Winning in Fragmenting Markets requires a Game Change
Today’s major business players are under considerable consolidation pressures because they must be constantly looking to reduce their fixed cost base and maximise economies of scale. At the same time, consumer behaviour markets are fragmenting rapidly.
The consequence of this is more granular competition, in decreasing sized market ‘cells’:
- Channel-specific, e.g. Private Label in modern trade
- Geography-specific, e.g. regional Brands
- Consumer-specific, e.g. socio-economic class-specific Brands
So managing business performance by averages is no longer adequate for such fragmentation and complexity. A de-averaging of strategy and execution might be correct in principle, but is usually too complex in everyday practice.
The game has traditionally been to focus on achieving economies of scale, optimizing the value chain by working down it, focusing on cost consolidation. The game change is now to turn this on its head, by working back up the value chain, recognising, understanding and controlling fragmentation complexity, managing up the positive value exceptions and managing out the negative value exceptions. This will generate and strengthen your competitive advantage – but such a reality is difficult to implement.
To work, the game change requires PMSI’s innovative business intelligence (BI) solution that brings together all internal and external data and knowledge to enable:
- Consistency of data and of analysis
- Correlations between different (hard and soft) data sets
- Finding causalities underpinning predictive Key Performance Drivers
- Identifying clear choices in high-value and high-risk market cells
- Implementing easy and consistent tracking of Key Analyses and Performance Indicators
- Actionable interpretation of Key Performance Drivers
- A balanced effort over the short, medium and long term
PMSI expertise in integrating various external and internal data sources that are frequently messy and complex is used to create a Strategic Database. By using an intuitive End-User-Interface which is loaded with a Manager’s specific set of lenses, refreshed monthly, every Manager will be able to generate his own insights easily from the Strategic Database, maximising implementation effort.
This requires your Management to understand their own battlegrounds, applying their specific business perspectives to generate insights which trigger their management actions. It will unleash the collective brainpower and energy of your management teams.
For example, your Sales Director can now answer questions like: ‘Where can tactical price improvements occur?’ and ‘What are my key sales priorities given the complexity around segments, channels and accounts?’
Only a few leading players in fragmenting business to consumer markets are employing these innovative, game changing techniques. To understand the benefits this approach can bring to your own business, do get in touch with your nearest PMSI office or contact us via email.
Best wishes,
Patrick Mosimann
PMSI Managing Director