Trends Analysis

A trend is a direction or a sequence of events which have some momentum and durability. A trend is not a fad, forecast, or a prediction, but a stable movement that is gradual in progression. Trends can be grouped into six macro-environmental forces: political, economic, cultural, demographic, natural, technological.

Methodology

1. Define the industry and the company objective. Refer to issue analysis. Determine industry boundaries and how they have changed.
2. Identify trends of relevance. Locate trends within the industry or external ones that may impact it. Determine magnitude and duration of trends.
3. Assess significance of trends. Assess and rank importance of trends with respect to the company and its competitors. Analyze threats and opportunities.

Notes

• Fads should not be mistaken for trends
• Trends should not be confused with prospects or with speculation about the future
• Most trends have generally been identified by experts—it is the manager’s job to uncover the ones of greatest relevance to the company
• Remember that trends are movements already under way that have momentum

Strengths

• Forces strategists to look ahead in formulating strategy
• Little analysis is required, mostly research intensive

Weaknesses

• Does not convey information that could warn of future “shocks” or sudden strange occurrences
• Requires much education to comprehend implications of trends