Demographic changes and trends impact my business. I need to be able to adapt to this.
How this helps you
What can you learn about demographic factors for your business? Typically, if you are making a product or service for elderly, a demographics analysis will learn you how, and at what rate your potential customer pool might develop. This allows you to adapt and optimise your strategy, convince your stakeholders and motivate your employees.
What is it?
Entrepreneurs should care to understand the environment around them. There are all sorts of forces that could impact your business. One of these relates to Demographics, which is the knowledge about the quantitative aspects of population groups. It looks at size and dispersion of populations and how these are composed based on indicators like age, gender, ethnicity, religion and nationality. Demographics is one of the elements in a DEPEST-analysis.
How does it relate?
The DEPEST model is a framework that looks at six key forces outside any business or venture: Demographical, Ecological, Political, Economical, Social and Technological. The DEPEST was created by Harvard professor Francis Aguilar in 1967. As a framework it helps companies improve their decision making and timing. It can be used to approach future challenges, highlight valuable opportunities or identify threats that might harm your business.
DEPEST can work alone or be used in combination with other tools, such as Porter’s Five Forces and SWOT analysis, to determine an overall view of the environment around an organisation.
Your next Waypoint
Try to identify the demographics of your target customer groups. Think of elements like age, gender, social status, city or any other characteristic that is meaningful to your specific product or solution.
Here’s a nice page, with a lot of questions about external factors to get you started. mindtools.com
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