What is the importance of megatrend analysis?
By Oso Osegueram who is Editor in Chief at Chief Executive Officer North America and Latin America. He firmly believe life is better aboard a bicycle.
Our world is changing. Today is not as yesterday.
After watching The founder, the Michael Keaton film on how McDonald’s was founded, you can figure how the ambitious and visionary Ray Kroc (played superbly by Keaton) identified the megatrends and took advantage of them.
“Successfully identifying, analyzing and acting on megatrends is essential for success in consumer markets.
The world is changing faster than ever, and it is becoming increasingly difficult to keep up with competitors as technology spurs both the rate of and access to innovation.
Amidst this change, it is difficult for companies to understand why industries are evolving in the way they are today, much less predict how the will evolve into the future”, says the analysis from Euromonitor International, Megatrend Analysis, putting the consumer at the heart of business, directed by Sarah Boumphrey, director, Economies and Consumers and Zandi Brehmer, head of Client Innovation at Euromonitor International.
Both analysts from Euromonitor International recommend that to ensure all relevant megatrends are being captured, it is important to think holistically and create an overarching framework. This is their four-step process:
Step 1: Define a “megatrend”
There is plenty of analysis available on megatrends, but no universal definition.
The first step in the successful application is to define what a megatrend is and what it is not. In its simplest form, a megatrend can be defined as something that helps answer the question: “What is happening?”.
It is a shift in behaviour or attitudes that has global impact and crosses industries. A megatrend is not a short-term fad; it is a trend with longevity, one which represents a fundamental shift in behaviour that is defining consumer markets and behaviours.
Step 2: Establish what is driving long-term shifts in behaviour and attitudes
In our own analysis, we asked: What are the underlying forces driving change and how will they shape the world in 2030? What are the existing issues propelling long-term shifts in consumer attitudes and behaviour?
This analysis identified five drivers of megatrends:
- Shifting economic power
- Population change
- Environmental shifts and pressures
- Changing values
Step 3: Build an exhaustive list of megatrends
Going further, it is important to understand how these high-level drivers will have their impact on consumer behaviour and purchasing decisions. This is where megatrends come into play. Megatrends are generated and shaped by drivers; they are a second level phenomenon and an unstoppable force in the world explained by other influences, namely the drivers identified in step 2.
Step 4: Pinpoint the megatrends which matter most for your business
Recognising the importance of one trend compared to another is crucial when incorporating megatrend analysis into a business strategy. Notwithstanding the need to take a broad approach, the importance assigned to each megatrend will vary depending the industry sector. Some megatrends, such as the “Middle Class Retreat”, have very broad relevance, while others may be of less concern. For instance, a printer manufacturer will have less interest in the “Healthy Living” megatrend than a grocery retailer. The need to pinpoint the most impactful trends for your business is central to successful megatrend analysis.
Megatrends: a leverage for innovating in business
Megatrend analysis helps businesses better anticipate market developments and lead both incremental and disruptive change for their respectives industries. In addition to new product development, megatrend analysis can and should be leveraged as a key input to innovating all areas of a business, including both internal and external change.