defining the scope of the project or problem, conducting research to gather information, analyzing the information to identify trends and insights, and developing recommendations and solutions based on the analysis. Business analysts may use a variety of techniques and tools to support their work, such as interviews, surveys, market research, and financial analysis.

One key aspect of business analysis is the ability to identify and prioritize the needs of the business. This involves understanding the business’s goals and objectives, as well as the challenges and opportunities it faces. By identifying the key issues and priorities, business analysts can develop solutions that align with the business’s goals and address its most pressing needs.

Another important aspect of business analysis is the ability to communicate effectively with stakeholders. This involves presenting findings and recommendations in a clear and concise manner, and working with stakeholders to ensure that the solutions developed align with the business’s goals and objectives. By effectively communicating with stakeholders, business analysts can help ensure that their work is understood and implemented effectively.

Overall, business analysis is a crucial practice for supporting the decision-making process and driving business success. By conducting research and analysis, business analysts can provide valuable insights and recommendations that can help businesses to achieve their goals and stay ahead of the competition.

Strategic Planning
Developing strategies to achieve goals in the context of constraints and competition.

  • Budget Planning
  • Business Models
  • Competitive Intelligence
  • Critical Success Factors
  • Estimates
  • Market Research
  • Reference Class Forecasting
  • Scenario Planning
  • Strategic Drivers

Techniques
Core business analysis methods and approaches.

  • Black Box
  • Business Needs Analysis
  • Business Process Analysis
  • Business Rules
  • Capabilities
  • Capacity Planning
  • Data Analysis
  • Data Dredging
  • Data Mining
  • Decision Analysis
  • Fishbone Diagram
  • Ishikawa Diagrams
  • Key Performance Indicator
  • Mece
  • Metrics And Measures
  • Operations Analysis
  • Pain Points
  • Premortem
  • Problem Analysis
  • SWOT Analysis
  • Technology Analysis
  • Voice Of The Customer
  • Workflow Analysis

Requirements
Capturing requirements for programs, projects and initiatives.

  • Behavioral Requirements
  • Business Needs
  • Business Requirements
  • Business Requirements Document
  • Context Of Use
  • Customer Interviews
  • Functional Requirements
  • Needs Analysis
  • Non-Functional Requirements
  • Productive Assumptions
  • Requirements Elicitation
  • Requirements Gathering
  • Specifications
  • Story Points
  • Use Case
  • User Stories

Other Deliverables
Other common work products delivered by business analysts.

  • Audience Analysis
  • Brand Analysis
  • Business Architecture
  • Business Case
  • Business Plan
  • Business Process Mapping
  • Customer Journey Map
  • Feasibility Analysis
  • Gap Analysis
  • Project Charter
  • Proof Of Concept
  • Statement Of Work
  • Terms Of Reference

Management Accounting
Numerical methods for business analysis and management.

  • Baseline
  • Benchmarks
  • Best In Class
  • Bottleneck
  • Cost Benefit Analysis
  • Forecasting
  • Net Present Value
  • Quantification
  • Rate Of Return
  • Statistical Analysis
  • Time Value Of Money
  • Total Cost Of Ownership

Business Theory
A few key business concepts that are often relevant to business analysis.

  • Choice Architecture
  • Line Of Business
  • Organizing Principle
  • Strategic Dominance
  • Structure Follows Strategy

Competitor Analysis

Competitor Analysis Jonathan Poland

Competitor analysis is the process of gathering and analyzing information about competitors in a market in order to understand their strengths, weaknesses, and strategies. This information can be used to inform business decisions and develop competitive strategies.

To conduct a competitor analysis, businesses typically gather information about their competitors through a variety of sources, including websites, social media, trade publications, and industry reports. This information is then analyzed to identify key trends and insights about the competitors, such as their product offerings, pricing strategies, target markets, and marketing efforts.

