Four Steps to Profit from Trends
Over time people’s values, preferences and behaviour change. This means they may make different decisions and alternative choices in the way they live, dress, eat, entertain and handle many other issues. If we have a collective shift in behaviour and mentality by a significant amount of people we call it a trend. A trend is a general direction in which something is developing or changing.
For business people and individuals who want to be successful in the future it is very important to take note of changing trends. As business owner wouldn’t you like to know what the product or service preferences of your clients will be in the next month or year? If you know you can really cash in by stocking and promoting the right products.
One danger in trend analysis is to look at all the new opportunities and then decide to exploit as many of those as possible. The opportunities should be assessed in line with your business model and strategy to make sure it will fit your business and that you will be able to deliver the goods.
Be in line with existing trends
A business in line with consumer trends is built on a solid foundation. The reality of life is that most people think the future will be more or less a repetition of the past. As a result they start losing touch with their clients causing a negative impact on business results.
We are not always clear as to the causes of new or shifting trends. You don’t always have to know that. Make sure you know what the impact is on your business.
The four steps to use trends to your advantage
1. Note and observe the key trends affecting your market and business
There are websites and articles on the latest trends that you can consult.
- http://www.faithpopcorn.com/, On the homepage Faith Popcorn lists 17 organizing principles that taken together profile the states of mind and mood of the key consumers.
- http://www.openforum.com/articles/5-trends-that-will-shape-small-business-in-2013/ In the Openforum.com website they discuss trends that may help you to position your business for growth.
- http://www.trendwatching.com/ Trendwatching.com is one of the world’s leading trend firms. Trendwatching.com scans the globe for emerging consumer trends, insights and innovations.
- http://www.psfk.com/future-of-work . Changes to work and the workplace.
You can also do a trend analysis yourself
- Gather a group of people knowledgeable in your business area
- List the topics that would like to explore trends in
- A format that works well is to describe the trends as going from something to something else. E.g. technology going from analogue to digital or purchasing going from shop front to online.
2. Explore the nature of each trend
You must understand the underlying structure and pattern of the trend. Let me give you a few examples.
- Changing consumer needs. People eating less sugar and fatty substances.
- Changing demographics. The neighborhood of your business growing older.
- Change in technology. People prefer online transactions.
- Global factors. Crisis in the banking system of the world.
We have big trends that are called mega-trends with global impact. Within the global trends there are nested smaller trends also called mini trends. See in your mind the picture of the nested Russian dolls. Within each doll there is smaller doll. You must analyse the trends within trends affecting your specific business.
There are also counter trends that you must notice. If you look at the sea water and observe the currents you will see that some currents run in the opposite direction. People work in a high tech modern work environments but would like to escape over a weekend to a hidden retreat with old world elegance of a fireplace, candles and walks in the forest.
3. Know what the relative impact of the trend is going to be
Some will be positive others negative.
Evaluation against your business model
To understand this fully you must evaluate the opportunity/threat against your business model. If you need more information on business models please read my article here: http://www.peterjoubert.com/do-you-need-a-business-model/
A business model answers 4 basic questions:
- Who pays? The consumer, producer, or third parties?
- What for? Goods, services, expertise, assurances of quality or security.
- To whom?
- Why? – The perceived value
Will the trend affect or change any of the above? If it will you must analyse exactly what and how you business model is affected. Is there a need for you to change or alter the way in which you do business? E.g. A need to incorporate online payment as an alternative to conventional payment methods.
Evaluation against your supply chain
You must also check your supply chain. Just to refresh some people’s memories. Supply chain activities transform natural resources and raw materials and components into a finished product that is delivered to the end customer. Raw material and components (or information) is transformed through applicable processes to products or services that are delivered to the customer.
How will the trend impact on your supply chain activities from start to finish? That is from sourcing, making to delivery and feedback. Will the changes brought by the trend pose challenges or reveal new opportunities to you?
4. Develop an action plan to implement the necessary changes
Do you need to modify or change your business model or supply chain activities? After a proper consideration. you must make informed choices and prepare an implementation plan. You must be able to execute the desired changes and also have the competencies and capacity to conduct the business in the new intended way.
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