How Do You Effectively Deal With Data Overload in a Global Economy?
Posted in Market Research & Market Intelligence on February 8th, 2009 by Alan S. Michaels – Be the first to comment
Exploring Ways to Focus on Strategically Relevant Information
Corporate planners, corporate marketing professionals, and business executives face a massive challenge in understanding how all of their businesses, and each of their products and services, best meet the needs of their customers, while simultaneously keeping an eye on competitors, current and potential business partners and vendors - each of whom may be located anywhere in the world.
Most companies, including Global 1000 Firms, do not have the time, resources, or expertise to develop their own private view of the global economy. Most companies make do with ad-hoc search engine results and use industry vendors that basically provide access to publicly available 10K-type data. Most of these vendors also group companies together into industry sectors and provide general commentary about those sectors, often leaving out the term “sector.” As a result, the term “industry” has become very misunderstood. Decision makers who need actionable data at the industry level have been forced to pay consulting firms high fees for major studies, or forgo industry data altogether.
For these decision makers, understanding the word “industry” is vital because an “industry analysis” is the starting point for understanding any business. Unfortunately, around the water cooler, the word industry can be used freely to mean most anything. For business executives and professional planners, a more crisp understanding is required to understand what constitutes the right level at which to perform an industry analysis.
Challenge yourself: Which of the following is, in fact, an industry? Financial Services? Banking? Commercial Banking? Cash Management? Wholesale Funds Transfer Services?
The answer: Wholesale Funds Transfer Services is the only real industry included in the group; the rest are all different layers of arbitrary industry sectors and sub-sectors. A true “industry” is made up of one or more products (or services) sold to one or more external customers which can be considered direct substitutes and which require similar activities to provide. Other industry examples include: frozen pizza manufacturing; mainframe computer manufacturing; commercial automobile insurance; graduate business school MBA-degree program services; discount brokerage services; and six sigma training services.
As illustrated, a primary reason that decision makers are not planning at the right level is largely due to a lack of easily accessible information. Traditionally speaking, vendors have not provided a global industry framework with a consistent format and the right content - at a strategically relevant industry level. While some vendors try to leverage SIC and NAICS government-developed segmentation schemes for industries, they generally do not incorporate information on a global level; they are not kept current; they consist of rigid hierarchical schemes; and they are poorly defined in software, services, and in most industries with non-physical products.
Fortunately, better alternatives are being developed that allow business executives to obtain and leverage more accurate, relevant industry information. The Global Industry Dashboard [TM], for example, is a web service with a wide array of reports and user tools that provides a taxonomy of properly defined industries that cover the global economy. It is comprised of a single framework that is built from the bottom up by using industry information as the basic building block foundation, and provides information on more than 10,000 industries covering more than 95% of the global economy. There are many benefits to giving this new approach to global marketing research, a few of which I’ll walk you through now.
- One Global Holistic Industry Framework: By using a single global industry framework, you get a common language with common definitions, a common methodology, and the ability to eliminate overlapping definitions that lead to double counting and lack of market segmentation clarity.
- The Ability to Understand Industries Using Strategically Relevant Information: Once industries are defined at the correct level, it is then logical to capture and develop strategically relevant information. But what information do you need for a specific industry analysis? Within a few keystrokes, the Global Industry Dashboard provides users with access to key information, along the lines of a Michael E. Porter Five Forces industry analysis, including: Industry Revenue; Attractiveness; Competitors; Product Varieties; Customer Types; Channel Segments; Industry, Economic, Technology and Geopolitical Trends; Uncertainties; Industry Success Factors; Buyer Decision Makers; Purchase Criteria; cross-references to SIC, NAICS and United Nations-based ISIC codes; and more.
- Superior Industry and Market Segmentation: Using a global industry framework provides a much better opportunity to target the right industries, customer segments, product segments, channels, buyer decision makers, and vendors. Industries can also be grouped in any combination to cover the portion of the economy particularly relevant to you, while each industry maintains its basic industry information.
- Competitor Intelligence and Strategic Benchmarking: A powerful byproduct of capturing and developing information at a strategically relevant industry level is that companies can then be defined much more crisply in terms of the industries in which they compete. For example, IBM is defined by many information vendors as an “IT Company,” - and some may even add that IBM is also in “Business Consulting, Hardware, Software and Services.” In fact, IBM directly competes in hundreds of strategically relevant industries, including billions of dollars in revenue from financing IT equipment.
- Targeting Merger & Acquisition Targets: Gives you the ability to target firms based on the specific industries in which they compete to achieve better M&A planning.
- Joint Venture Candidates & Business Partner Program Planning: Clearer, more relevant information breeds better partners.
As corporate planners, corporate marketing professionals, and business executives, we know that discovering, learning and leveraging accurate global information can be one of our greatest competitive and strategic assets. By proactively managing the information for accuracy and relevance for making decisions, we have the chance to beat the competition and win big.