One key aspect of competitor analysis is identifying the strengths and weaknesses of each competitor. For example, a competitor may have a strong presence in a particular market or offer high-quality products, but have a weak online presence or lack a clear differentiation from other competitors. By understanding these strengths and weaknesses, businesses can develop strategies to capitalize on opportunities and mitigate potential threats.

Another important aspect of competitor analysis is understanding the strategies and tactics of each competitor. This includes analyzing the marketing messages and tactics used by competitors, as well as their overall business model and approach to the market. By understanding how competitors are positioning themselves and targeting customers, businesses can develop strategies to differentiate themselves and compete more effectively.

Overall, competitor analysis is a crucial part of the strategic planning process for businesses. By gathering and analyzing information about competitors, businesses can gain valuable insights that can help inform their decision-making and develop effective competitive strategies. The following are included in a competitor analysis.

Brand Awareness

The percentage of your target market that are familiar with the competitor’s brand. Customers tend to buy what they recognize and it can be difficult to challenge a brand that is well known.

Costs

Estimating the costs of a competitor’s products from financial statements. In many industries, cost is a key factor and challenging a competitor that has efficiently scaled is difficult.

Products

Identifying the strengths and weakness of the competitor’s products from sources such as product reviews.

Customer Experience

Evaluations of the competitor’s customer experience such as customer service.

Capabilities

Evaluating business capabilities that are relevant to your industry.

Financials

The financial resources of the competitor.

Organizational Culture

Is the competitor lean and innovative or burdened by excessive office politics and unimaginative leadership?

Intellectual Property

Legal barriers to competition such as patents, copyrights, trademarks and licenses.

Know-how

Knowledge resources of the competition.

Relationships

Considering the relationships of the competitor with regulators, partners, customers and communities.

Distribution

Looking at the competitor’s distribution strategy. For example, a competitor that doesn’t compete in a particular region.

Marketing

Considering the competitor’s marketing strategies such as promotional activities and pricing.

Risks

A summary of competitive strengths that are difficult to challenge.

Opportunities

Opportunities such as dissatisfied customers, competitive disadvantages or niches that aren’t served by competitors.

Product Markets

Product Markets Jonathan Poland

A product market is a venue where buyers and sellers can exchange goods or services. Product markets can be large and competitive, such as an online marketplace or a stock exchange, or they can be small and relatively non-competitive, such as a farmer’s market or a roadside fruit stand. Product markets can serve different types of buyers and sellers, including consumers, businesses, and governments. The purpose of a product market is to facilitate the exchange of goods and services, and to help buyers and sellers find each other and agree on a price. Product markets are an essential part of the economy, as they allow businesses to generate revenue and provide consumers with the goods and services they need. The following are some common examples.

Airport Concessions Art Galleries
Auction Sites & Apps Auctions
Automotive Showrooms Barter
Brand Apps Brand Showrooms
Buy / Sell Classifieds Catalog Merchant
Christmas Markets Co-operatives
Conferences Convenience Stores
Custom Product Services Department Stores
Direct Marketing Dollar Stores
Drug Stores Ecommerce Sites
Events, Festivals & Concerts Factory Outlet
Fair Concessions Farmers Markets
Fashion Retailers Fast Food Restaurants
Fish Markets Flagship Locations of Brands
Flea Markets Flower Shops
Franchises Fruit Markets
Fruit Stands Garage Sales
Gift Shops Grey Market
Hobby Shops Home Improvement Retailers
Hotel Shops In-flight Shopping
Individual Sellers Infomercials
Jewelry Shops Kiosks
Liquidators Luxury Retailers
Mail Order Sales Malls
Mobile App Stores Personal Selling
Product Demonstrations Product Subscriptions
Real Estate Agents Real Estate Developer Showrooms
Refurbished Goods Sellers Resellers
Seasonal Markets Shopping Channels
Souvenir Shops Specialty Shops
Sports Stores Street Food
Subscription Boxes Super Stores
Supermarkets Surplus Shops
Telemarketing Theater Concessions
Thrift Stores Toy Stores
Traveling Salesperson Vending Machines
Wholesale Markets

Fast food can be considered a product because most of its value is tangible. This can be contrasted with a fine restaurant that offers mostly intangible value. The latter is considered a service.

