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Strategic Planning Framework – Part 4

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Strategic Planning Framework – Part 4

In Strategic Planning Framework  – Part 1 we discussed:

  • Strategic Plan – structure
  • Frameworks for Strategic Plans – 8 useful examples
  • SWOT Analysis in detail

In Strategic Planning Framework – Part 2 we discussed:

  • Strategic Mapping
  • Balanced Scorecard

In Strategic Planning Framework – Part 3 we discussed:

  • Issues Based Strategic Planning
  • Objectives and Key Results

In this article, we are completing this series of discussions with a focus on:

  1. Porter’s five forces
  2. Gap Analysis
  3. PEST analysis

Porter’s five forces

Porter’s Five Forces Framework is a method for analysing competition of a business. It draws from industrial organisation (IO) economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness (or lack thereof) of an industry in terms of its profitability. An “unattractive” industry is one in which the effect of these five forces reduces overall profitability. The most unattractive industry would be one approaching “pure competition”, in which available profits for all firms are driven to normal profit levels. The five-forces perspective is associated with its originator, Michael E. Porter of Harvard University. This framework was first published in Harvard Business Review in 1979.[1]  Porter’s Five Forces

  1. Competitive Rivalry

The first of Porter’s Five Forces looks at the number and strength of your competitors. How many rivals do you have? Who are they, and how does the quality of their products and services compare with yours?

  1. Supplier Power

Supplier power is determined by how easy it is for your suppliers to increase their prices. How many potential suppliers do you have? How unique is the product or service that they provide? And how expensive would it be to switch from one supplier to another?

  1. Buyer Power

If the number of buyers is low compared to the number of suppliers in an industry, then they have what’s known as “buyer power.” This means they likely find it easy to switch to new, cheaper competitors, which can ultimately drive down prices.

  1. Threat of Substitution

This refers to the likelihood of your customers finding a different way of doing what you do. For example, if you supply a unique software product that automates an important process, people may substitute it by doing the process manually or by outsourcing it.

  1. The threat of New Entry

Your position can be affected by people’s ability to enter your market. If it takes little money and effort to enter your market and compete effectively, or if you have little protection for your key technologies, then rivals can quickly enter your market and weaken your position.

How to Use Porter’s Five Forces Model

Porter’s Five Forces Model can help you to analyse the attractiveness of a particular industry, assess investment options, and measure competition intensity.

To use the model, start by looking at each of the five forces in turn, and how they apply in your industry. Ask yourself the following questions:

  1. Is rivalry between competitors intense or do you tend to retain customers relatively easily?
  2. Do you have lots of suppliers to choose from or do you rely heavily on a small group of suppliers?
  3. Is buyer power high or low?
  4. Would buyers find it easy to substitute your product or service?
  5. Do new competitors find it easy to enter the market or is it difficult?

After you’ve considered these questions, write down each of the five forces, and summarise the size and scale of each using your findings. 

Finally, think about how your analysis will likely impact you. 

If you find yourself in a structurally weak position, the model can help you to think about what you can do to move into a stronger one.

Gap Analysis

Gap analysis identifies gaps between the optimized allocation and integration of the inputs (resources) and the current allocation level. This reveals areas that can be improved. Gap analysis involves determining, documenting and improving the difference between business requirements and current capabilities. Gap analysis naturally flows from benchmarking and from other assessments. Once the general expectation of performance in an industry is understood, it is possible to compare that expectation with the company’s current level of performance. This comparison becomes the gap analysis. Such analysis can be performed at the strategic or at the operational level of an organisation. Gap Analysis

Benefits and Challenges of a Gap Analysis

Gap analyses are a frequently-used tool because of the many benefits they can bring to the companies and organisations that implement them. These benefits include the following:

  • Insight into areas that needs improvement, such as efficiency, products, profitability, processes, customer satisfaction, performance, participation, and competitive advantage
  • Ensuring that project requirements have been met
  • Finding areas of weakness and shortcomings to address
  • Uncovering differences in perception vs. reality
  • Providing information to guide decision-makers, which can lead to better decisions
  • Finding the best places to deploy resources and focus energy
  • Prioritisation of needs
  • If performed well, the results of gap analysis are clear and easy to understand

While valuable, gap analyses are not perfect. Some challenges related to the gap analysis process include the following:

  • Successful completion depends on the knowledge and persistence of the people involved in the process.
  • While the process may expose some causes, if it doesn’t go deep enough, the proposed resolutions will not address the real root cause or can miss the complexities behind them. 
  • The analysis can be inaccurate, as the ground is constantly shifting 

How to Perform a Gap Analysis

In larger organisations, the gap analysis process generally falls under the responsibility of business analysts, project managers, process improvement teams or management. But with a little training and a well-designed template, anyone can work through the process.  We at Balanced Business Growth can assist you with tools and processes.  

The basic steps for performing a gap analysis are explained below.

