After carrying out market research, you will have found out your business is
currently at, together with finding your competitive advantages are. The best
way to do this is via PEST, SWOT and Boston Matrix models as described in
the marketing section.
The table below is a simplified model of business analysis, it is based on
all the business sections covered in this web-site, take a look at the questions
below and try to apply them to your business, go back to the main menu and look
at the different sections within this web-site:
GUIDE
Questions 1 to 11 are based on a top down strategic viewpoint to ensure
corporate strategy is based on sound logic
Questions 12 to 14 are based on departmental strategies.
Questions 15 to 17 are concerned with the appraisal of business
management.
Questions 18 to 25 are concerned with cash flow and debtor management in
the business.
Questions 25 to 26 are based on sales and purchasing.
Questions 27 to 28 are based on operations.
<= YES RESPONSES =>
QUESTION
NO
LOOKING INTO
USING
WORLD CLASS
COMMENTS
1
Does your business have clear short term objectives?
2
Does your business have clear long term objectives?
3
Are these objectives mere statements of intent? or are they
statistical targets?
4
Looking at the environment around your business, do your
managers understand what is happening?
Political
Economic
Social
Technological
5
What is your business doing in relation to your competitors
in the marketplace?
Strengths
Weaknesses
Opportunities
Threats
6
Do the managers of your business understand product
life-cycle theory? (if NO go to question 8)
Launch
Growth
Maturity
Decline
7
If your business managers are aware of product life-cycles,
do they know where your products currently are?, what are they doing about
new and declining products?
Boston
Matrix
8
How often are these strategic objectives reviewed?
Ensure
Regular
Reviews!
9
Does the business have a sound financial base from which to
support it's corporate plans?
10
Does a mission statement exist for your business?
11
Have your business managers developed a set of Critical
Success Factors by which they see the future direction of the business?
12
From the mission statement does your business have separate
strategies for it's different functions?
Production
Sales
Marketing
Quality
Finance
IT/eCommerce
Logistics
Purchasing
13
Are all these sub-strategies specific to the needs of the
business?
Business Plan
Budgets
Media Plan
14
How will these strategies be implemented, reviewed and
controlled?
15
Do your departmental managers achieve their financial
targets?
Sales
Budgets
16
Do your managers achieve these targets on a regular basis?
Look
at
Last 5
Years
Figures
17
Do your managers report back and explain variances between
target and actual targets?
18
How is your business cashflow managed?
19
Is your cashflow regularly reviewed?
20
How does the business treat debtors?
Credit
Policy
30 days
21
Do you send invoices with despatched products? or
afterwards?
22
How does the business handle it's creditor accounts?
23
How are bad debts dealt with?
24
How does the business treat creditors?
Pay after
Debtors
Give
Business
Money
60 Days
25
How does the business attract additional sales?
Do you
a clear
Sales
Strategy?
26
How does the business purchase materials?
Sales based
Stock based
Capability based
27
Do you have information regarding true business production
capabilities?
Operations
28
Does your business employ continuous improvement methods?
Operations
Manufacturing
Quality
Purchasing
You should now have a basic understanding of the status of your business.
Having found the position of your business within the
marketplace, the next step is to decide where you would like your business to be
in say a 3, 5 or 10 year time frame.
Use all your market research and identify the trends in the
marketplace, what do your instincts and those of your managers tell you as to
which direction your business should move.
Review what your competitors are doing and the state of the
marketplace in general.
Having identified where the business is, and where you would like to take it,
the next step is to look at how to achieve your strategic aim. It may sound very
easy on paper but implementing strategies is very difficult.
We can say that:
From anlaysing the business, a set of critical success factors are derived
(please see Marketing section).
From the critical success factors we should generate a mission statement
for the business.
The mission statement will become the overall aim of the business, using
such phrases as: 'The aim of our business is to generate a shared and
growing prosperity between industry, the community and maintaining the local
environment. We are in business to generate year on year increases in profit
to reward our stakeholders and the wider environment.'
From the mission statement the business will develop more precise
strategies and targets for individual sections/departments to achieve, the
goal will be for growth in output and profit maximisation with reduction in
costs for each department.
Make sure departmental strategy targets are achievable, remember Rome was
not built in one day, break your long term business objectives into smaller
yearly targets which are achievable for your business, targets which are too
hard to achieve will simply put everyone off, and decrease morale in your
business.
It will up to each departmental head, to ensure that they meet the targets
set for their individual sections.
Make sure all departmental heads are aware of the targets for their
departments.
Make sure the departmental heads tell their sub-ordinates what is required
for the coming year.
Constantly review and make changes to your corporate strategy as and when
required, make the necessary adjustments.