Market Intelligence as a Key Success Factor in an Economic Downturn

This paper presents a three-phase model for companies to adapt to a recession and ties in Market Intelligence efforts to the process by presenting concrete case examples of what types of MI output companies could consider to help tackle a downturn.

Especially strategic planning and the marketing and sales functions face challenges during a recession, as strategic decisions may have to be made very quickly on fundamental opportunities that may drive earnings performance for years to come. Market and competitive intelligence plays a vital role in the process.

In the wake of the financial crisis of end-2008 and the subsequent global recession, companies, public organizations and entire industries are looking for intelligent ways of surviving the shake-out.

 

In the wake of the financial crisis of end-2008 and the subsequent global recession, companies,
public organizations and entire industries are looking for intelligent ways of surviving the
shake-out. It is justified to say that intelligence plays a more important role in the process than
ever before:

  • Intelligence now needs to guide strategy and not the other way around.
  • During the next years many industries may be reshaped.
  • Many companies will need to reassess their strategies and find new ways to cope with uncertainty.

Increasingly many topics need to be monitored in the business environment for emerging opportunities: new markets, new products, new partners, new customer segments, new risks, new competitive scenarios. 

There are two features of the current downturn that make it different from past recessions. First, events take place extremely quickly. The financial markets froze up all of the sudden, so that companies relying on short-term credit were not able to anticipate the changing conditions in the financial markets. The mass of consumers turned from being happily spending to extremely cautious so fast that companies were caught unprepared. Macroeconomic indicators, that are just now becoming known, show sharp declines in output, spending and investments.

The changes have been so sudden, that many trusted institutions that have delivered economic forecasts for decades have not been able to provide reliable predictions and find it difficult to keep up to pace.

The second unique feature of the current downturn is its truly global nature. Rarely, if ever, has the world economy experienced such a widespread crisis, taking place on all continents simultaneously. As countries are trading more than ever before and have become interconnected through various institutions, the negative economic developments have quickly spread from one country to the next. Although some countries have experienced a more severe housing market bubble or financial crisis than others, every country in the world is affected no market is immune.

Triggered by a housing market bubble and very lax money market regulation, the world economy experienced a severe financial crisis and economic decline in 2008.

Case Cisco – Customer Intelligence through Econometric Models
Cisco enables people to make powerful connections-whether in business, education, philanthropy, or creativity. Cisco hardware, software, and service offerings are used to create the Internet solutions that make networks possible-providing easy access to information anywhere, at any time.

Case Fujitsu Services – Cost Efficiency through Outsourcing
Fujitsu Services is the European IT services arm of Japanese-headquartered Fujitsu Group, the third largest IT services company in the world. In 2006, the Market Intelligence Manager of the company found herself leading an operation that did quite a lot of work, but didn’t necessarily deliver a lot of value to the company. It was clear that the problem was not getting more information – or even doing a great deal more analysis – but making sure that our insight was easily available to the right people at the right time.

Case Outotec – Scenario work and Early Warning and Opportunity System as part of Strategic Planning
Outotec, a leading global provider of process solutions, technologies and services for the mining and metallurgical industries, wanted to integrate a scenario project with their management training program in order to improve strategic planning at times of uncertainty.

Case Shell – Analyzing the Future Competitive Landscape
Shell is a global group of energy and petrochemical companies, active in more than 130 countries and territories and employs 108,000 people worldwide. Shell is committed to ensuring that the world’s oil and gas will continue to be extracted and delivered both profitably and in environmentally and socially responsible ways. Shell’s strategy and priorities for the future are “more upstream and profitable downstream”, focusing on delivery and growth, leveraging its existing portfolio.

Case Wärtsilä – Targeted Market Intelligence for Concrete Results
Wärtsilä is the leading provider of marine solutions and flexible power plants for a modern energy infrastructure. This is done with the broadest portfolio and best services in the industry.

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