Management teams, consultants, and investors can all utilize desk research as they analyze or enter into new projects. It provides background information critical to the decision making process and an understanding of a new market. Without conducting some form of desk research, businesses and investors are essentially flying blind. If they are entering a new or even tangential space, more experienced and knowledgeable organizations have the advantage. For a consultant, it is essential to start a new engagement with an understanding of that firms markets and critical factors. Desk research from a firm like Research Optimus provides this key background material.
Desk Research for New Projects
A new project is often in a market that is a little less familiar to a business. A company may look to expand geographically to a new market or start to grow its product line. In both cases, the cycles and business dynamics are different.
For example, if you sell products into the housing market in the US. There is a cycle and historic data on that to understand if the market has room to grow or may be at a peak. If the business has been in that market for many years, it understands that cycle. Now the business wants to start offering products to Mexico. The dynamics are different and its housing cycle may follow a very different pattern. Also, how they build houses may vary so product needs are not the same. Another area it has to do work on is distribution. If the business sells through Lowe’s and Home Depot in the U.S., it will need to identify a different distribution channel in Mexico.
Deciding to Start a Project
Desk research helps a business understand if it should even pursue a new project. A factory expansion is a big capital expense and investment. Making the wrong decision can bring excess capacity onto the market and hurt pricing. In addition, it can increase fixed costs for a business that can weigh heavily on it during a weak economy. In this situation, it makes sense to compile a report on the industry, its current capacity, competitors pricing, and look at market research reports. A business too often sees its markets more optimistically than what they look like in reality. Outsourcing this and looking at the research available in the market provides a great check on this. Before a new project or investment is a great time to do this.
Desk Research for Internal Initiatives
Even projects focused internally can benefit from desk research. A company looking to improve its operations can use desk research to find the latest trends, methodologies, and products to restructure or incrementally improve the business. For example, an organization could look at different ways to adopt and implement the principles of Lean to improve its operations.
There is a glut of information and the key is to find and distill it down to your needs. Information pulled from government data, the internet, libraries, and published research reports can all be important. Identifying the best sources and then sorting through all the information is time consuming. There is significant time savings from outsourcing the research and having the report put together with the critical information. This allows a business or consultant to focus incorporating the secondary research into the analysis and on execution.
– Research Optimus