Question: Why did the thief rob the bank?
Answer: Because that’s where the money is.
In this situation, the thief understood enough about his market to know where to find the money!
It’s important for an organisation to have a solid understanding of where the money is in their own market segment before they can maximise their organisation’s potential.
Data on the market can be used to answer a number of questions that lead to better decision making. What is the size of your market? Is it growing or contracting? Why? How is the market evolving or changing? What disruptive forces are impacting the market? How are competitors’ actions changing the market? What are the bounds and scope of the market that you are operating in? Should we look to another market segment in order to continue growing the business? How much should we spend on acquiring the knowledge necessary to answer these questions?
Unfortunately, this is one area of business where it can be easier to ask a question than to answer it! Getting reliable and detailed information on your market is challenging in many sectors, but there is now considerable information available to providers working within the NDIS.
In some sectors, it might only be possible to find aggregate data on the whole of an industry rather than something specific to the sector of interest. In those cases, high level observations might be drawn about the market, but there would be varying degrees of accuracy.
Where can I get data on the market? Industry associations often publish reports with this kind of information. For disability providers, the NDIS quarterly reports provide a wealth of information – but this needs to be analysed closely to understand the relevant trends down to your market segment.
A robust market assessment is perhaps the most important part of the strategic planning process. Without it, the strategy can suffer from just being a plan about what direction you think the organisation should be heading in, without actually having the logical and rational thought to why that should be the right direction.
The market assessment involves a number of steps and exercises that create a critical analysis of the organisation which aids in understanding the market dynamics better and leads to better strategic decisions and direction.
We believe that a best practice market assessment includes the relevant aspects of the following:
- Understanding the market context at a macro level through using a tool like PESTEL.
- Considering your organisation’s place within the market context using a model like SWOT or SOAR.
- Internal Analysis – identifying critical internal issues that need to be addressed within the strategic plan.
- Market Size – projecting forward changes in the size and dynamics of the market segments you are operating in; and understanding how to adapt the business and services to fit that.
- Customer Analysis – understanding the changing needs of customers, and what makes them choose your services.
- Competitor Analysis – looking at the major competitors in the market and developing strategies for how you compete against them.
This approach can be scaled to small and large organisations with varying levels of detail.
A structure like this helps the Board and management team to focus on the myriad different issues impacting on the organisation’s strategy and ensure the strategic plan fits that context.
Last month we looked at how the market is continually changing; and how to ensure that the market conditions are monitored and part of regular management/board discussion. Click here to go back to that article.
In coming months and future editions of Foreword, we will provide more detail on these elements that make up the market assessment.
CBB has worked with a number of organisations to help them better understand the market they operate in. We can help your strategic planning process by preparing a market scan or review.
For providers working in the NDIS currently or planning to in future, we suggest you can sign up to the NDIS Success Program. This program aims to increase the supply of NDIS services in communities, with a particular focus on regional, remote and rural communities and Aboriginal and Torres Strait Islander communities. Delivered via webinars and online resources, we’ll give you all the tools and information you need for NDIS Success.