  1. Identify the area to be analysed and identify the goals to be accomplished.
  2. Establish the ideal future state. If everything worked according to plan, where would you be?
  3. Analyse the current state. What causes contributed to the targets being missed? For example, were the workers not trained well enough? Was the production area short-staffed? Were required materials consistently available? Did the layout of the production area slow things down?
  4. Compare the current state with the ideal state. How far from the target was actual production? What is the shortfall – the gap?
  5. Describe the gap and quantify the difference. After researching the potential causes, outline the contribution of each to the gap. 
  6. Summarise the recommendations and create a plan to bridge the gaps. Decide what needs to be changed and determine what steps need to be taken to fix things. 

PEST Analysis

PEST analysis (political, economic, socio-cultural and technological) describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. It is part of an external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macro-environmental factors to be taken into consideration. It is a strategic tool for understanding market growth or decline, business position, potential and direction for operations. PEST Analysis

A PEST analysis is a process for identifying the political, economic, social and technological factors that affect supply chains – both locally and globally.

Using a PEST analysis tool will give you a better understanding of the environment in which your industry operates, and the external factors (now and in the future) that may impact the production of your goods or services. Importantly, you can carry out a PEST analysis on the buyer – this will give you insights into their needs and requirements.

The 4 factors of a PEST analysis

Let’s look at each factor:

1. Political

Many organisations are impacted by political or politically motivated factors. For example, government policy, political instability, corruption, foreign trade policy and trade restrictions, labour laws, environmental laws, or copyright laws might all affect a company’s strategic planning. When evaluating the political aspect of PEST analysis, you should ask: 

What governments, government policies, political elements, or groups could benefit or disrupt our success?

2. Economic

For businesses, economic factors can prove beneficial or detrimental to success. For example, industry growth, seasonal changes, labour costs, economic trends, growth rates, exchange rates, unemployment rates, consumers’ disposable income, taxation, and inflation each carry a sizable potential impact on the business. When evaluating the economic aspect of PEST analysis, you should ask: 

What economic factors might impact our company’s pricing, revenue, and costs?

3. Social

Social attitudes, trends, and behaviours might influence your business, customers, and market. For instance, attitudes and beliefs about money, customer service, work, and leisure, and trends in lifestyles, population growth, demographics, family size, and immigration can heavily impact a business. When evaluating the social aspect of PEST analysis, you should ask: 

How do our customers and potential customers’ demographic trends and values influence their buying habits?

4. Technological

Technology can affect your organisation’s ability to build, market, and ship products and services. For example, legislation around technology, consumer access to technology, research and development, and technology and communications infrastructure impact most businesses and organisations. When evaluating the technological aspect of PEST analysis, you should ask: 

How might existing or future technology impact our growth and success?

How do you run a PEST analysis?

Step 1: Brainstorm

To get started, you need to brainstorm the various PEST factors — political, economic, social, and technological — that might impact your business. You can hold a large brainstorming session or invite your teammates to brainstorm themselves and come prepared with ideas. 

Ask each team member to come up with a few ideas for each of the 4 factors. 

Step 2: Rank

With these ideas in place, it’s time to rank these factors based on their expected level of impact on the organisation. If there are significant discrepancies in ratings, discuss those! Allow people the time and space to change their minds. 

Adjust the ranking as your teammates provide more input.

Step 3: Share

Now it’s time to share your completed PEST analysis with stakeholders. One of the main purposes of a PEST analysis is to keep shareholders informed of various external factors that can impact the business, so presenting your ideas in an intuitive and easy-to-understand way is a critical part of the process. 

Step 4: Repeat

Finally, your organisation needs to maintain awareness of these various factors and plan to accommodate them in the future. That means repeating the PEST analysis regularly to keep a tab on these factors and to keep your strategies and processes up to date.

Why do a PEST analysis?

PEST analysis helps you evaluate how your strategy fits into the broader environment and encourages strategic thinking. By conducting a PEST analysis, you’ll be better prepared to plan initiatives for marketing, product, organisational change, and more that will accommodate and account for these potential environmental factors. The PEST analysis can help function as a roadmap for your business, detailing potential pitfalls, roadblocks, and opportunities for growth.

Articles have covered the other aspects of your Strategic Framework, including:

  1. SWOT Analysis
  2. Strategy Mapping
  3. Issues based strategic planning
  4. Balanced Scorecard
  5. Objective and Key Results
  6. Porter’s five forces
  7. Gap Analysis
  8. PEST analysis

At https://balanced-business-growth.com/ we provide the expertise to work with you to build your Strategic Plan. Once the Strategic Plan is built we then assist you to deliver the identified benefits.  

Strategic Planning Framework – Part 3

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In Strategic Planning Framework  – Part 1 we discussed:

  • Strategic Plan – structure
  • Frameworks for Strategic Plans – 8 useful examples
  • SWOT Analysis in detail

In Strategic Planning Framework  – Part 2 we discussed:

  • Strategic Mapping
  • Balanced Scorecard

In this article, we are discussing Issues based Strategic Planning and Objective and Key Results

What is a Strategic Issue? A Strategic Issue is, first of all, an issue – an unresolved question needing a decision or waiting for some clarifying future event. 

