By Judith Binder, Illinois Chapter, Business & Finance and Leadership & Management Divisions

Today’s clients expect more for less. The deadline is tight. There is no budget. Requirements demand accurate, granular detail. The old adage “fast, cheap, accurate – pick two” has broken down. The challenge is to solve the unsolvable.

My client wanted projections of global demand for a key component (similar to a small electric motor) used in many kinds of consumer electronics and industrial devices. Although it was clear that 100s of millions of units were being shipped annually, my client was not satisfied with the methodologies that produced top-down market sizing and growth estimates. Content services and analyst houses sell reports and forecasts for each device type, but my client sought an original methodology with more credibility than a top-down prognostication. So, buying canned analyst reports and fee-based database content was not an option.

The approach I used was to develop a bottom-up market forecast for each of the 20 major device types aggregated into a data-driven forecast for the component’s total addressable market. Over the years I’ve developed a flexible analytical framework for bottom-up market studies.  Adapting this for the component market was straightforward. I created 20 instances of the model — one for each device type market. Using only publicly available information and interviews with key industry players, I created a data mosaic reaching back ten years in each segment. This gave me a trend line that I extrapolated to generate forecasts, segment by segment. Additional analyses of industry trends and drivers were used to tweak the model. Any growth assumption that was not substantiated with data was documented and parameterized so the client could review the results and conduct their own what-ifs.

The result? The report was delivered on time and in budget. The client was thrilled with the findings.

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Judith Binder heads the Research Group of RBSC Corp. Launched in 2002, RBSC provides business, market and competitive intelligence services to major corporations, middle market and smaller organizations, including professional service firms.  To learn more, go online to the RBSC website, LinkedIn, and Twitter.  Right Answers. Right Time.™