State of the Art of Trend Management in Corporations
In times of ever shorter product life cycles and rapid technological progress, many companies are increasingly faced with the need of having to proactively respond to changes and/or anticipate such changes wherever possible. As heralds of change, trends are in particular identified, observed, assessed and analyzed. In practice, companies take very different approaches to prepare for new trends.
This study provides insights into the current status of trend management in everyday corporate life and analyzes what companies need for the implementation of a successful trend management program.
The study provides answers to the following questions:
- Which sources of information are used for trend research?
- Which methods do companies use to investigate and identify trends?
- How do companies assess and document trends?
- How is trend management embedded in an organization?
- Which software is used for trend management?
To this effect, one-on-one interviews with six leading experts were conducted in May and June 2016. Based on these findings a questionnaire was developed and an online survey with 57 participants was conducted during the period from 15 July to 5 August 2016.
The results show that both large corporations and also small and medium-sized enterprises (SME) are fully aware of the relevance of trend management for business operations. From the companies’ perspective, the main task of trend management is to identify changes in their business environment early on, interpret them, understand them and react accordingly.
Here you find a summary of the results of this study:
1. What Sources of Information are Used for Trend Research?
In practice, a broad range of data sources are used for trend research. Among the external sources, both primary data (e.g. conferences, trade fairs and congresses) and also secondary data (e.g. start-ups, competitors, web research, print media, trend databases or agencies) are captured. Compared to large corporations the SMEs rather tend to rely on primary data such as exchanges with colleagues or customer opinions. That way, SMEs also avoid coverage wastage due to irrelevant information. Internal data sources are particularly suited for incremental innovation.
However, if the task is to identify new trends early on in order to align new business models to them, a comprehensive scanning of the external business environment is essential.
This allows detecting trends which had so far not yet appeared on the Trend Radar and to determine whether they are relevant for the company. There is thus a demand for giving SMEs fast and inexpensive access to relevant trend information. In this context, trade associations could, for example, play a key role by offering dedicated trend forums or platforms for SMEs.
2. What Methods Do Companies Use to Investigate and Identify Trends?
The underlying database decisively influences the choice of methods to be used for trend research and trend identification. Qualitative methods are used in particular for the analysis of expert interviews or customer opinions whereas brainstorming, active own research, expert interviews as well as formal and informal exchange are mostly mentioned as methods used for trend identification.
Here, an automated data analysis offers the potential to identify trends faster and more purposefully.
Adequate cluster algorithms and machine learning methods are able to significantly improve the relevance of search results and minimize the use of resources. For their extensive patent research, some companies are already relying on software solutions that are capable of analyzing huge document volumes. That way, technology experts can focus on the key aspects of their work instead of getting lost in the multitude of publications, patents, and press releases.
3. How Do Companies Assess and Document Trends?
For trend evaluation, users rely on tried and tested standard criteria such as relevance for the sector and the company, market potential, level of maturity or strategic fit. Pent-up demand exists more in terms of a regular evaluation of trends. In most companies, the trend evaluation process is unclear and trends evaluated when the need arises and not at a specified point in time. A demand-driven trend evaluation is, of course, purposeful in many cases, but if no regular interval for such evaluation is defined there is a risk that trends might quickly disappear from the radar.
Short-lived trends, in particular, need to be continuously monitored and reassessed time and again.
The continuous evaluation of trends is hindered by the way they are documented. In most cases, a trend profile is created and documented in PowerPoint or other static tools. Here, updates of the trend data are only possible with a high degree of manual effort and the collaborative editing of trend data is next to impossible.
4. How is Trend Management Embedded in an Organization?
Trend management is most frequently embedded in the marketing or strategy department or organized as a task assigned to individual employees. Some large corporations also have dedicated departments dealing with trend management. There is nothing wrong with that because, depending on the company size, either one or the other setting is purposeful. Also with regard to the involvement of employees, it cannot be said that involving a small circle of employees is not sufficient or that the involvement of all employees working for the company is good per se. The decisive factor here is the design of the underlying trend management process. Depending on the respective phase, it makes sense to purposefully involve certain groups of persons or departments.
For a functioning trend management, all process steps and the tasks and roles involved must be implemented and communicated.
5. Which software is used for trend management?
Generally, special trend management software is rather found in large corporations. They use such software for specific trend management tasks, in particular for the structured documentation of trend knowledge. Without continuous documentation, it is not possible to save and update trend knowledge and to make it available for innovation management. Furthermore, software is used for data collection and for an active exchange about trends.
The majority of the respondents regards a dedicated trend management software to be key for a holistic, structured and purposeful trend management.
It allows to actively involve experts in different phases of trend management and creates a central communication platform for new trends and their effects.