In the complex economic and market environment, many businesses want to know what the future holds, so they can adjust business strategies to changing market. There is no need for a magic 8 ball - the right data and trend analysis can act as one, with much more reliability.
Trend analysis is the basis of strategic leadership, but not everyone acknowledges the importance of it, with many still using gut feeling when operating with their valuable assets. It is already a vital technique for predicting stock market changes, this type of analysis can be applied across all industries. Based on the analysis of relevant data, trends on future asset movements can be generated more easily and strategic goals can be adjusted accordingly.
Trend analysis is all about making data work for a company's benefit. At first, strategists and analysts need to understand what they are trying to extract, and then identify what data signifies market trends like product/stock price, demographic metrics, natural resources performance, etc. - depending on the industry.
The next step is a tricky one, as analysts then need to find a highly reliable source of information about the changing market patterns. Finding this is difficult because predicting the future is impossible, so usually, the past market data is analyzed to predict future behavior and changing patterns are extracted from present indicators.
Bear in mind that the process of collecting, analyzing, and processing data should be given to professionals, like data scientists, with the correct skill sets, as presumptions of 'sort of' knowing what you are dealing with is dangerous. Trend analysis is a precise and straightforward process where the right data interpretation is the key to a reliable forecast. However, the effective collaboration between data specialists, analysts and decision makers is the key part of the process.
Executives and analysts must mutually agree or disagree on shared assumptions - these can be sensitive to the company's policies, external environments, regulations and other factors. If one of the parties (executives or analysts) is unaware of certain factors, then trend analysis is likely to cease to have the desired result and can harm the company's overall business strategy.
Once sources of data, analysis methodology and strategies are agreed among relevant business units, trend analysis can be translated into actionable points for a business strategy.
Since it's impossible to predict exactly what the future holds even with thorough trend analysis - having one is a necessary precaution to both ensure their existing assets and take advantage of new opportunities.