Analysis is a key tool for businesses. It shows the business the present reality and enables it to decide on the course ahead. Analysis of a business, industry or the overall economy, brings out its strengths and weaknesses, and also the opportunities and threats. Analysis also helps businesses understand the trends and shifts in consumer behaviour and preferences. In short, analysis helps businesses see a holistic picture of the present and the future.
Industry Analysis: The key Importance of Industry Analysis for Competitive Edge in Services Sector
With an estimated growth of 8.8 per cent in 2016-17, Services Sector in India is an important net foreign exchange earner and the most attractive sector for FDI (Foreign Direct Investment) inflows. Services Sector is also the largest contributor to India’s GDP, constituting more than 50% of the total GDP by value.
Services are extremely diverse, not only in India, but all over the world. Broadly, services can be categorized as 1) consumer services and 2) business services. For example, a salon that provides grooming and make-over services to individuals is a consumer service provider, whereas a software development company serves institutional clients, and is a business service provider. However, many service providers serve both consumers and institutions, for example telecom services, banking and other financial services, and lawyers etc.
Why is Analysis Important in Services?
Because of the manner in which services are delivered and consumed, most service industries tend to be extremely competitive. Service providers, especially in the organized segment, have long realized the significance of continuous, real-time analysis of legitimate market intelligence as the mainstay of survival. At the core of this premise, there are three important factors to be accounted for:
- Services are performed, and not produced. This makes the service experience extremely dependent on people, making it hard to standardize.
- Customer loyalty is extremely crucial to attain competitive leadership for a service provider. A large base of loyal customers can act as a significant entry barrier for competitors.
- Service cannot be returned. So, each time a customer consumes a service, there is a risk of service-failure involved.
This means that services, unlike pure-play products, need to constantly evolve and be in sync with the pulse of customers and their service experiences.
Analysis and Competitive Edge in Services
The application of analysis by service providers is probably more apparent in the organized sectors than in the unorganized ones. Let us look at a few prominent examples of service providers securing competitive advantage through analysis:
Telecom Industry: It is one of the most competitive industries in India, and is amongst the most regulated ones. Recently, a leading telecom operator launched a hi-speed 4G service, coupling the launch with a 3-month free-trial that was later extended to 6 months. Irrespective of whether this model succeeds in the long-run or not, this is a case of business advantage gained from Indian consumers’ trends analysis, that suggested that consumers today are looking for cheaper, faster data more than ever.
Insurance Industry: India’s insurable headcount is estimated to be 750 mn in 2020, and yet its insurance penetration still lies considerably below the global average. High customer acquisition costs, low customer retention, and severe competition among players has made analysis indispensable for insurance players. By partnering with foreign providers, Indian insurance providers have stepped-up their game using deep analytics tools such as machine learning, natural language processing, cloud computing, big data and even geospatial analytics (in the case of crop insurance, for example).
Banking Industry: Until recently, traditional banking services in India were struggling to survive the blow from e-wallets, payment gateways and other FinTech innovations. Conventional banking is now being recast to function seamlessly through customers’ mobiles as an on-the-go service. Actionable analysis of consumer behaviour and service usage pattern plays a pivotal role in that direction. In this case, it is not just consumer intelligence but also competition intelligence that has been instrumental in helping banks reinvent their solutions.
Entertainment and Media Industry: Any form of media – print, audio, audio-visual or live – depends heavily on tracking consumer tastes and preferences to remain relevant. A very recent example of how entertainment in India evolved in tune with consumer preferences is that of introduction of mobile entertainment streaming channels. With a simple downloadable app, these channels provide highly tailored and/or popular content at minimum possible data consumption rate and fast streaming, and have already seen huge acceptance from urban masses.
Are you associated with a service industry? Have you experienced the need for analysis in your business? What are the tools and approaches that you have used? Please share your experiences with us on [email protected]
References:
- https://www.ibef.org/industry/services.aspx
- https://www.ibef.org/industry/insurance-sector-india.aspx
- http://timesofindia.indiatimes.com/business/india-business/Insurance-penetration-in-India-at-3-9-percent-below-world-
- https://www.ibef.org/industry/banking-india.aspx
- http://www.pwc.in/press-releases/india-third-largest-domestic-banking-sector-by-2050.html
- http://pib.nic.in/newsite/printrelease.aspx?relid=154627
Event – Business Buyer’s Club – A novel beginning by Indiabizforsale.com
IndiaBizForSale was started in 2013 with the core mission of helping small and medium business owners sell their businesses instead of shutting it down. Back then, we were completely business owner centric – i.e. only sell-side listings existed on our platform.
However, with continuous analysis of data and trends, our mission and vision has evolved over a period of time. Firstly, we realized that our platform can also help businesses looking for investment, partnership etc. and so we widened our listing opportunities to include those growth options as well. The bigger revelation happened when our analysis brought to light the sheer power of buyers and investors. The number of registered buyers on our platform was 2-3 times more than that of the sellers! We were constantly receiving inquiries from them and soon we realized that we would need to focus on buy-side listings as well and showcase their requirements.
In this way, from a seller-centric platform we became a business matchmaking platform.
Even as we speak, we are reaping the benefits of putting analysis into action by evolving into a matchmaking platform. The matchmaking approach has shown its wonders with a considerable number of matches already being made – and what’s more – from among these matches, we have a closed a number of deals as well.
More recently, our analysis has indicated the need for providing advisory support to both buyers and sellers. This has sparked our transition towards becoming an end-to-end deal-making platform.
We hosted the opening edition of Business Buyer’s Club in Mumbai last week as our first attempt towards fast-tracking deal discovery with credible prospects. In this event, handpicked businesses were showcased to a cohort of genuine buyers and investors from Mumbai. This was followed by a networking lunch that facilitated personal interaction between buyers, investors and business owners.
Even as we evolve and transform through insightful analysis, our larger goals remain the same – we are here to make SME deal-making hassle-free, quick, and exciting!
Team Member Message – Dhanaji
Data and its analysis has a very important role in the development of our organization. Our data analysis process considers industry trends, client’s requirements, interests etc. Analysing the data helps us in giving better services to our users as well as to achieve company’s goals efficiently.