Effect not Equal to Cause when Planning a StrategyWhen reviewing a business it is essential to cut through the symptoms of problems and reach the underlying causes. Questions which can assist in revealing the real causes include: · "What stopped the business from?" · "What caused the cause of?" · "Why didn't the business achieve a 25% return?" By way of an example consider why this company may be unable to increase its market share: Because it cannot penetrate major customers, because its product range is too narrow because the company doesn't have the capability to produce additional products, because of shortcomings in R & D because of a lack of expertise and resource because R & D is not an immediate priority because of a lack of profits because of a high interest burden because the company is over-reliant on borrowings because the shareholders won't/can't raise additional permanent capital. The moral in this case is that there are no major customers due to under-capitalization! SWOTs - Keys to Business StrategiesHaving built up a picture of the company's past aims and achievements, the all-important SWOT (strengths, weaknesses, opportunities and threats) analysis can commence. Strengths & WeaknessesStrengths and weaknesses are essentially internal to the organization and relate to matters concerning resources, programmes and organization in key areas. These include:
If a start-up is being planned, the strengths and weaknesses are related mainly to the promoter(s) - their experience, expertise and management abilities - rather than to the project. The objective is to build up a picture of the outstanding good and bad points, achievements and failures and other critical features within the company. Threats & OpportunitiesThe external threats and opportunities confronting a company, can exist or develop in the following areas:
Against an uncertain and shifting background, the objective must be to identify and prioritize the key SWOTs in a one-handed manner. Develop Business StrategiesOnce the SWOT review is complete, the future strategy may be readily apparent or, as is more likely the case, a series of strategies or combinations of tactics will suggest themselves. Use the SWOTs to help identify possible strategies as; Build on strengths, Resolve weaknesses, Exploit opportunities, and Avoid threats. The resulting strategies can then be filtered and moulded to form the basis of a realistic strategic plan. |
Simple & Short Strategic PlansNotwithstanding that "battles are often lost for want of nails", a company rarely succeeds or fails for minor or trivial reasons. The causes are usually substantial and are often self-evident, at least to an outsider. For example, the business was completely over-borrowed; management was weak; a major new product opportunity was identified; legislation changed; a major competitor went bust or expanded; the company never reinvested. It should be possible in the course of a few pages to set down the main elements of a business's vision, mission, values, objectives, goals, strategies, SWOTs etc. The compilation of a short report along these lines is likely to prove much more difficult than a lengthy dissertation which mixes up details and principles, and confuses the broad picture. Independent advisers or non-executive directors can play a valuable role in this process because they can readily adopt the role of devil's advocate and also bring external knowledge and expertise to bear. |
Fear is a state of confusion. It a state of hopelessness. Fear cripples, fear destroys. It rendered a strongman weak. It rendered potent man impotent. It makes a rich man poor. Fear kills! There was a Youngman, he loves cooking so much, so he decided and picked a job with a restaurant in his city. It was a big restaurant that offers late services. His job was to cook soup on a daily basis from 8am to 5pm. He loves meat so much. Whenever he was preparing soup for the restaurant, he will steal pieces of meat from the soup. He did this on daily basis. One day, he went to work very early and found chickens in the restaurant store. He cannot remember when last he had eaten chicken and chicken happens to be his best meat. He look around to see if anybody was around. There was nobody in sight. He look to the left, right and back, there was no body watching him. He caught one of the chicken, twist its neck, hide it under his clothes and...
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