At Access/Information, we have noticed a trend of companies focusing on growing markets. We have even previously discussed how the identification of local growth industries can represent good targets for your products or services. But what happens when the segment you currently serve goes from booming to rapid decline?
Over the past year, we have conducted a sizable amount of research for companies that are dependent upon the success of the oil and gas industry and its participants. It has been widely publicized that this market experienced a sizable downturn. According to data from the Energy Information Administration and International Monetary Fund, the oil and natural gas price index fell 142.5% in 2015 and another 25.9% in 2016.
Such severe declines have lasting effects, ranging from bankruptcy, market exits, and unemployment. It is the companies that are able to pivot and diversify that can ride out the downturn and continue to succeed.
Evaluate your products or services. There are probably other industries in which you can adapt your offerings to. Do not jump head first into a new market though without assessing its potential just because it may be an applicable customer base.
Examine whether the industry is not only growing or declining, but what life cycle phase it is in. An industry may be projected to grow in the coming years, but actually be in the mature or decline phase of its lifecycle due to innovative solutions that has shifted demand elsewhere.
Also conduct research to find out if the market is saturated. Are there already a large number of companies similar to yours serving that industry? Are their areas of the country where there is an unmet need that you may be able target?
We helped one client who developed a proprietary product for an entirely different industry by providing product intelligence and definitive market data on its economic contributions. No matter your product or service, we can help you too.