A recent article asserts that analytics is the only sustainable source of competitive advantage in today’s markets. The author argues that Michael Porter’s Five Sources of Competitive Advantage are more vulnerable today due to the competitions’ heightened ability to imitate companies, invade market niches, and quickly cut costs. Analytics, he argues, is the foundation for quicker (and more accurate) decision-making, which is the ultimate defense against competitors – so companies need to get over their hesitancy in leveraging business analytics.
Market Research has both an interest in better and faster decision-making and analytics. Company data is indeed a rich source of information on companies, and we do have more technological tools that allow us to build models and extract valuable information from what can otherwise be an overwhelming data dump.
But analytics can pose a huge challenge Research as well as anyone else trying to make decisions from data. Sure, data can tell you what is happening – but it can’t tell you why. Being alerted to potential issues, or potential opportunities, is certainly important. But stopping at that point of data observation and making a decision is dangerous except in the most tactical of cases – in most situations, it’s necessary to answer the question why? Why is the data showing up like this? Then you can make decisions that will address the underlying problem, or take full advantage of the underlying insight.
To answer that “why” question, you have to layer in other Market Research methodologies – those that are designed to test hypotheses – and get to the level of consumer psychology.
MREB members: learn more about integrating analytics with other methodologies and see examples from Clorox, Tesco, Adobe, and FedEx.
MREB members: learn more about structuring analytics teams and see examples from Caterpillar and the Home Depot.