One of the greatest benefits that data and analytics provides to organizational leaders is the opportunity to revolutionize existing business models and launch entirely new business lines.
Historically, companies that make products, like consumer-packaged goods, have invested heavily in R&D to produce new and improved offerings. While that approach can yield new products and revenue streams, it’s not a very efficient model.
Businesses today are increasingly leveraging analytics and data—including customer sentiment, transactional data, market data, and other types of data—to identify new business opportunities.
Airline executives are able to analyze customer and market data to determine if there’s a demand among business-class travelers for service between a handful of cities. Further research could reveal there isn’t enough anticipated passenger traffic to warrant the use of a wide-body jet. However, customer sentiment indicates there’s strong demand for executive jet service.
Business leaders can use these insights to determine the costs of running a semi-private jet service between target cities. To help determine whether such a service would be viable, they can find the prices that executive travelers would be willing to pay.
Business leaders can also use data and analytics to establish whether the products or services they sell in a domestic market will be relevant to customers in a different market. For instance, executives for a U.S.-based hotel chain can explore the potential for expanding into Latin America. An examination of regulatory, customer, and market data using analytics reveals a terrific opportunity for expansion in certain countries, such as Peru, where there are strong economic fundamentals.
However, analysis reveals that high taxes, a lack of infrastructure, and red tape pose serious risks to expanding into other nearby countries such as Brazil. Hotel leaders are able to use these insights to help shape their expansion strategies.