What Are the Benefits of Business Research?
When we think of business research, we often think of a caller who wants us to complete a survey, or a focus group that will evaluate a possible product. But this is just part of the process. Businesses continually monitor revenues and profitability as well as the competitive market and keep abreast of changes via a systematic approach to business research.
Businesses need information to make good decisions. Information gathered to support these decisions is termed business research. Much of the information is qualitative and measures market trends such as sales growth and profitability, as well as competitive practices. The focus may be narrow involving just one product of the corporation, or may involve a complete look at the business model. Some level of business research is ongoing, and many companies maintain research departments, but during periods of uncertainty or financial distress, greater focus is placed on research to re-establish financial viability and improve profits.
Business research departments maintain a situation analysis, which is a document that details the past and present. Often used in marketing, the analysis will illustrate product sales, growth, consumption patterns, current marketing strategies and how each product contributes to profit. In addition, companies continually review both internal and external factors. The research is compiled in a document referred to as a SWOT analysis. The analysis details strengths, weaknesses, opportunities and threats. The document will identify problem areas, as well as suggest areas of expansion. The researchers will then produce alternative models based on scenarios that maximize strengths and exploit opportunities.
Research identifies problems. It is an executive tool that is used to improve financial outcomes. An example is market pricing. Research may show that based on current costs and the market price, profitability will be unattainable and resources should be placed in other areas. For instance, an air carrier may decide to cut a route if a new low-cost airline enters the market. Market research may identify customer complaints caused by quality issues. Competitive research may show that other companies are able to bring the product to the end user faster and at a lower cost, affecting both market share and profitability. Research provides the information that either confirms an existing course is optimum, or that the course needs to be changed.
Business research enables companies to understand the entire market, and how their business fits in. It may uncover new technologies that will improve competitiveness. It will likely boost sales or re-direct resources to a more profitable product. It demonstrates to stockholders that the company is vibrant and continually re-evaluates it relative position in the industry, providing itself measurement tools to benchmark achievements.