The recent tax reforms coupled with rapidly advancing technology and the changing face of the commercial environment present a once in a generation opportunity for researchers, along with significant challenges. 2018 presents an unique opportunity to take a fresh look at the evolving commercial landscape, the roles and opportunities for research from the perspective of both the client and supplier side, and the challenges that both face. How companies leverage newly available assets during these times of opportunity and challenge will determine the winners and the losers.
The game changer is the infusion of investment dollars fueled by the corporate tax reduction. These funds can be used to shore up short term performance through stock buy backs or simply sending the money to the bottom line, or they can be used strategically to invest in the business to create a longer term competitive advantage. Most likely it will be a mix of the two. Regardless, the challenge will to be to identify the best uses of capital. The choice process and decisions made will be critical to future sustainable growth rates of organizations.
Some facts - the evolution we have seen in the past few years will continue. The globalization of the competitive landscape will accelerate, barriers to entry will continue to shrink, geographic borders will become less important, and technology will drive the availability of more information regarding products and purchase behavior from ever increasing sources. Those companies that can identify the most important drivers within all of this information, and how to leverage information in the most direct, efficient and cost effective ways will be highly advantaged. Those that don’t will be left behind.
Both manufacturers and research companies will need to ensure that the strategies they adopt and execute are built around their unique strengths and are consistent with the investments that will be made in the business. Once the strategy has been defined, how it is executed becomes critical in ensuring that the organization is nimble and can react quickly to change, and that competitive advantage and an economically advantaged business model results.
Market information and technology will play a critical role in the development of these strategies.
Manufacturers are showing a change in research purchasing behavior that indicates that traditional research methodology is too cumbersome, time consuming and expensive for many situations. For the majority of the corporate research spend, these organizations now want “twice the insights, in half the traditional time, at half the cost”.
Research companies need to react to this change. Newly available capital provides the opportunity to enhance/modify existing services and create new services at a greatly accelerated rate. An evaluation of choices regarding services and strategies and their alignment with internal assets and strengths will drive these activities. Plans must be built on the strengths of the organization, its position in the competitive research set, and where it wants to compete in the next five years amongst that competitive set. Once the strategy is set, the question becomes how to provide services in a competitively advantaged manner. With more to invest in the business some difficult choices need to be made.
Next Blog – How can research companies leverage this opportunity?
Author; David Rosenblatt is a Partner at Cambiar Consulting and heads their Business and Research Operations Practice.