Market analysis tools help businesses analyze external factors affecting their sales. Independent studies, PEST analysis, and third-party companies provide specific information for decision-making, increasing business intelligence and competitiveness. PEST factors include political, economic, social, and technological factors. Third-party companies can provide more knowledge and expertise for better insights.
Market analysis tools allow a business to analyze external factors that determine how it sells goods or services to consumers. Some common tools include independent studies, PEST analysis, or using a third-party company. Each of these tools provides companies with specific information for decision-making. In short, they add knowledge to the company’s decision support system. More information increases an individual’s or company’s business intelligence, allowing them to be more informed and competitive in the overall economy.
Independent studies often look at a single aspect of a larger market, population, or economy. For example, a company might want information about a specific consumer group, market location, or international economy. The independent study’s market analysis tools focus on the information needed for the desired purpose. Demographic information, competitor information, resource availability, and other data may form part of the independent study. These studies can include several smaller parts that make up a much larger report for use by a company’s management team.
PEST stands for political, economic, social and technological factors that can affect a company. All markets tend to have some or all of these factors. Political factors include any intervention by a government agency. Regulations, laws or taxes can play a positive and negative role. Economic factors include inflation, money supply, tax policy, and other items often beyond the company’s control. In many cases, the government may be involved in both of these factors.
Social factors in PEST market analysis tools generally deal with consumers’ perceptions of a company or its products. This can also include environmental factors such as a company’s use of natural resources. Technological factors represent any use of technology by the company or its competitors. A company that fails to implement technology, for example, may lose market share because other companies take advantage of these opportunities. Market analysis tools that use this approach can take information from multiple markets or economic environments.
In some cases, a company may find that it simply does not have the tools to conduct market analysis. In this case, third-party companies or consultants can adapt market analysis tools for the business. This allows a company to pay for a multitude of tools that include all the important data. While third-party resources can be expensive, they may have more knowledge or expertise in these areas. Therefore, the information is better and provides more insight than an internal report.
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