What Is Strategic Forecasting?
Your business can outperform the competition if you have a method for looking ahead and planning for adjustments to create new income streams. Strategic forecasting attempts to look into the future to determine what markets may develop, what resources the company needs to exploit those markets and ways to enter those markets before the competition does. Some guesswork is involved, but you can base your forecasts on solid business principles.
When you forecast trends for your industry, you must understand the market and what elements can cause shifts in customers' tastes or needs. Companies that realized the digital age would eliminate demand for many products such as camera film and vinyl records positioned themselves to take advantage of the coming environment. Look at news stories about technology, changing demographics and sales spikes for specific products to inform yourself about possible changes coming your way.
Your strategic forecast must define the goals for your company. For example, ask questions about the amount of market share you want to capture, the percentage increase you would like in profits or the amount of brand recognition you want to achieve. Your forecast will be unfocused if you do not set goals for taking advantage of the trends you spot.
You can't make choices until you know what the possibilities are. Part of your strategic forecasting should cover the options you have for adjusting to the changes you see coming. For example, if your forecast indicates rising demand for an advanced version of your current product, examine ways to add features, set new prices to compensate you for the expense of those features and market the new version to the developing target audience.
Part of your forecasting process involves making decisions about how to position the company to take advantage of future changes. These decisions are nearly always tentative, because forecasts are estimations of what might happen. Nevertheless, you can create initiatives to explore new products, marketing techniques and production techniques. Implementing these decisions does not involve making actual changes to the company before a trend becomes reality; it means creating teams or assigning tasks to individuals so you have the information you need when the time for change arrives.