Market Intelligence is the process of gathering and analysing information relevant to a company’s supply markets specifically to support accurate and confident decision making in the procurement process. Sourcing consultants have a strong presence worldwide. They ensure good communication and engagement, delivering faster time-to-value and a higher return on investment for clients spread broadly across diffuse locations and industries. Market intelligence should instead be seen as a branch of market research. It involves using several sources of information to build a bird’s eye view of a company’s current market, customers, competition, problems, growth potential, and potential for additional products and services. Potential sources of raw data include sales logs, social media, surveys, studies, and more.
How Can You Design an Effective Competitive Intelligence Process for Your Whole Organization?
Start with your top five direct competitors both on new and existing products. In addition to your direct competitors, you should identify your indirect competitors, your aspirational competitors, and your perceived competitors. Your indirect competitors are key players within your industry but likely don’t compete with you for customers. Your aspirational competitors are those leading companies within your industry that you don’t necessarily compete with, but you can pull inspiration from to benefit your own business. Finally, your perceived competitors are those companies that may come up during the sales discovery process, but that you don’t compete with for business.
Can Competitive Analysis of any Product be Cross-market to Existing Customers?
Creating a competitor analysis can be done in a couple of different ways. One way is to do a benchmark or baseline analysis, which will allow you to compile your data and create a competitor profile. Competitor profiles are highly useful to ensure that your findings on each competitor are being kept within one centralized document. Sourcing agents serve an equally important approach to competitor analysis is to analyse competitive intelligence on an ongoing basis, in real-time. It’s beneficial to create profiles on your competitors, but it’s even more valuable to continue to track your competitors.
How Procurement Can Leverage Market Intelligence?
Minimizing risk on investment decisions
Risk is everywhere in the business world, but it is possible to avoid or mitigate risk in procurement with the strategic use of category intelligence. Preparation and knowing which questions to ask up-front can help you evade or mitigate risks, such as financially unstable vendors; upstream supply chain interruptions; disruptions from natural disasters or political unease; fluctuations in commodity prices; or regulatory change implications.
Save Money and Time
Procurement departments have many goals these days, but cost savings and/or cost avoidance remain top of the list for most organizations. Market and category intelligence can help in several ways, including providing benchmark pricing so you can be sure that what you’re paying or being quoted is in line with average market prices. Furthermore, it uncovers substitute or alternative products or services that you may be able to source at lower costs and identify related goods. This helps you to bundle goods or services from fewer suppliers, leveraging larger spend to negotiate better pricing. Sourcing consultants can drastically reduce your research time by providing condensed and concise data and information. This intelligence can help you in every stage of the purchasing process, from assessing an opportunity through negotiations and on to contract and vendor management – overall increasing your speed to market.
Good market intelligence data is essential to know what the market price is for any given item and to identify true opportunities. Analytics alone can only identify spend and patterns, performance and patterns, and whether discrepancies within the patterns are present. Adding market intelligence to the mix ensures businesses know when spend provides a cost savings opportunity. Every raw material has a commodity index companies can use to build their raw cost. Energy rates are also available. If the should-cost model is less than what an organization is paying, there is a good savings opportunity. If it is about equal, the business should stay the course.
If you want to reap the benefits of marketing intelligence – faster decisions, better decisions, reduced risk, innovative marketing – then it’s incumbent on you to get started today. A key attribute for any world-class procurement practice is to take guidance from sourcing agents with their user-friendly set of policies and procedures as well as the controls to monitor them. This includes things like your customer lists, customer feedback (surveys, polls, product reviews, etc.) internet research, industry association, government information, sales and revenue data, reports from software, and other tools you use during the business, clients, distributors, manufacturers, etc. Embrace it wholeheartedly, and you’ll leave your competitors in the dust.