Industry Data & Market Research

Strategic Planning with the Predicting Industry Evolution and Change Framework

Predicting Industry Evolution and Change is a technique that enables better strategic planning in business.

Contrary to popular belief, most industries evolve slowly and in predictable ways. It is possible to align strategy with industry trajectory.

There are four trajectories for change:

  • Radical Change: core assets and activities are threatened by obsolescence. Companies must balance harvesting profits in the short term versus investing in activities that could create future profits in the long term. The speed of erosion determines how this should be balanced

  • Progressive Change: Neither core assets nor core activities are immediately threatened. A company can innovate through interrelated products that create compounded demand and profits.

  • Creative Change: core assets are under threat but core activities are stable. Based on the speed with which core assets are depreciating, determine how soon the business will erode and take appropriate measures.

  • Intermediating Change: core assets retain their value, but core activities are under threat. Business should aggressively pursue short term profits while minimizing long-term commitments and contracts.

Industry change often occurs over decades. Businesses are better off accepting the change and planning accordingly, rather than attempting to fight it.

The advantage for incorporating industry change into strategy is threefold: first, there is greater awareness throughout the organization about how to make tradeoffs with respect to industry evolution. Secondly, an understanding of industry trends allows better resource allocation. Third, a realistic view of the market shows how to deal with unforeseen opportunities and problems as they occur.

Other Strategic Planning Frameworks

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