A flagship location is a large retail location that is often in a posh location. These are designed to show off the best of a brand and often serve as a brand symbol and media center.

A grey market sells a product without official permission from the producer. For example, an American retailer that imports French chocolates that aren’t officially available in the United States.

Liquidators sell undesirable or excess inventory at a steep discount. For example, an unpopular color of product that a manufacturer sells cheaply to clear inventory.

Generally speaking, homes are a product but land is a special type of asset that doesn’t typically depreciate in value.

It is common for businesses to purchase products through personal selling and wholesale markets. For example, a bank that negotiates prices for stationery with a large office supply firm that then regularly reorders these supplies with a telephone or digital service.

Competitive Markets

Competitive Markets Jonathan Poland

In a competitive market, multiple participants exchange value without any single entity having control over the market. This type of market is significant because it provides incentives for participants to be efficient and improve their offerings. The following are some common examples.

Commodities

A commodity is a product or service that is perceived as identical by consumers, regardless of the producer. In these markets, brands and quality differences have little impact on consumer behavior, so all producers must accept a market price. Commodity markets are highly efficient, requiring producers to maintain a reasonable level of cost and quality in order to participate.

Fast Moving Consumer Goods

Fast moving consumer goods are products that are quickly used and repurchased. In this market, consumers need to make many decisions quickly such that they will strongly rely on brand recognition and brand awareness to make purchases. As such, large firms with dominant brands and big advertising spends dominate in this market. For example, the market for soft drinks, packaged food and toiletries.

Luxury Goods

Luxury goods are superior goods that build up significant customer motivation with elements such as high quality, social status, style and image. This is difficult to do and requires things like advertising spend, association with high status individuals and product designers who know what a market desires. For example, a luxury brand of chocolates that is associated with a well known chocolatier and status such as posh locations. High prices, small portions, luxurious packaging and quality may also drive a sense of luxury status and customer experience.

Labor

Labor is a competitive market whereby people gain valuable knowledge, talent, skills, experience, relationships and reputation in order to compete for desirable positions. Likewise, firms offer salaries, office locations, social status and an interesting mission to compete for talent. If labor weren’t a competitive market, people would have little or no incentive to learn, improve and deliver results. Likewise, firms would have no incentive to provide good working conditions and salaries.

Financial Markets

Financial markets such as a stock market whereby a large number of buyers compete to buy and sell capital such as shares in the future earnings of firms. This ends up funding firms that have done well to produce value while restricting funding to firms that are destroying value. In other words, competitive financial markets efficiently allocate capital to its most productive or highest potential uses. For example, a high performing firm with a high stock price can easily raise money by issuing more stock.

Foreign Direct Investment

Countries compete for investment on a global basis. This is known as foreign direct investment. For example, a nation may offer poor environmental and labor protection to attract global manufacturing investments. This situation is known as a race to the bottom. Competition for foreign direct investment also gives nations positive incentives in areas such as education, infrastructure and quality of life whereby they may be able to attract the headquarters of firms and other high value facilities such as research & development sites.

Economic Bads

An economic bad is a negative result of the production and use of economic goods. These can be capped at some sustainable level and then the right to produce this economic bad can be traded on a market. For example, the harvest of a non-renewable resource such as a species of fish can be capped and the licenses to do so traded on an open market. This could help prevent damage to people and planet.

Universities

Many non-financial human activities also resemble markets. For example, universities compete to attract talented students that will provide the institution with research prowess and status. This all translates to money for the institution such as grants and donations.

