African Companies Confident About Future Investments In Market Intelligence But Lag Behind In Systematic Market Monitoring

December 4, 2009. The global recession has left few industries untouched, and it has had an influential impact on Market Intelligence* activities in African organizations. The demand for high quality market information has probably never been as imperative as now, with new opportunities and threats rapidly emerging in the marketplace. These sentiments were reflected in the African responses to the Global Market Intelligence Survey 2009. (The total number of responses reached 724.)

67% of organizations identified that the economic downturn has impacted MI activities “˜significantly’
African organizations suggested that MI activities have increased “˜moderately’ to “˜significantly’ as a result of the economic downturn. The economic climate has affected African organizations, resulting in organizations needing to focus more on MI activities, to minimize the downturn effect in their business and into the future. 51% of African respondents anticipate their investment in Market Intelligence increase over the next 2 years and the rest expect it to remain the same. The data suggests that MI activities are positively aligned with the economic climate in which the organization operates in.

However, 77% of respondents in Africa ““ as compared to 41% in North America and 15% in Northern Europe – say they do not have a systematically organized activity to collect and analyze information about the external operating environment
The majority of firms do not have a systematic measure to collect and analyze data – 95% of respondents in Africa find it hard to gather information needed to support their decision making processes, 27% of the firms experience long delays in getting information, 50% experience some delays in information gathering and 9% are not able to get information at all. Although decision making is hampered by the lack of information on the external environment, surprisingly 78% of organizations are not planning on launching systematic Market Intelligence operations – many companies identifying lack of resource and budget restrictions being the main obstacles to implementing MI. Such an investment may have to wait until economic conditions reverse.

Only 5% of the African respondents say that MI is being used in ALL key decisions
The survey results suggest that as many as 95 % of the surveyed African companies sometimes make vital business decisions without the support of proper Market Intelligence. This result correlates with how satisfied the survey respondents were with the current integration of MI with business processes in their organizations. Only 5% were “˜extremely satisfied’ with the linkage between MI and continuous monitoring, strategic planning, and supply chain management. In the categories innovation & product innovation, and M&A and partnering activities, the linkage between MI and business processes were described as “satisfied” at best.

In Africa there are only a few organizations that are advanced in all facets of MI, while the majority of businesses acknowledged being in the early phases of development
Advanced MI in Africa is still limited, 3 in 5 organizations (that have a MI function), admit that MI is progressing towards the intermediate level. As for the organizational status of MI, there are typically 1-2 organizational layers between the head of MI and the CEO. MI in Africa generally falls either within marketing departments, strategic planning, or business development, with close ties to upper management of the organization.

Annual MI budgets in Africa vary
MI is in its infancy in Africa, up to 66% of respondents who have some sort of MI activities in place have allocated 140 000 USD or less of their annual budgets for MI.

Current MI efforts focus on the short run, but the long term should not be forgotten
The African business environment is traditionally very stock market driven, i.e. fast-paced, which is also reflected in the investment in “˜soft’ areas such as Market Intelligence. However, companies cannot make good tactical decisions without a vision of where the company wants to be in the long term, and organizations should not lose sight of the long-term goals and the related information needs. Naturally the short term tactical moves also need to be backed up with good quality market information.

The recession has had a positive effect on many organizations’ attitudes toward MI. Information on the external environment has become a critical component to business processes, functionality and short term survival. African companies are starting to require intelligence but at the same time, should pay attention to a more sophisticated approach to collecting and analyzing information as the business environment becomes more competitive.

* Market Intelligence or MI is the discipline where organizations systematically gather, process and analyze information from their operating environment to facilitate decision-making

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