Supply Market Analysis: Basics, Process, Advantages

Key Takeaways:
Have you ever wondered if there’s a way to proactively manage supply chain risks or ensure you select reliable suppliers who won’t disappoint you in the future?
The good news is you don’t have to wonder anymore.
The answer is yes—it’s possible thanks to supply market analysis.
Through this market dynamics evaluation process, you get all the information you need to develop smarter procurement strategies.
The result?
Fewer disruptions, more cost savings, and a supply chain that’s agile and resilient.
So, let’s explore how it all works, how to do it right, and the benefits this process offers.
First, let’s see what exactly you stand to gain from supply market analysis.
One of the most important aspects of supply market analysis is evaluating suppliers’ capability and capacity.
This entails researching their
As a result of this thorough assessment, you become much better equipped to make the right decision when selecting vendors.
Matt Palackdharry, Founder of the SaaS startup consultancy Kinetic Talents, explains that without supplier intelligence, you’re essentially operating blind.
Illustration: Veridion / Quote: TealBook
After all, this kind of information fuels many procurement activities and influences billions of dollars in business decisions
Ultimately, this empowers organizations to stay agile when supply chains face disruptions.
This is where supply market analysis comes into play.
It gathers and interprets relevant data, evaluating key market players, their capabilities, and their adaptability to changing market conditions.
Whether you’re looking for leaders in innovation or simply the most cost-effective partners, market analysis is your starting point.
Take it from Samsung.
Samsung takes supplier analysis very seriously, rigorously assessing them on multiple levels.
Here are their key assessment items:
Source: Samsung
This vigilance certainly pays off.
In the company’s latest annual review, 71% of its vendors earned outstanding ratings, with just 2.2% flagged for improvement.
That’s proof of how game-changing strategic supplier selection can be.
By choosing partners who tick every box, Samsung not only strengthens its supply chain but also enables sustainable growth.
And it all begins with a thorough supply market analysis.
Supply market analysis gives you a deeper understanding of how the market operates, where it’s headed, and key trends shaping its future.
Armed with this knowledge, you can quickly spot looming risks, like price volatility or geopolitical tensions, and develop strategic contingency plans that drive resilience and agility.
The 2023 Protolabs report serves as a reminder of why such proactive risk management matters more than ever, showcasing the variety of disruptions affecting businesses.
Illustration: Veridion / Data: Protolabs
These challenges make one thing clear: staying ahead of market and supply chain dynamics is a must.
Luckily, with supply market analysis, it’s much easier to find out where vulnerabilities lie.
For instance, understanding supplier concentration or geographic dependencies helps identify potential risks stemming from natural disasters, geopolitical issues, or economic instability.
Just ask Walmart, a retail giant that leverages supply market analysis to forecast demand and mitigate disruptions.
The company uses data from various sources—like customer interactions, weather patterns, social media trends, and macroeconomic indicators—to obtain a complete picture of the state of the market.
Parvez Musani, SVP of End-to-End Fulfillment for Walmart Global Tech, explains what happens next:
Illustration: Veridion / Quote: PYMNTS
This helps Walmart stay prepared for almost anything, from natural disasters to unexpected shifts in customer behavior.
According to Musani, this not only boosts their agility but also allows them to consistently deliver on customer expectations, even during challenging times:
“Customers who can count on you during challenging times will reward you with their continued business.”
All in all, in today’s unpredictable world, where adaptability is the only way to go, supply market analysis serves as an invaluable tool.
It empowers you to look beyond what’s happening now to what might come next, helping you stay prepared, flexible, and—above all—resilient.
Supply market analysis changes the game when it comes to cost optimization by providing actionable insights into market conditions, supplier capabilities, and pricing dynamics.
For procurement professionals, who are always under pressure to cut costs, this can be a true lifesaver.
In fact, the 2023 Amazon Business survey reveals that cost reduction just might be even more important than mitigating risks in procurement.
As it turns out, 61% of businesses consider finding ways to save money and staying within budget as their top purchasing priorities.
Illustration: Veridion / Data: Amazon Business
Supply market analysis makes these goals much more attainable.
For example, analyzing market trends enables businesses to predict price fluctuations.
This, in turn, enables them to time purchases when prices are low, or stabilize contracts during favorable market conditions.
Major companies like PepsiCo, Danone, and McDonald’s found another way to drive cost savings through supply market research back in 2019.
They used data from social media, online forums, product review websites, and other data sources to understand customer needs and preferences.
Then, using what they learned, they’d align procurement with consumer demand.