Competitive Factors

Competitive Factors Jonathan Poland

Competitive factors are external forces that impact a business’s strategy. They can be identified in any competitive situation. SWOT and PEST analysis are two common strategic planning tools that help identify these factors, which are often referred to as opportunities, threats, political, environmental, social, and technological factors. The following are some common examples.

Ability to Change (of competition) Access to Capital
Anti-Competitive Practices Attitudes & Values
Bargaining Power Barriers to Entry
Barriers to Exit Brand Image
Brand Recognition Brand Reputation
Business Models Business Risk
Capacity Climate & Weather
Consumer Perceptions Contract Terms (of competition)
Culture Change Customer Experience
Customer Loyalty Customer Needs
Customer Pain Points Customer Satisfaction (of competition)
Disaster Risk Distribution
Economic Conditions Economies of Scale
Employee Satisfaction (of competition) Financial Conditions (e.g. interest rates)
Functions & Features Government Policy
Infrastructure Intellectual Property
Know-how Labor Market Conditions
Location Management Efficacy (e.g. incompetence of competitors)
Market Share New Entries (into a market)
Operating Models Organizational Culture (how does the competition work)
Overhead Costs Partnerships
Permits & Licenses Political Environment
Political Stability Pollution
Price Competition Problems & Incidents (of the competition)
Product Development (i.e. future products of competition) Product Positioning
Product Quality Product Variety
Promotion Regulations & Compliance
Relational Capital Revenue Models
Service Quality Strategic Assets
Strategy of Competition Substitute Goods
Suppliers Supply
Supply Chain Switching Costs
Talent Taxation
Technological Change Trade Barriers
Trade Secrets Turnaround Times (of competition)
Unit Costs Usability

Business Environment

Business Environment Jonathan Poland

The business environment refers to the external factors and conditions that can affect a company’s operations and performance. It includes elements such as the economic climate, political landscape, technological developments, and competitive landscape. The business environment can have both positive and negative impacts on a company, and it is important for businesses to be aware of the various factors that can affect their operations.

The business environment can be divided into three main categories:

  1. Micro environment: This includes factors that are directly related to the company, such as customers, suppliers, shareholders, and employees.
  2. Macro environment: This includes larger, external factors that can affect the company, such as economic conditions, political climate, and technological advancements.
  3. Global environment: This includes factors that have an impact on the company’s operations on a global scale, such as international trade policies, cultural differences, and global economic trends.

It is important for businesses to carefully monitor and analyze the various elements of the business environment in order to anticipate and respond to changes and opportunities. This can help companies to make informed decisions and stay competitive in their market. The following are illustrative examples.

Economic Environment

An economic environment including the interest rates, credit conditions, growth rate, debt levels and price stability of an economy.

Business Cycle

The state of your industry. For example, an industry that is investing in capital and expanding supply versus an industry that is divesting and reducing supply.

Confidence

The confidence of businesses and consumers. For example, an environment where customers are optimistic about the future such that they are taking out loans, reducing savings and spending.

Competition

The competition and their competitive advantages. For example, a small firm entering a market dominated by a large firm with high brand recognition, a large number of loyal customers and a good reputation.

Political Environment

The political environment including the stability of a government and society.

Economic Security

The resilience of the economies in which you operate. For example, a nation that has poor IT infrastructure that is vulnerable to information security risks.

Culture

The cultures in which you operate including national cultures, communities, business culture and consumer culture.

Values

The values of the societies in which you operate. For example, a society that demands that firms not damage the environment.

Customers

Customers including demand levels, customer needs, preferences and perceptions.

Demographics

The characteristics of current and future populations. For example, a fashion firm that enters a market with a large number of teenagers and young adults.

Regulations & Taxation

The burdens placed on a business by governments including taxation, administrative burden and regulations.

Trade

Access to foreign markets and competition from abroad.

Resources

Access to resources. For example, a trade war that threatens to cut off a critical supply.

