For business owners, the ability to identify industry trends is vital for trying to anticipate market shifts, foresee forces that are and will be shaping the business landscape today and in the future, as well as to key in on emerging opportunities that allow the capture of new markets. Of course, most understand and assume that their ability to actually sculpt or influence which of the future forces will be in play is minimal—especially when these forces of change are often shadowed in nuance, in slight market or demographic deviations, and unfold in a continuous stream of innovation, related or unrelated. However, by closely monitoring and assessing the changes taking place in a rapidly moving market, it is possible to spot the rise of potential and emerging trends and react to or, better yet, anticipate market direction and be at the ready to take advantage when the market swings in that direction.
Although reacting to shifts in the market can be an effective business strategy, it comes with its own unique set of risks. First, reacting to a market shift means the shift has already taken place and most likely others have flooded in to take advantage and establish a competitive position. Second, depending on the direction of the market shift, the resources and capital to act quickly may not be in place or on hand to catch up to and challenge the early entrants. Third, a reactionary business strategy may be disruptive, especially if the market tends to be volatile.
Far more advantageous is the ability to identify and anticipate future market directions in advance. Studying the market and being able to systematically spot emerging trends offers the opportunity to enter the market early, test market risks, assess the longevity of the trend, and identify niches in that market trend that may present longer-term opportunities. Equally important is considering how to react should that trend suddenly cease or begin to wane. How many remember trends in this industry that were roller coaster rides to the top and then a plunge to the bottom, catching many businesses off-guard?
Whether you tend to be a reactionary or anticipator, one thing is imperative. Ignoring trends that are unfolding on the market and doing nothing is a perilous strategy that has proven fatal, or nearly so, to many companies that have shrugged off what seemed to be only a market blip.
That’s why trends matter and why it’s important to keep an eye on where the market is heading. It’s not a simple process that is certain because there will be no one article or soothsayer, no single news release or patent announcement that will forecast the exact future of the market’s trajectory. However, by collecting as much market data as possible, talking and networking with peers, clients, and manufacturers, paying attention to major news announcements, you can make all those seemingly unrelated bits begin to tell a story and provide a compass heading for market direction. You may not be one of the forces reshaping the industry, but if you pay close attention and plan well, you can participate and profit from those changes.