When things change in the world, your business needs to change too. You need to pay attention to what’s happening around you and figure out what’s important. That’s why trend analysis matters. Then you’ll need to make changes to your business so it keeps up with all the new stuff that’s happening.
How do you create a trend analysis?
Trend analysis is a process that involves looking at data and information to identify patterns and changes in the data over time. To do this, you need to collect data from sources such as surveys, polls, or market reports, and then analyze it to see what kinds of changes are happening. This can help businesses make decisions about where to invest money or what products to create.
To do a trend analysis, you will need to analyze the data or information to identify patterns and changes over time. This can help you to understand how a situation is developing, predict future trends, and make informed decisions.
The DESTEP method is an effective way for businesses to analyze the external environment and plan accordingly. This method considers all the key factors, such as demographic, economic, social, technological, ecological, and political elements. Mapping trends can help you to anticipate changes, allowing you to stay one step ahead of the competition.
Demographics trends: like aging
Economic trends: rising and changing income levels, or the impact of inflation for example
Social trends: like the impact of social media on the mind set of people
Technological trends: for example digitization, or artificial intelligence, etc.
Ecological trends: climate issues
Political: democracy vs autocracy leading to geo political changes and thus impact your supply chain.
Time to market
Time to market is the length of time it takes for a product or technology to go from an idea in someone’s head to actually being available for purchase. It includes things like designing, testing, and manufacturing the product, so it can take a lot of time for a new product to become available.
Impact on your business
Impact on your business means the effect that something has on your business. It could be a change, like a new law or regulation, or an event, like a natural disaster. It can also be the result of something you did, like launching a new product. Impact can be positive or negative, but either way it’ll have a lasting effect on your business.
A time horizon is the length of time you think about when making plans. For example, if you’re saving money for retirement, then your time horizon is likely decades in the future. If you’re planning a vacation, then your time horizon is probably just a few weeks or months.
Macro trends (10-30year)
Macro trends are long-term patterns in the way people and societies live and work. They can take anywhere from 10 to 30 years to play out, and they affect a lot of different parts of our lives, like the economy, technology, and the environment.
Medium trends (3-5 years)
Trends are things that change gradually over time. For example, over the last 3-5 years, people have been buying more and more things online, using their phones more than ever before, and spending more time watching streaming services like Netflix. These are all trends that have been happening over the past few years.
Microtrends (0-1 year)
Microtrends are really small changes or trends that last for a short period of time, usually from 0 to 1 year. They can happen in any area, from technology to fashion to food, and they come and go quickly. For example, a microtrend could be a certain type of clothing that is popular for only a few months.
So what trends do you think are there impacting your business?
Creating a trend analysis involves analyzing historical data to identify patterns, changes, and trends over time. Here’s a step-by-step guide on how to create a trend analysis:
Define the Objective: Determine the purpose of your trend analysis. Clearly define what you want to measure or analyze, such as sales performance, customer behavior, market trends, or financial data.
Gather Relevant Data: Collect the necessary data that is relevant to your objective. This can include historical sales data, customer surveys, market research reports, financial statements, or any other data sources that provide insights into the area you are analyzing.
Clean and Organize the Data: Ensure that your data is accurate, complete, and free of any errors or inconsistencies. Clean and organize the data by removing duplicates, correcting errors, and formatting it in a way that is suitable for analysis.
Identify the Time Frame: Determine the time period you want to analyze. It could be daily, monthly, quarterly, or yearly data, depending on the nature of the trend you are investigating. Ensure that you have sufficient data points to observe meaningful trends.
Plot the Data: Visualize the data using charts or graphs. Line charts are commonly used for trend analysis. Plot the data points along the time axis to observe any patterns, fluctuations, or trends that emerge over time.
Analyze the Data: Examine the plotted data to identify any noticeable trends or patterns. Look for upward or downward trends, seasonality, recurring patterns, or any significant changes that occurred over the selected time frame.
Calculate Statistical Measures: Apply statistical measures to quantify the trends observed in the data. This could include calculating averages, growth rates, percentages, or other relevant statistical indicators to provide more context and insights into the trends.
Interpret the Findings: Draw meaningful conclusions from the trend analysis. Identify the key insights, drivers, and implications of the trends observed. Assess the significance of the trends and their potential impact on future decision-making or strategic planning.
Communicate the Results: Present the trend analysis findings in a clear and concise manner. Use visualizations, charts, and graphs to effectively communicate the trends to stakeholders or decision-makers. Provide supporting explanations and recommendations based on the analysis.
Monitor and Update: Trend analysis is an ongoing process. Continuously monitor the data and update your analysis periodically to track changes and validate the trends over time.
Remember, trend analysis is subjective to the data and the context in which it is analyzed. It requires critical thinking, domain knowledge, and a deep understanding of the subject matter to derive meaningful insights from the data.