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Why You Should Do An Industry Research

Why Industry Research Matters?

Many times, promoters of new ventures ignore the trends that are happening in the industry on a global and national scale. They fall so much in love with their business idea, that they get short-sighted and see only the opportunity at hand. This can lead to very sad consequences. Imagine spending millions on a venture that gets disrupted by new technology or a shift in customer preference, and the venture goes out of business. If only the promoter had the common sense, to look up to the industry and see a Tsunami coming, he could have spent that millions of investment, his time, and effort on something that had a better prospect. 

This is applicable to those managing businesses at the moment. Before embarking on major re-investments or expansions, you need to study the future of your industry. If it has disruptions coming up, better shift that investment and effort, to something that has better prospects.

Doing research on your industry is not all about preventing a disaster from happening. It can also be a good means to identify new opportunities.

5 Reasons Why You Should Do An Industry Research

Industry research helps in changing ahead of your competitors.

It is common sense that you need to do things your competitors are not doing to stay ahead of them. Sometimes, these new measures or initiatives may not be things that can be done the next day. Especially if it involves substantial investment into say production, infrastructure or new training and grooming of staff etc.
So if your business is able to find a new disruption on the horizon, and you take the time in advance to invest and be prepared for it. Then when it happens, your business will be ready for it, while your competitors will need months to be in your position. By this time, you can capture their market share.
When consulting new ventures, we at AASC, ensure we do Industry trend studies in our Market Feasibility Studies, to ensure that such opportunities are not missed. Also when providing management consulting services to existing businesses, we do a process called Market Audit, where apart from studying the market, competitors and the customers of the client, we also study the developments in the industry to provide apt advice for the present and future.

Industry research helps in becoming a market leader

To know where the market leads and by acting on the clue, means naturally becoming the pioneer and the market leader. 

Industry research helps in better branding

Becoming a market leader, a pioneer or a thought leader creates a strong brand image among the target customer segments. It also makes the competitors identify your business as an industry leader.

Industry research helps in better understanding customers

Industry trends are usually triggered by customer changes or technological changes. Or industry changes triggered by customer preference changes, triggered by technological changes. Understanding these changes in customer segments or preference, helps in better communication, promotion, advertising, implementing internal changes and host of other important preparations. 

AASC assists businesses in these changes by studying these trends, and analysing its impact on the business and making strategic and tactical recommendations. And assisting your business to implement and manage the implementation of the recommendations.

Industry research helps in the diversification 

Industry research reveals the possible changes that can result from factors affecting the industry from technology, politics, climate, laws and customer preference changes. Every change is an opportunity. It’s about a river changing its course, not drying up. So knowing the industry trends means identifying new opportunities and diversifying into those areas. In certain cases, such opportunities can be beyond the capacity of your business (technological, knowhow, resource or capital constraints). In such cases, the diversification can be to a totally different industry. 

AASC is a Business Strategy & Management Consulting firm that serves Promoters to study, plan and set up new ventures, and Entrepreneurs to manage or grow their business, in a professional manner. 

To know more about AASC services for new ventures, please visit https://aascglobal.com/consulting-for-new-ventures-and-startups/

To know more about AASC services for businesses, please visit https://aascglobal.com/consulting-for-business-growth-and-expansion/

Call: +91-7558-900-800 or email info@aascglobal.com

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Next Retail Disruption: Brands Will Facilitate Sale of Used Products & Renting Them

We are all familiar with people buying second-hand cars, mobiles, books, etc. usually these are sold by third parties – not the companies themselves.

A major shopping and lifestyle cultural shift will happen. It can disrupt the way we shop.

Possibly this could be the next major disruption after online shopping came into existence.

So What Is Driving This Disruption?

New business models are disrupting the old models, as the customer preferences are changing. Generation Z and Millennials, who are inclined towards sustainability, experiencing life, and less inclined towards amassing assets, are embracing the idea of buying quality used products and selling them back (when not needed, instead of keeping them forever) or renting used products.

The success of Uber, Airbnb, Patagonia, and many others are good examples. This trend is soon to catch up, in all other industries, including furniture and even cloths & accessories. Buying used products or renting dresses etc are not seen with interest by customers who are Gen X or those earlier. But with Gen Z and Millennials (the growing customer segment) are very much open to using rented or used products. This is going to be a cultural shift in the shopping.

But the disruption is when, the brands themselves buy their unused products from customers and resell them in the market as seconds or on rent, by ensuring quality and certifying it. This is the major disruption to happen across the industry.

A McKinsey report states that the best data out there shows that 33% of the Gen Z and Millennials did some type of resale purchase or rental in 12 months. Now that’s a huge business opportunity.

Participation in that market is growing by 40% year over year. That’s fast growth.

But will brands offer to take back their products and reselling them, affect the sales of their new products (cannibalization, as it’s called) or affect cashflows as they buyback?

Not necessarily, if properly planned.

Companies need not buyback. Instead, they can offer gift coupons in return. This means the customer will use the coupon to buy something new as well. This is a win-win for both the buyer and the seller. Besides, it is a good opportunity to be connected with customers always.

As for cannibalization, it need not be so. The fact that the products can be given back to sellers after using, reduces the decision barrier for customers to try new things. The worry of “will it be a waste”, doesn’t bother them anymore. This could create an explosion of experimental buying from the customers. Thereby increasing sales and profitability.

