The Postal Service relies on market research, the continuous process of gathering data on product and service characteristics, to enhance strategic thinking, research, analysis, and decision making and to sharpen competitive advantages. The most important insight gained from market research is an understanding of potential suppliers. All SM portfolios must perform and regularly update existing market research in a cross-functional and collaborative manner by conducting a quarterly market analysis, the commodity-based assessment of supplier segmentation, trends in supply and demand, economic factors, volatility, and risks, which identifies the current supplier market, industry trends, and market trends. Suppliers should be ranked by percentage of market share, using the Supplier Analysis Worksheet, which should be leveraged when the market analysis is generated. Information regarding suppliers is then used to help identify key suppliers and show the Postal Service how to create competition. The development of category strategies will be tailored to these key suppliers.
Market research should focus on areas and market issues, including, but not limited to:
Benchmarking should also be used to compare a given CMC’s present performance (e.g., quality of outputs, success level of operational methods, process innovation) against the performance of other CMCs (as well as that of external organizations in the industry). Benchmarking should be performed as part of market research and is discussed in detail in Section 1-10, Conduct Market Research and Benchmarking Analysis. Benchmarking demonstrates whether the strategies focused on the general approach to the development and management of the core competencies, innovations, and change that are already in place are functional or whether requirements and the market necessitate more extreme innovation (the development of completely new category strategies). Benchmarking offers competitive intelligence on what already exists and indicates what is achievable in future transactions with suppliers. When competitive intelligence demonstrates that little is achievable in future transactions with suppliers, the category strategy must reflect that in-house manufacture of the commodity is warranted.
Another important element of commodity strategies is an understanding of Postal Service capabilities (e.g., innovation level of internal methodologies, patent protection) assessed by the SWOT analysis. By understanding which strengths to exploit, which weaknesses to improve, which opportunities to pursue, and which threats to negate, the Postal Service can develop realistic plans that are tailored to Postal Service circumstances and can strategically approach the purchasing process.
