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. |
The business world is full of ups and downs. It is like unstable waters that you never know the direction of its flow. Many people the world over depend on business activities for survival. In fact the economies of all nations depend largely on the activities of businesses. Without business, there will be no economy, without economy there will be no nation, without nations, there will be no existence, without the existence of all of us, there will be no world! Business is life! Business begat money that the entire world depends on. There is no human being under the sun that has never use money or will never use money, which largely accrue as a result of business activities. Becoming a business consultant is a huge money making venture to be in. This is because, everybody as well as businesses needs you to survive or make informed decision. This is an exciting area to be, don’t you think so? You are look upon like a semi-god, you are envied by your peers, you are appreciated by the peop...
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