This helped them avoid wasting resources on developing or sourcing unwanted products.
Elaine Rodrigo, Danone’s Head of Consumer Insights and Strategy at the time, summarized it perfectly:
Illustration: Veridion / Quote: Financial Times
But the financial benefits don’t stop there.
The supply market analysis platforms these companies use have replaced traditional tools such as consumer surveys, focus groups, and retail sales data, which are often cost-prohibitive.
Therefore, proper market research doesn’t just boost growth and customer satisfaction.
It also eliminates ineffective strategies and outdated methods that only waste your money.
It’s a clear win-win scenario.
By now, you must be wondering how exactly to perform supply market analysis.
The entire process is quite straightforward—just follow these five steps:
Source: Veridion
First, clearly define your goals and needs.
Are you aiming to identify competitors, slash costs, or diversify your suppliers?
Pinpointing your objectives from the get-go will ensure more focused research down the road.
Once your destination is clear, it’s time to start gathering relevant data.
Keep in mind that market intelligence consists of many different components, including:
Supplier Intelligence | Suppliers’ financial stability, ESG performance, quality standards, scalability, and regulatory compliance. |
Market Intelligence | Overall market dynamics, including size, growth rate, trends, pricing fluctuations, and competitor information. |
Competitive Intelligence | Competitors’ strengths, weaknesses, and market positioning. |
Price Intelligence | Factors influencing price changes, such as supply-demand dynamics, production costs, economic conditions, or seasonal variations. |
Product Intelligence | Development strategies, pricing, and performance metrics of products. |
For more details on these elements, feel free to check out our dedicated article on key components of market intelligence.
After you have collected your data, analyze it to uncover key market drivers.
This may include:
From there, you’ll also be able to pinpoint risks (like geopolitical tensions or price volatility) and opportunities (such as emerging suppliers or cost-saving technologies).
Finally, it’s time to transform your findings into actionable insights.
In your final report, be sure to include everything you’ve learned along with recommendations for future actions.
These may involve:
By following these steps, you’ll be making data-driven, strategic procurement decisions in no time.
But the question is: how exactly do you gather all this information?
Gathering market intelligence and performing supply market analysis without the right tools can quickly get overwhelming.
Fortunately, there are numerous solutions out there developed to simplify this process.
In this article, we’ll highlight a few of them.
First up, market intelligence platforms like Gartner and Statista are ideal for overall market overviews.
These advanced systems aggregate data from various sources, including websites, social media, and sales records, and then analyze it for patterns and trends.
As such, they provide a deep understanding of your customer’s needs, behaviors, and preferences, while also revealing your competitors’ strategies.
You can see some of Gartner’s capabilities below:
Source: Gartner
Another option to consider is cost analysis tools such as CostPerform.
As the name implies, these tools specialize in financial and price intelligence, tracking cost flows, identifying cost origins, and pinpointing cost drivers, as shown below.
Source: CostPerform
Some of them also enable what-if analysis to support more strategic planning.
For example, when evaluating the introduction of a new product or service, you could ask the system: how will this affect costs, workloads, and profits?
Finally, it’s important to mention supplier data platforms like Veridion.
Veridion leverages AI and machine learning to continuously scan the internet and provide detailed information on millions of suppliers and products worldwide.
Source: Veridion
No matter what your specific goals and needs are, Veridion delivers.
Want to proactively manage supplier risk?
Veridion delivers decision-grade data to mitigate third-party risk.
For example, you can analyze the geographical distribution of your suppliers to identify political, environmental, or regulatory risks.
Looking for new, reliable suppliers?
Thanks to Veridion’s newest product, Scout, this has never been easier.
Powered by Veridion’s Source of Truth Database, Scout lets you find suppliers based on any criteria—all by using natural language.
No need for technical expertise or time-consuming internet searches.
Scout delivers precise, actionable results with unparalleled speed and accuracy.
You can learn more about Scout in the video below:
Source: Veridion on YouTube
And if you want to be among the first to try out this game-changing tool, feel free to request early access to Scout’s beta version.
Eager to try out supply market analysis yourself?
We don’t blame you.
With all the advantages it offers, you’d be remiss not to take advantage of it.
Just remember to always rely on trustworthy data sources during your research.
For this, dedicated market research tools are your best bet—they typically incorporate rigorous verification processes to ensure your data is both accurate and precise.
Plus, they save valuable time by delivering key insights almost instantly, empowering you to make well-informed decisions with ease.
No matter how you choose to proceed, one thing is certain: the power of supply market analysis is a game-changer you can’t afford to ignore.