The completion of diagnoses moves the team to the second phase which is attempting to predict the future by forecasting the market. Hence, these futuristic trends highlight the first analysis area in trying to determine what the future will look like. This helps in understanding how the world will work in the future. This will drive the insight into how consumers will behave, what drives them, and what they will fear. This will unlock the understanding of what the consumer will want to purchase in the future. This guides the organization’s product and how it can morph to match their desires. These insights can be combined with understanding the market trends as to where it has been, where it will be tomorrow, and how to track the position of the company in the future.
The second analysis starts by using Michael Porter’s 5 Forces Analysis. Starting with the threat of new entrants and how easy it would be to enter the market place. Second is the analysis of the threat of substitute products. How easy would it be for a competitor to replicate the offering or product? The third is the bargaining power of buyers. How easily could consumers drive prices down? Fourth is the bargaining power of suppliers. How much leverage do your suppliers have in increasing their prices? Lastly evaluated is the competitive rivalry and attempting to understand the competition at a micro-level.
Now that the organization’s competitors are analyzed at a micro-level, the key highlights will begin to self-identify. It will be easier to understand what their strategy is and whether they are moving in the same future direction that other competitors are moving. Other highlights include their positioning in the market and how others compare against them. The end result should be an understanding of what makes the competitor special and whether they will have that same unique specialness after making long-term bets on the future.
The final analysis section for forecasting is the understanding of the gaps in the market. If the competition moves in a new direction, then will your organization be able to match their offering head to head or will you be able to counter with a new-found weak point? Following the best practices of competitors will make an organization average and the typical market will move in one direction and ignore another sector. Military tactics and business acumen both point that a war of attrition is started by two opposing forces matching their strengths against one another, while the quickest path to victory is by attacking weaknesses. If a competitor has shifted its strategy, then they have exposed new gaps in the market that can be exploited.
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