We continue to look into issues that we are concerned about and what we can do to help change things for the better. 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. Last week we looked at ways to find out where our business stands today. Those of you who worked on these sections will now have more information about and insight into your customers and competitors. You may have found out that you don’t know much about who your clients are at all.
Sometimes the demand for your products is higher than usual, but for no apparent reason. You may also not foresee any expected developments in the market for the next few years and need to know how to respond to that. Maybe you realised that there are quite a number of other businesses in the same sector. Instead of trying to find out more about them, and what their strengths are, perhaps you are avoiding them. It is important to know what your market share is, who your main clients are and what the competition does to improve their sales. Marketing is an important part of your business strategy and the sales people in your business must have substantial information about your (potential) customers.
Next we will look into the products of the business and the employees.
The business and its products:
1. What products or services does your business provide? List them. Are your products and services different from the competition?
2. Is there a way of differentiating your products and services more, adding value for the customers?
3. Would this allow you to charge higher prices than the competition?
4. How do you price your products and services? How are rates calculated? What are customers happy to pay for and what not?
5. What is the relative profitability of your products and services?
6. Do you have a good mix of products or do you have too many different items?
7. Are you a market leader or a market follower?
8. How do you identify new opportunities for new products and services?
9. What is your “Unique Selling Point”, meaning those things that make it particularly attractive to the market?
The business and its employees:
1. What training or development programs do your workers follow? List them.
2. What personal development opportunities do your workers see within the business?
3. What are the employees’ turn-over figures for the business? How does this compare with the competition? Is the situation improving or not? What are the costs of employees’ turn over? Consider each group of workers separately and try to look for some of the least obvious costs.
4. What performance assessment system do you have in place? How is good performance identified and rewarded?
5. Is communication between departments and with management encouraged? How?
6. Are employees encouraged to make suggestions for improvements of the services that the business provides? Or for cost saving?
7. How do you rate the employees’ morale? How do they rate in terms of team spirit, motivation, belonging, identification with the business and commitment?
8. Do you have a policy on quality assurance? Do the employees understand how this works in practice and what standards and systems are applied?
When you have completed these sections as well, then you will have gathered a mass of information about the current state of affairs of your business. Next you will need to analyze all this information and match this with the main objectives of the business. You will summarise it, review it and mark relevant points as internal strengths or weaknesses and external opportunities and threats, i.e. make a SWOT analysis.
Next week we will see how to make this SWOT analysis and how this will clearly identify the resources you have available and the external threats facing the business. You will need to consider the implications each item in the SWOT analysis carefully and make a beginning with identifying appropriate strategic options for the future.