Introduction: Market Uncertainty is Challenging Businesses
In times of market change, sometimes the biggest blocker for activity is uncertainty. This could take the form of a market behaving unpredictably and old models not working or things appearing stuck in place leaving you unsure when things will start moving again.
In the past few months, we’ve found that our clients are encountering new challenges due to uncertainty in the future of their markets. From unexpected project losses, increased pricing pressures, and intensified competition, we’re increasingly finding a lack of confidence holding organisations back.
If you know orders will recover next year, you can weather the storm and prepare for the return. However, if you know the slump will last five years, or that the market has fundamentally shifted, you may act differently, investing in new capabilities or looking at inorganic growth and consolidation to increase revenue.
Looking into these three areas will help you unlock clarity and allow you to make plans with confidence about the future:
3 Keys to Unlock Clarity
Customers
Understanding the wider context behind customers’ slowed or uneven ordering will help you predict when things will return, settle or if this is a new normal to adapt to.
In a turbulent market, business priorities change and the priorities of your stakeholders can also be shaken up. Budgets can be repurposed and strategic initiatives reprioritised overnight – do you still know what their most pressing issue is today?
Update your understanding to the latest customer needs and preferred buying approach to make sure you are developing and delivering products or services which truly meet their needs:
- Underlying need: What has happened to customers’ need for your product or service? Has it dropped off temporarily or disappeared altogether? What are their stock levels like?
- Product & service needs: What are your customers & prospects buying now? What are their priorities?
- Thoughts on your current offer: What are views of your offer now? Will it stand up in the future?
Market Trends
Looking at the broader market can help you understand the variance between your market and the wider economy. You may be experiencing a downturn at the same time as geopolitical factors, but is this causation or correlation? Is it the easy explanation that avoids facing up to realities in your individual market?
Understanding supply chains could provide insight around customer behaviour. If their supply of microchips has slowed, this may be causing a slowdown in their production lines.
Looking at adjacent markets can also give you clues around indirect substitution. For example if the eating out market is falling off but meal kits are on the rise, this could open an exciting new opportunity for a restaurant chain.
Understanding the forces at play in your customer markets can give you broader context and help forecast the next batch of changes:
- Macro factors: What are the regulations, geopolitical pressures, global economic markets, sustainability factors that influence your market? How do they align with periods of boom and bust? How are these evolving in future?
- Segmentation: Is your segmentation still relevant? Are there underlying changes in the makeup of the market which you need to react to?
- Supply chain impacts: What are the upwards & downwards supply chain conditions? How have these changed recently and what is expected going forward?
- Adjacent markets: What is the growth rate of adjacent markets? How healthy is competition in these markets, what is the rate of innovation?
Competitors
Your rivals can be your best resource when markets are behaving unpredictably. Is this a wider market situation, or is it specific to your customers, geographic focus or section of the market? Is there something they have done to unlock stability that you can learn from?
How do you position versus the competition – are there areas you’re performing poorly? In a tight market, it can be easy to lose market share. Get a clear view of what competitors are doing and ask yourself if you can match them or beat them:
- Competitor experience of the market: Are competitors seeing the same changes / challenges as you? What are they planning to do about them?
- Risk of disruption / new business models: Are there any disruptors in your market? How successful are they? What level of threat are they to your business?
Planning your response in uncertain times
Once you have this information, you can start to plan your response. You may want to create some scenarios to imagine different possible futures to support your thinking, or create some possible forecasts to give numbers to plan against.
You may want to think about some of these elements:
- Pricing – Would a new tiering approach appeal to a wider audience?
- Go To Market – Have customer views on purchasing preferences changed? Do you need to reconsider your partnership or direct sales approaches?
- Proposition Development – Are there some low hanging opportunities to bring your proposition up to scratch, or can you take advantage to develop a new proposition to meet an emerging need
- Segmentation & Targeting – Has the customer landscape changed enough that you need to tailor approaches more finely?
At White Space Strategy we have developed a Market Clarity programme which addresses these three areas and synthesises findings into a snapshot of the current market position & future direction to help you formulate effective responses.
We specialise in understanding complex markets and providing actionable insights. Our recommendations are evidence-based and delivered promptly to facilitate quick action to market changes.
If you are facing similar challenges, get in touch.