Mastering Vendor Research: An Analyst’s Guide
Understanding your market is a cornerstone of business success. It’s not just about knowing what your customers want, but also about understanding who your competitors are. In our previous article, we discussed market sizing and briefly touched on vendor research. In this guide, we will delve deeper into that topic.
This guide is designed to help analysts navigate the process of identifying market vendors, conducting thorough research, and utilizing free sources for market data.
Identifying Market Vendors
Identifying the major players in your market is the first step in market sizing. These vendors, which include both private and public companies, largely shape the market dynamics and provide a benchmark for product offerings. But how do you identify these vendors?
Trade Associations
Trade associations often have directories of their members, which can be a great resource for identifying vendors in a specific industry. For example, the National Electrical Manufacturers Association (NEMA) lists members involved in the manufacture of electrical equipment, which could be useful if you’re researching the LED lighting market.
For the social commerce market, you might look at the Internet Marketing Association (IMA), while for data centers, the Data Center Standards Foundation (DCSF) could be a valuable resource. If you’re researching the AI headsets market, the Consumer Technology Association (CTA) might be a good starting point.
Online Marketplaces:
Websites like Amazon, Alibaba, and eBay can provide insights into who the major vendors are in a particular market. For B2C vendors, Amazon and eBay are great resources. For B2B vendors, Alibaba and ThomasNet can provide a wealth of information. These platforms list products from various vendors, giving you a sense of who’s operating in that space.
Public Vendors and Annual Reports
Identifying all public vendors in your market and checking their annual reports can be a good starting point. Most vendors will call out their key competitors in the market, helping you understand market consolidation and add more relevant vendors to your list.
For example, if you’re researching the data center market, you might start with public companies like IBM and Microsoft. In their annual reports, they might mention competitors like Amazon Web Services and Google Cloud, which you can then add to your list of vendors.
Creating a Data Collection Template
To streamline your research, it can be helpful to create an Excel template for data collection. Here are some suggestions for what to include:
Company Information: Include basic information like the company’s name, location, and website.
Product Information: List the company’s products, along with information about pricing and target markets. You might also include a column for product segmentation, to help you identify similar product clusters. For example:
This information can help you understand the technical capabilities of different products in the market, and how they’re positioned in terms of applications.
Financial Performance: Include columns for revenue, net revenue, EBITDA, gross profits, and gross margins. If the company reports its financials in a different currency, you might also include a column for the exchange rate, so you can convert the figures to USD. You could use an average of the exchange rate for that particular year. For example:
This information can help you understand the financial health and performance of different companies in the market.
Customer Reviews: Include a column for customer reviews, to help you track a company’s strengths and weaknesses. You can use basic scraping tools to gather this data from different platforms, which can help in sentiment analysis. For example, you could scrape reviews from Amazon or other e-commerce platforms, and assign a numerical score based on the sentiment expressed in the review.
Social Media Engagement: Include columns for the company’s social media platforms, along with any notable marketing strategies or customer engagement tactics. For example:
News Releases: Try to categorize news into different categories, such as product launches, geographic expansions, or strategic acquisitions. Add another column that mentions whether this is positive, neutral, or negative. Add the region/country and year if possible. This will help identify per year what strategic initiatives the company undertook, or what was their focus. For example:
Company Profile: A Crucial Task
As an analyst, you may find writing company profiles tedious. However, this task can provide a wealth of information about a company’s operations, products, target markets, and more. So, don’t ignore this crucial task. It can provide valuable insights that can help you understand your market better.
Also remember, annual reports are a treasure trove of information. They provide a comprehensive overview of a company’s performance over the past year and offer insights into its future plans.
In conclusion, identifying and researching market vendors is a crucial step in understanding your market. By following the steps outlined in this article, you’ll be well on your way to gaining a comprehensive understanding of your market landscape.
