Market analytics

DPR&Co market analytics image

Why this is important

The world is littered with the carcasses of firms that were ignorant to, or misjudged, emerging market trends in their sector. Not seeing these trends emerging is the biggest single factor in organisations becoming irrelevant or uncompetitive.

DPR&Co’s approach to the analysis of a market sector or vertical ensures that we are able to identify emerging trends before they become visible to most market participants.

What we’re looking to assess

The metrics that underpin any important strategy include:

  • Economics of demand and supply
  • Supply chain economics
  • Market shifts
  • Changes in market capacity
  • Shifts enabled through vertical integration
  • Increases in efficiency (largely technology-driven)
  • Financial issues
  • Skills (employment) issues

Significant shifts in any of these factors (it’s almost never one) can shed light on an opportunity or a threat.

The effect of a significant advance in technology, for example, is obvious, but a key competitor engaged in vertical integration and transformed logistics as a means of stripping out cost can be just as problematic but more difficult to find.

See the case study of Varidesk here

Approach

The McKinsey methodology is called SCP (Structure, Conduct and Performance) and bases its enquiry on how the market in question is responding to external shocks as well as relative participant performance. We like it for its simplicity and clarity.

For smaller, local firms, many of the inputs required for analysis at this level can be gained from interviews with market participants or through industry journals, websites and annual reports. For larger firms, however, the sheer volume of inputs and the complexity involved in triangulating what is normally a massive volume of data points requires the skills of a trained analyst such as you might find in a strategy consultancy such as McKinsey.

The alternative (the one that we use) is to contract the former staff members of the major consultancies to conduct this analysis. The benefits to this approach are:

  • You can use a consultant who specialises in your industry sector
  • It’s going to cost a fraction of what it would to hire a consultant
  • You have more control of the way the project rolls out
  • Because the contractor is working within a time/cost envelope, you’ll complete the analytical part of your strategy within a defined timeframe – usually 4-6 weeks for larger project.

The data inputs we employ may include:

  • Standing research (ABS, IBIS, Statista etc)
  • White papers and industry journals
  • Annual reports
  • Market reports
  • Stakeholder and content-matter expert interviews
  • Editorial content
  • Third party research
  • Direct enquiry
  • Assumptions drawn through the triangulation of multiple datapoints

Deliverable

A reliable overview of the market in its current form including:

  • Market economics and trends such as input costs, margins, supply chain and logistics costs, customer engagement costs, marketing costs etc for your orgainsation and its competitors
  • Relative competitor performance, SOV, market rankings, brand positioning and current and emerging brand clear space
  • Growth opportunities – present and future
  • Technology, competitor and macro-economic threats

This data is then used to develop a range of scenarios and hypotheses for consideration by your leadership and to provide a basis for market research and contingency planning. Naturally, any assumptions used to develop these scenarios are noted, explained and referenced.

While analytics can provide a very solid picture of the present state and clues to shifts in market dynamics, this work also underpins the development of a range of hypotheses related to the market scenarios that can then inform an exploration of consumer or stakeholder sentiment.

The data also provides the foundation for the business case we assist our clients to develop prior to any subsequent action as well as providing a suite of ‘control’ metrics to measure future activities against.