Spotting trends

The essentials

A trend is a general direction of change in the market, society or technology that lasts for a fairly long time. Entrepreneurs who spot trends early can design products and services that will be in demand as the trend grows. A fad, in contrast, is a short-lived craze that rises quickly and fades quickly. Building a long-term business on a fad is risky.

Common areas in which trends appear:

• Economic trends: rising incomes, growth of credit, digital payments.
• Social trends: health and fitness awareness, nuclear families, urbanisation, ageing population.
• Technological trends: smartphones, e-commerce, automation, renewable energy.
• Environmental trends: preference for eco-friendly and recyclable goods.
• Political and legal trends: policies that promote certain sectors or restrict others.

Key points

• Sources for spotting trends: newspapers, magazines, research reports, social media, trade fairs, talking to customers and observing their behaviour.
• A trend usually creates opportunities in several related businesses at once. For example, health awareness supports gyms, organic food, fitness apps and sportswear.
• Trend spotting needs both observation and analysis: is the change lasting and is it large enough?

Exam tips

• If a case describes a change that has continued for years and affects many people, call it a trend; if it is a sudden craze, call it a fad.
• Be ready to link one trend to several possible business ideas.

Common mistakes

• Confusing a trend with a fad.
• Assuming one trend gives only one opportunity; usually it opens many.