So how does this affect the present business models of businesses?

Be proactive: Explore how you can enter this space. What can be bought back and resold? What can be rented?

Customer Segment:
Which customer segment should be attracted to this? Can a present “non-customer segment” be targeted? How to customize the business and its shopping experience to attract them? Will it affect the sales from the existing customer segment?

Product Quality Review: If a product has to be sold and resold, it has to be of good quality. Do your products have it? How many cycles will it go? What can be done to improve it? Businesses have to build products that are more durable and sustainable – so that they can have a long life. This can be a shift from the present “use and throw” products to more sustainable and durable products. This can save the environment.

Process Change: Study what process changes need to be implemented? What new activities need to be undertaken? Does it need resources and infrastructure? Businesses have to have a team or department, to accept the customer goods, quality checks them, make repairs or cleaning, repackaging it, new showrooms for it or dedicated places in existing showrooms, branding and marketing it, etc.

Re-Branding: The new service and its impact on the public should be structured to ensure brand images are not destroyed overnight. It has to be planned well to sync with the Gen Z and millennials who will be its main customers. Strong brands will have a boost, as more customers will opt for branded products as it available even on a rent basis.

New Channels: Businesses and entrepreneurs have to be ready with the channels for the new product line- the resale buying and selling.

Embrace Technology: Technology will also have to be involved to manage its e-commerce sale.

In short, for customers who are premium brand lovers who can’t afford them, good times are ahead.

For entrepreneurs, who are struggling to get a higher market share, this is a good opportunity to disrupt and penetrate the market.

Study -> Structure -> Disrupt ??

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Future of Food Industry & How Kerala Can Benefit?

What are the major challenges that the Food & Beverage Industry players will face in the future?

Now is perhaps the most challenging time for food and beverage manufacturers. The rising cost of materials and manpower, customer experience sharing at a global scale, shrinking margins due to tough competition, the constant shift in consumer tastes, fluctuations in agricultural outputs- has all contributed to heavy challenges not just to F&B manufacturers in Kerala, but national and international players.

What are the major developments that the Food & Beverage Industry players will face in the future?

But these challenges are the opportunity for the real visionary businesses to beat competition, excel, and gain market shares. One of the important tools to be used by these visionary businesses will be technology, in its various forms, from sourcing, manufacturing, supply chain management, branding to end-customer experience.

According to a white paper by GE released at the “Gulfood Manufacturing 2018”, these technological changes can range from Industrial Internet of Things (IIoT), connected industrial units,  proactive repair of machinery based on real data, smart asset management, low-cost effective sensors, usage of the “Cloud”, big data, artificial intelligence- and many more technologies that will help reduce drastically wastage of raw materials, damages to finished or semi-finished products, prevent overproduction or underproduction, reduce cost and increase margins, besides target marketing to target customers.

According to GE, their customers (business and manufacturers who opted for their technology) stated operational efficiencies such as up to 20% reduction in unplanned downtimes, 20% inventory reduction, more than 20% recovered capacity, up to 40% EH&S incident reduction, up to 20% reduction in maintenance, up to 10% inventory cost reduction, 8% decrease in field service cost, 9% increase in equipment uptime, 13% decrease in average time to repair and so on.

How does Kerala or Kerala-based Entrepreneurs Benefit?

There are several unconventional opportunities for adventurous daring forward-looking entrepreneurs in Kerala. Like,

Build and operate “modern” technology-oriented farms: Global consumer packaged foods manufacturers are facing the security of agricultural inputs. To overcome this, they are purchasing farmlands in other countries, to overcome any shortage of agricultural produce. Currently, they are looking at China and Africa. This is an opportunity for modern agro-entrepreneurs who can own, manage and bring agro-products of global standards. To be cost-effective and quality assured, these farms should be capital intensive than manpower intensive. It should use all the latest technologies to ensure maximum output, with minimal harmful chemical usage, and that too at a minimal cost. This will bring a new breath of life to the fertile lands of Kerala. This is an opportunity that Kerala-based entrepreneurs can do in other states of India as well, where farmland availability will not be an issue.

Build Consumer Brands to Sell: Global consumer brands face two types of hard competition that affect their survival and profitability. One is the usual competition they face from other global players. Other is competition faced from the local consumer brands (who have a better local knowledge about the local customers). As part of their inorganic growth strategy, the global players have a tendency to buy local brands. This is a good opportunity for new-age young entrepreneurs who wish to sell off their brand at a handsome price and start a new venture. This is especially ideal, when the local brands are suffering from the tough competition (despite having a good market share), and going ahead is not that easy. It’s a win-win situation for the buyer and the seller. So the opportunity is to build a great brand that you would sell at a high price when the competition gets really tough.

Technology Ventures: There exists the opportunity for specialized technology firms that will provide technology solutions (hardware, software, or platforms) to the F&B sectors. The opportunity is global, as these ventures can sell their products or services in the global market. This is the biggest opportunity for Kerala, as thousands of specialized technology ventures can be market players. And Kerala’s IT parks and IT professional pool can be a good resource. But the key is to specialize, as only when there is specialization they can invest in research, R&D and know the market needs better.