1.03 – How to Properly Research Your Industry
Understanding your industry inside and out is crucial for developing effective business strategies. Yes, it’s a lot of work, but it will pay off many times over.
Today, it’s much easier to research an industry thanks to the abundance of online sources. However, not everything posted online is necessarily true or credible. Anyone can create a website and claim expertise, so it’s essential to verify your sources. Here are some tips to ensure credibility:
- Evaluate Expertise: Determine if the site or author is a recognized expert in the field.
- Consult Industry Peers: Ask people familiar with the industry if they’ve heard of the site or author.
- Cross-Reference Information: Compare the information with multiple sources. Consistency across sources usually indicates reliability, but be cautious of widely spread rumours.
When presenting information to potential lenders or funders, credit the original source with a full citation including the title, author, source, date, and page. This is especially important for web sources, as URLs alone are often insufficient.
Checking Out the Status of Your Industry
As you begin your research, you may feel overwhelmed by data. Here are some key questions to help you focus on the critical aspects of your industry:
- Is the industry growing? Measure growth by employees, revenues, units produced, and new companies.
- Who are the major competitors? Understand which companies dominate, their strategies, and how your business differentiates from them.
- Where are the opportunities? Identify areas where new products or innovative strategies can create opportunities.
- What are the trends and patterns of change? Look at past and future trends to predict industry developments.
- What is the status of new technology and R&D spending? Assess how quickly the industry adopts new technology and its importance.
- Are there young and successful companies? The presence of new companies indicates a dynamic industry, while their absence suggests maturity.
- Are there any threats to the industry? Identify potential threats that could make parts of the industry obsolete.
- What are the typical gross profit margins? Gross margins indicate how much room you have for error in pricing and production costs.
Competitive Intelligence: Checking Out the Competition
Finding information about competitors can be challenging, especially with private companies. Here’s what to look for:
- Management style
- Market strategies, both current and past
- Unique features and benefits of products and services
- Pricing strategy
- Customer mix
- Promotional mix
Strategies for Gathering Competitive Intelligence
- Pound the Pavement: Visit competitors’ physical locations and observe. What types of customers frequent their sites? What do they buy?
- Buy Competitors’ Products: Understand how competitors treat customers and the quality of their products.
- Rev Up the Search Engines: Use search engines to gather information about competitors. Look beyond Google to sites like Bing, Yahoo!, DuckDuckGo, and Ask.
- Check Social Media: Monitor competitors’ activities on social media platforms like Facebook, Pinterest, Instagram, TikTok, and Twitter. Check review sites to see customer feedback.
Check Information on Public Companies
Public companies are often the most established and can serve as benchmarks for best practices. Look for detailed profiles and reports on companies through reliable business information services and government databases.
Use Online Media
Explore databases and websites that provide insights into competitive intelligence and industry-specific information.
Look for Data at Government Websites
Government sites offer free, detailed information on economic news, export information, legislative trends, and more. These resources are invaluable for comprehensive industry analysis.
Go Off-Line for More Research
- Industry Trade Associations: Join trade associations to access industry journals and insider information.
- Network, Network, Network: Engage with industry professionals to get current, firsthand information that may not be available online.
By leveraging both online and offline resources, you can build a comprehensive understanding of your industry, ensuring that your business strategies are well-informed and poised for success.
