If you ever meet a consultant who promises they can predict the future and your instinct is to run, you should certainly follow your gut. Acknowledging that even the best predictive modelling in volatile or unpredictable areas of business is mostly miss and seldom hit gives us a humbling and realistic attitude when making business decisions.
Having said that, not everything is random — in fact, there are many trends that are easily identifiable, which your competitors may be exploiting already. You don’t want to catch your business falling behind, so read on to see how, and why, trend analysis is beneficial to your company.
Cyclical trends are based on repeating patterns, such as retail seasons, agriculture, and other business cycles. Once you’ve identified the different stages, timing is key for purchasing, scheduling of personnel, and when to advertise.
Cyclical trends are one of the most reliable trends because people behave very predictably when they can’t change what’s happening around them. For example, winter coats aren’t going to sell at their peak in the midst of summer. These kinds of trends will be well known by the people in your industry, so research online articles or consult with influencers in your industry for inside and in-depth information.
Some trends only go in one direction, although it’s not that easy to find these trends that will apply to your business, and if they do, there’s also probably some volatility surrounding that measure.
For example, for the duration of your company, it’s very likely that the world’s population will only continue to grow, barring some incredibly unpredictable disaster. This is a unidirectional trend that you can count on. While not all businesses have this same amount of certainty in their trend forecasts, there likely are areas within your industry that are relatively predictable.
Trends that have a peak or two are tricky because it’s hard to say when and how hard the trend will correct itself. You will need an incredibly insightful, experienced, and well-connected expert to pinpoint those numbers, and anything short of that is a second-rate approximation. However, if you’ve got that key information, you will be able to identify these reversing trends.
Anticipating and responding
Once the right information is in your hands, you need to assess how those changes will affect your company:
- Is my company at extraordinary risk?
- Can I use this opportunity to increase my sales or better position my company in the industry?
- Do I have the resources to fulfill my plans?
After you’ve made your plans, take the action to make sure that your company has the resources to successfully move forward.
For more information on how we can help you analyze trends in your demographic, contact our team today.
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