How We Define Market Intelligence
The wide range of challenges companies face—affecting which customers they target; how they position their products; how, when, and to whom they sell; and how their local activities operate regarding local laws and regulations—makes market intelligence critical to the success of any business.
Market intelligence is often defined as any information about a market. Companies typically define “market” as the environment for selling their products in a particular geography. Thus, they seek out information around target customer segments, competitors, regulation, and other factors that affect the market for their product. An important part of gathering market intelligence, whether for a new business or a more established company, is evaluating how the company’s activities and goals fit into the overall context of the country or geographic market where the company sells its products or services.
Before we go in-depth into what aspects of market intelligence you should pay attention to, how to gather this intelligence, and what to do with the information in this article, let’s consider, what is the purpose of market intelligence?
Goal of Market Intelligence
Whether you are the new owner of a small business or building your annual strategic plan for a multinational corporation, every business needs to gather market intelligence to inform their business decisions. In addition to information about your target market, such as around your addressable market size, competitors, substitute products, and purchasing power, businesses also require information about how these factors interact with the geographic market—the country or region where they are operating.
You can then use this information to evaluate any opportunities for your business in that market by taking a broader perspective that considers not just the specific dynamics of your industry and customers but also the overall country context in which your business, customers, and competitors all operate. As a result, we recommend taking a broader definition of market intelligence that includes not only insights about the market in which your business operates, but also the country context in which it and its customers, partners, and competitors exist. This geographic market intelligence is particularly important in the context of emerging markets, where operating conditions can completely disrupt the dynamics within a particular category or the overall opportunities and risks for businesses in a way that has little to do with specific industry dynamics.
While companies would normally evaluate a market’s operating environment when they are considering countries to enter or significant new investments, market intelligence done right is an ongoing effort to understand the operating environment in all countries that your company sells into. Market intelligence can help you maintain a competitive advantage while mitigating risk to your business and supply chains, and helping you understand your customers.
Successful businesses are constantly evaluating market conditions to help them make decisions about how to position their product or services. Even a market like the UK, which would normally be considered safe and stable, has gone through considerable political change, currency volatility, economic unpredictability, and substantial regulatory changes since the Brexit referendum in 2016. This is even more true for emerging markets, which can often face rapid and unpredictable change over the course of weeks or months.
Tips to Gather Effective Geographic Market Intelligence
Monitoring the external context for your business in the countries where you operate requires precision in what matters for the business and consistency of process. It’s not necessary to cover everything, but it’s important to start by thinking expansively about what could affect your business. Some suggestions on how to get this right:
Narrow your focus
Narrow down the elements of the operating environment that truly matter for your business, partners, and customers and focus on monitoring those. If your business is not heavily regulated, for instance, there is no need to create a process for monitoring complex regulatory and policy activities.
Use leading—not lagging—indicators
Many companies believe that their sales and performance in the market are sufficient to get a sense of what to expect. However, sales are a lagging indicator. In fast-changing markets, yesterday’s performance could be completely unrepresentative of tomorrow’s performance. This has been clearly demonstrated by the COVID-19 pandemic, but even in non-pandemic times, many markets have dynamics that require monitoring of leading indicators of customer confidence, earning power, and overall dynamics to stay one step ahead of the operating environment.
Reduce bias in analysis
Many companies have talented local teams and partners who have strong opinions about the local environment. These are invaluable in understanding local dynamics but can suffer from the challenge of being too local. Instead, an ideal perspective combines local insight with an unbiased, cross-disciplinary perspective on the market that also takes into account global factors (e.g., export demand from markets such as China, energy prices, and others). This ensures that the business can take a big step back to look at the operating environment in a broader perspective, over longer time horizons, and within its appropriate global context.
How FrontierView Can Help
FrontierView specializes in market intelligence built for business. We uniquely combine world-class strategic market intelligence and analyst advisory services through data, insights, and analytical tools, to power your market monitoring, strategic planning, and international growth. We can support you with best-in-class market intelligence that offers a global perspective, bringing economics, politics, and policy analysis to your boardroom. Start your free trial today to get started.