Productivity & Efficiency

The output you get for each unit of input. Productivity and efficiency rates can differ greatly from one country to the next based on factors such as working culture, infrastructure and access to education.

Markets

The characteristics of your markets. For example, a product category that is dominated by a single ecommerce company.

Partners

Your network of partners including factors such as partner performance or competition for partnerships. For example, a supply shortage that makes it difficult to secure critical parts.

Change

Changes to business models, technology, values, customer needs, products and competitive capabilities. For example, an energy company that has its business model challenged by a cleaner, less expensive form of energy.

Risk

Uncertainty about change. For example, the risk your competition will release a product that is an order of magnitude better than yours.

Sustainability

Your impact on nature and communities. For example, a hotel that owns land that is critical to an endangered species.

Internal Environment

The term business environment is occasionally extended to include the internal environment of a firm such as its strategy, operations and corporate culture.

Stability

Stability Jonathan Poland

Stability is the ability of a system, organization, or individual to maintain its current state or condition despite external pressures or challenges. This does not necessarily mean that change does not occur, but rather that any changes are gradual and predictable, rather than sudden and disruptive. Stability is often seen as a positive trait, as it allows individuals and organizations to plan and adapt to change in a controlled and orderly manner. However, too much stability can also be a negative, as it can prevent organizations from adapting to changing market conditions and staying competitive. Here are some examples.

Science & Engineering

In science and engineering, stability denotes a system that is in equilibrium that is able to return to equilibrium when disturbed. For example, a building that stands upward resisting the forces of gravity is in equilibrium. Such a building may flex to disturbances such as wind and earthquakes but will return to equilibrium whereby it is relatively motionless.

Systems

People create social stability with systems such as a society. For example, a political system that provides a somewhat stable way to decide what to do as a group.

Culture

Culture is the understanding that emerges with the shared experience of groups. Unlike systems, culture is spontaneous and unplanned. Old cultures such as traditional cultures and national cultures can be viewed as stabilizing influences that provide some consistency to life over many generations. For example, a holiday or pastime that provides experiences that are familiar to multiple generations of a family.

Institutions

Institutions are enduring features of a society that provide stability and consistency. Families are institutions as are governments. It is also common for profit seeking firms such as a newspaper company and non-profits such as a charity to be viewed as institutions.

Peace

Peace is the capacity of nations to use diplomacy to resolve differences without falling into a state of conflict and war. War can be viewed as total social instability.

Civility

Civility is respect for the systems and norms set forth by a society to resolve disputes. This is the basis for the domestic stability of a nation. For example, using the law and political system to try to address something you view as unjust.

Resilience

Resilience is the capacity to endure stress. For example, a city that is prone to earthquakes and hurricanes that has building codes and infrastructure that mitigate the risk of these events.

Personal Resilience

Personal resilience is the capacity of a person to persevere in the face of the inevitable challenges that life presents. For example, an employee who can’t be derailed or distracted by negative office politics.

Information

Information is the opposite of uncertainty such that it tends to increase stability. For example, a student who learns a great deal about a university program and related professions before choosing a major may be less likely to change their major later.

Risk Avoidance

Risk avoidance is the process of avoiding uncertainty. As all opportunity involves some uncertainty, this can involve overly cautious choices that increase short term stability but decrease long term stability. For example, a homeowner who avoids renovations on an aging home because dealing with contractors feels like a risk. This may create significant long term instability such as serious livability issues with their home.

Calculated Risk Taking

Taking unintelligent or unmanaged risks creates instability. However, calculated risk taking is the basis for long term stability. For example, small social risks such as introducing to someone may pay large dividends in terms of future friendships, career and family.

Group Harmony

Group harmony is a society, culture, organization or social group that values harmony between its members above all else. Organizations and societies that value harmony tend to lack creativity due to a lack of creative tension. In fact, such groups are likely to make fully irrational decisions simply for the sake of conflict avoidance. This essentially sacrifices all future stability for short term social stability.

