What are the most successful market analysis strategies for sourcing?

In my experience of sourcing successful products i have build a strategy that i closely follow. The strategy is simple and effective. First you have to define the objective and goal for your product sourcing this can include price, technical specification, customization and MOQ ( Minimum Order Quantity). The above should be primary objectives followed by secondary objectives such as legal compliances, custom compliances and custom duty (if sourcing is international). Build a matrix based on these objective and weight each criteria as per your business requirement. For some organizations quality is highly critical for some it could be the pricing that matters the most.

One of the important points is to find the potential of the product in the destination country, finding these things can be done both online and field research, in online research you can search for competing companies and find the culture of using that product, your product should be in The destination country of the applicant, in field research, if it is possible, you can do this with market research, questionnaires, visiting exhibitions, and the supply sources must be strong and have several different qualities.

Setting clear sourcing objectives and criteria is foundational for successful market analysis. The article highlights the need to align these with business goals and standards, which resonates with strategic sourcing practices. Considering factors like cost, quality, delivery, and innovation, along with market risks like political or economic variables, is crucial. This approach not only streamlines the sourcing process but also ensures a comprehensive evaluation of potential suppliers, leading to more informed and effective decisions.

Before conducting market analysis, strategic sourcing professionals should define business goals, cost, quality levels, and delivery requirements. This helps to ensure that sourcing activities are aligned with overall business objectives and that KPIs are met. It is also important to document every step of the sourcing process to support future sourcing efforts.

A sound knowledge of the market the product is to be sold into is very essential. Is the market price driven or quality driven, is the product easily accessible in that particular market? Does the materials been sourced need government regulatory agent approval before importation? Is it Custom compliance? All these questions have to be properly addressed and put into consideration in the sourcing criteria.

Segmenting your market and sourcing is extremely critical as per the STP model of marketing. Finding a niche that has TAM that is sufficient for sustainable business should be your first Todo task. Once you have identified the segment start the search of a supplier that has a FMS(flexible manufacturing system) compatibility and start investing time in RnD to start developing a prototype. And if this protype is market ready, you may need to invest money in developing custom tools for your segment. This customization will give you an edge over your competition. and you will always have better revenues in that segment. Note : A legal contract from supplier is must that they should not give your tooling to other vendors/customers.

Supplier segmentation is the best way to identify successful and underperforming commodities in the overall sourcing landscape. By focusing on critical suppliers, we can achieve business requirements such as product urgency, market flexibility, cost impact, and performance.

SWOT - Strengths, Weaknesses, Opportunities, and Threats. Strengths: Identify the strengths of your sourcing strategy. This could include having a robust supplier network, efficient procurement processes, or strong negotiation skills. Weaknesses: Examine areas where your sourcing process may be lacking. This could be related to a limited supplier base, inefficiencies in the procurement workflow, or inadequate risk management. Opportunities: This might involve discovering new suppliers, optimizing cost structures, or leveraging emerging technologies. Threats: Evaluate potential threats to your sourcing process. Consider external factors that may pose challenges to your sourcing effectiveness.

SWOT analysis is a powerful tool for assessing supplier risk in sourcing management, both internal and external factors. By conducting this analysis, we can identify and mitigate sourcing risks in our global environment.

Consider below market analysis strategies for sourcing: 1. PESTLE Analysis - Political, Economic, Social, Technological, Legal & Environmental factors 2. Porter Five Forces Model – Buyer Power, Supplier Power, Threat of new entrants, Substitute Threat & Competitive Rivalry 3. Qualitative Analysis -Data-driven methods like market surveys, trend analysis & statistical modelling 4. Qualitative Analysis - Subjective aspects of the market, like customer preferences, industry trends & expert opinions 5. Cost-Benefit Analysis - Costs associated & comparison with the benefits 6. Competitor Analysis - Market share, strengths, weaknesses & strategies 7. Networking and Relationships with key players in the industry, suppliers & customers