Demographics - Key data point?

Ed Marsh | Jun 28, 2011

Market Analysis Criteria


How do we/should we weigh different factors when we identify key markets to target/exclude from our strategic global business development plan?  Certainly a lot depends on the specific product and globalization objectives, but along the way we almost certainly have to take into account demographics as one criteria in selecting target markets.

"3-D Hurricane"


I have read several interesting pieces recently that focus on demographics.  (http://www.johnmauldin.com/outsidethebox/%20The%203-D%20Hurricane%20and%20the%20New%20Normal, Gary Schilling's 5 part series on Bloomberg "Why China's Heading for a Hard Landing" & Stratfor's The Importance of China's Rising Middle Class)Reading those along, one can only decide to target Africa and perhaps Middle Eastern markets and eschew all others.  Clearly not a sensible strategy for the long-term (demographic market impact time frame) much less the short term.  But it is an interesting topic to explore.

Although not explicitly data to base exporting decisions upon, Schilling notes that the "wages and ages" issues in China are already leading to outsourcing of manufacturing to Vietnam and a likely peaking of the labor force in 2014.  If you are eager to follow the crowd and enter the Chinese market because of it's certain and insatiable domestic demand.....maybe it's worth digging a little deeper first.  It may still make sense, or it may not, but it shouldn't be reflexive.

I love GapMinder.org and particularly it's graphing tools to explore demographics.  (especially this one.)

Important Consideration


Should you base your plan on it?  Of course not.  But to ignore trends and projects, using only today's snapshot, of any factor (demographics, income, trade surplus, currency valuation, political trends, etc.) is folly.  A solid plan (the sort that Consilium Global Business Advisors develops using it's unique phased Method) will identify important planning variables, acknowledge their relevance in planning, and accommodate plan revision as those evolve.