The past few weeks we have been looking into issues that we are concerned about and whether we can have some influence to change things around. There are issues within our so called circle of concern and there are issues within our smaller circle of influence. If your circle of concern is big and your circle of influence is small, chances are that your life and business are at the mercy of your external environment. Your situation is dictated by other people, circumstances and factors and you have a lot to worry about. The point is to realize how big your circle of concern and your circle of influence are in relation to each other and ask yourself what to do to enlarge your circle of influence to push towards your circle of concern. In other words, make up your mind about the issues that you are concerned about, decide whether or not you want to do something about it and subsequently work on enhancing your influence on the issue. If you come to the conclusion that an issue is not for you to have any influence over, it may be better to stop being concerned about it at all. Instead focus on what you can have a (growing) influence over. We then moved on and saw that the management of our business can be classified into 5 basic aspects: strategic management, product management, human resources management, financial/administrative management and marketing. Next we began looking into strategic management issues of concern to see how we can indeed have an influence over the way our business is developing and the direction it is moving into.
If you made an effort to try and answer some of the questions of last week in relation to the context and resources of your business, you will have a basic idea about what your most important activities are, who your main clients are and what your image is. You will also have a better idea about how your business is organised and what competencies are missing. You are on the way finding out where you are now. Later in your strategic planning you will define where you want to be and how you will get there. You may have found out, that apart from attending to your core business, you find yourself engaged in quite a few side activities. Managing these side activities in fact demands a lot of time, energy and resources from yourself and his workers. As a result there is less time for the main business than necessary. There is a lack of focus in his business. The image you are thus creating is not so encouraging. What others may say about you is that you are in all sorts of things and they may wonder if you know what you are doing. You may have also found out that your workers don’t really know what is expected from them. You never made job descriptions and expected results are not defined. They work hard, but not necessarily towards the same goals. You may also not really know what the financial situation of your business is. The accountant maintains the financial records alright, but is not able to summarise the information for you to have a good insight and make decisions accordingly. The business is not organised in an efficient and effective way, while some essential skills are missing.
Next we will look into a number of questions that will help you get more information and insight into your customers (c) and the competition (d).
c. The business and its customers:
What is the size of your share of the market in your business sector? Define the size of your market share in terms of numbers of customers or financial value.
Can you divide the market into distinct market segments? For example can you divide customers easily into groups like age, background, geographic location, gender? If so, list them.
What factors influence demand in each of the market segments?
Are there any cycle patterns in the workload for the business for example seasons, fashion, trends?
Over the past year, which new clients did you get and which clients did you lose? Find out how new customers come to know your business and why customers leave. You will need a record of who your clients are.
How do you market your products and services? How does this work? What else could be done?
What developments are expected in the market over the next few years? What are the future trends and how will this affect your business? What new services might be needed?
d. The business and the competition:
Who are the main competitors for each of the market segments you identified above?
What are your impressions of the competitors’ image, size, range, distribution, strengths, and weaknesses?
Who are the most successful competitors and why are they successful?
Are there likely more competitors to enter the market? Who are they?
Why do clients come to you instead of the competition? Consider your image, price, service, marketing, location. Ask your clients.
Why is the business successful? What is the competitive advantage?
What would be possible threats for future success?
It is important that you don’t try to find the answers to these strategic questions all by yourself. Choose some of your key workers and encourage them to come up with their own answers and discuss each other’s responses together. This will deepen and enrich your insights and enhance the teamwork in your business as well. Don’t try to pull the cart all by yourself. Remember that Together Everyone Achieves More = TEAM. You will also need to get information from your customers. A customers’ record, indicating their names, address, telephone, email and some space for their remarks will be very helpful. A small questionnaire inquiring about what it is they are looking for, what their opinion of the business is, how they see the quality of services, price and location will help you get insight in your competitive advantage or disadvantage.
I encourage you to continue getting the information you require to know where your business stands, in order to be able to plan for the future. Next we will look into the business products, its stakeholders and the workers.