Status Quo

The status quo is the way that things have been in the past. Stability doesn’t mean that you don’t change. In fact, as the world constantly changes standing still is likely to be quite unstable. Nevertheless, people have a tendency to defend the status quo. This may serve stability where it prevents radical change for the purpose of radical change. However, irrational defense of the status quo can lead to stagnation, decline or neglect serious risks.

Strategic Goals

Strategic Goals Jonathan Poland

Strategic goals are the specific outcomes that an organization or individual hopes to achieve through their strategy. The strategic planning process typically begins with the identification of these goals, as they provide the foundation for the rest of the process. Without clear goals, it is difficult to develop a coherent and effective strategy. Strategic goals should be specific, measurable, attainable, relevant, and time-bound, and should align with the organization’s or individual’s overall mission and vision. By setting and pursuing strategic goals, an organization or individual can increase their chances of achieving their desired outcomes and succeeding in a competitive environment. The following are illustrative examples of strategic goals.

Revenue

Grow revenue by 11% to $14 million per year.

Overhead Cost

Reduce human resources overhead by $600,000 a year.

Unit Cost

Reduce the unit cost of our 300 watt solar panel modules to $190.

Productivity

Increase productivity to $157.50 per hour.

Efficiency

Decrease the water used per ton of apples by 22%.

Waste Reduction

Transition all internal logistics to reusable packaging to reduce wasted materials by 27 tons per month.

Business Capabilities

Develop a tool that forecasts future surplus stock levels based on current sales trends. Goal: increase inventory turnover by discounting unpopular colors earlier in the sales cycle.

Return on Investment

Construct and operationalize 7 data centers with a 5 year return on investment of 270%.

Risk Reduction

Diversify our partnerships to reduce the risk of a revenue disruption due to a dispute or issue with a partner. Goal: reduce risk exposure by 50% or more.

Process Improvement

Improve the quality control process to reduce customer detected quality issues at unboxing to undetectable levels.

Competitive Advantage

Develop a competitive advantage over the other souvenir shops on the street by securing prime locations near the temple and station.

Market Penetration

Capture 12% market share for ice cream products in the Eastern United States.

Diversification

Reduce concentration risk by diversifying into new types of crop. Goal: 40% of revenue from non-corn crops.

Sales Volumes

Increase sales volumes to 1 million units a month within 5 years.

Customer Acquisition Cost

Reduce customer acquisition cost to $1550 for private banking clients.

Customer Lifetime Value

Increase customer lifetime value to $650,000 for private banking clients.

Customer Satisfaction

Increase patron satisfaction with library services to 80%.

Organizational Culture

Instill the norm that employees not overbook meeting rooms that go unused. Goal: Improve room utilization to at least 90%.

Throughput

Increase the throughput of the Chicago call center to 29,000 calls a day.

Service Quality

Improve the accuracy of billing to 99.1% or greater for telecom customers.

Service Performance

Reduce the turnaround time for room service to 12 minutes.

Product Quality

Improve the durability of our down jackets that are known to have issues within a month of purchase. Goal: a product designed to last at least 3 years with regular wear.

Work Quality

Improve code delivered to testing. Goal: a 50% reduction in defects per thousand lines of code.

Time to Market

Improve the time to market for new shoe designs to 88 days.

Innovation

Design a delivery drone that is completely silent and requires no cameras for navigation.

Brand Recognition

Improve brand recognition to 13% of target market.

Brand Image

Improve the percentage of customers who view us as a “luxury hotel” to 40%.

Employee Satisfaction

Increase employee satisfaction score to 62%.

Employee Retention

Reduce one year attrition of top performing employees to 8%.

Recruiting

Recruit a development team for the tariff agreement monitoring system.

Compliance

Reduce trans fats to undetectable levels in all products.

Sustainability

Reduce our use of agricultural chemicals by 50%.

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