Chaos and strategy
The market analysis leads us to a mental trap because we are not just independent observers – we are an active participant. Let's imagine we designed a strategy based on those flashy diagrams, believing in our future prognoses. But all the forecasts we've made, whatever elaborated they have been, were grounded on the current state of the market. But as soon as we begin executing our strategy, we will change the battlefield, so all our predictions will become outdated quickly.
A little bit old but still an impressive example of that is the first iPhone. When it emerged on the market, many companies sold smartphones. Do you remember their names – Nokia, RIM, HTC? But iPhone changed the game so much that all the notions about the market became outdated in several months. I don't know if Steve Jobs looked at the market figures making decisions about the first phone by Apple (from what we know about him, it seems unlikely), but even if he did, I doubt he derived many insights from them.
Even if our strategy doesn't imply launching a game-changer on the market, and even if it fails, we will make significant changes in the market every day, making our previous forecasts out of date. A company needs to update them daily to keep up with changes, but it doesn't make much sense. It is better to invest this time and effort in customer research. Any organization earns money by fulfilling customers' needs, so collecting insights into clients is a better investment. I will share more ideas about customer research in the following articles and in my upcoming book "Red and Yellow Strategies". Conclusion
All the above doesn't mean that a company's leadership should neglect market figures completely. It is valuable to know whether your market is growing or on the decline. It is necessary to consider core players' market shares making big strategic decisions. But from my experience, a brief overview is more than enough. Many years ago, being a CEO, I tended to invest big money in market research, but I was never satisfied with the return on those investments. This data may be helpful for making some short-term decisions, but for strategy formulating purposes, it may be used only as supplementary materials.
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