Secondly, it is strategic and has a major impact on the course and direction of the business. It probably relates directly to one or more of the fundamental “Three Strategic Questions”:

  1. What are we going to sell?
  2. To whom are we going to sell it?
  3. How will we beat our competition?

Strategic Issues lie right at the heart of the business. Correspondingly, the process step dealing with Strategic Issues lies right at the heart of Strategic Planning.

Issues Based Strategic Planning has a process:

  1. External/internal assessment to identify Strengths, Weaknesses, Opportunities and Threats (SWOT). We provide more detail on this process in Strategic Planning Framework – Part 1
  2. Strategic analysis to identify and prioritise major issues/goals
  3. Design major strategies (or programs) to address issues/goals
  4. Design/update vision, mission and values
  5. Establish action plans
  6. Record issues, goals, strategies/programs, mission and vision, and action plans
  7. Develop the yearly Operating Plan document (from year one of the strategic plan)
  8. Develop and authorise the Budget for year one 
  9. Conduct the organisation’s year-one operations (make it happen)
  10. Monitor/review/evaluate/update Strategic Plan document (continuous improvement)

Objective and Key Results

Objectives and key results (OKR, alternatively OKRs) is a goal-setting framework used by individuals, teams, and organizations to define measurable goals and track their outcomes. The development of OKR is generally attributed to Andrew Grove who introduced the approach to Intel during his tenure there.[when?] John Doerr published an OKR book which is called “Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs” in 2017.[1]  OKR

Define your goals and make a plan to measure the goals along the way. Setting OKRs propels your team to achieve more than you ever thought possible while continuously learning.

OKR – The process:

Preparation

Start by creating a collaboration document, like a Trello board. You can use the template we can provide, if you’d like, or create your own.

As a team, decide what period of time you’re setting OKRs for. Align that period to what fits in with your normal company cycles.

Share any information that will provide background information to help inform your OKRs with your team before the meeting. This could include broader company goals, project roadmaps, customer metrics, customer feedback, or previous quarters’ OKRs.

Set the Stage

Ask the team to remember the following before starting the meeting:

  • It’s important to think of the value we want to achieve for our customers, clients or people we serve.
  • The team should consider how to measure success towards achieving that value.

Choose Objectives

Pose the question:

 “Where can we bring the most value to our customers in the upcoming quarter?”

Have the team brainstorm objectives by adding them to the collaboration document. Group similar objectives together, then summarise your ideas into 1-3 objectives.

Set Key Results

For each Objective, decide on a few Key Results that, when reached, would confirm you’ve achieved the objective. Ensure the team is choosing metrics that demonstrate the results of the work the team has done.

Assign Owners

Assign each key result (KR) to an owner on the team. While the KR belongs to the whole team, the owner is responsible for tracking the team’s progress.

Review

Review your objectives and key results and ask whether they’re ambitious enough. Balance setting achievable goals with creating enough of a challenge to keep the team motivated.

Ensure the KRs can be scored periodically on a sliding scale from 0 to 10.

3 = We needed to do better

7 = We came very close

10 = We hit the mark. Harder objectives could be considered moving forward.

Future articles will cover the other aspects of your Strategic Framework:

  1. SWOT Analysis
  2. Strategy Mapping
  3. Issues based strategic planning
  4. Balanced Scorecard
  5. Objective and Key Results
  6. Porter’s five forces
  7. Gap Analysis
  8. PEST analysis

At https://balanced-business-growth.com/ we provide the expertise to work with you to build your Strategic Plan. Once the Strategic Plan is built we then assist you to deliver the identified benefits.  

What are Google Core Web Vitals and Why Are They Important to Your Business Online?

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Google Core Web Vitals are a set of three specific metrics which Google considers very important in the loading of any page on the web.

Google is rolling out Core Web Vitals measurement across the web in the second half of 2021.

It is believed that a website’s ranking in Google search results will be affected by it’s performance versus Google’s Core Web Vitals metrics.

Google is commited to helping site visitors have a better experience when visiting web pages.

Please note that I say ‘web pages’ and not ‘websites’. The reason for the distinction is that the page a searcher has clicked through to might be one of your internal pages rather than your homepage. Chances are this is a high ranking page and it may even be your ‘money page’. The one that is driving many of your sales or warm leads.

Web pages which are slow to load and respond to user interaction create a negative experience for a site visitor. Your site visitors should be able to quickly view, understand and then engage with your website in a meaningful way.

The 3 Core Web Vitals Metrics

The three different metrics in Google Core Web Vitals are as follows;-

Largest Contentful Paint (LCP)

LCP measures how long your web page takes to load from the perspective of an actual user.

What this means in reality is Google are measuring the load time of the web page’s content above the fold (think of before the fold as top section of a folded newspaper on a newsstand with the banner and the headline on it) rather than the entire web page.

Largest Contentful Paint is primarily concerned with what really matters to your site visitor when they click through i.e. how long it takes to view and interact with the page’s content.

Google’s metric requires that LCP should occur within 2.5 seconds of the moment the page first starts to load.

Factors that will effect LCP include the response time of your web host’s server, render blocking scripts (these are scripts that stop the content being shown on the screen until they have loaded), size and complexity of the website’s stylesheet, loading of external fonts, and the file size of any images that must be loaded.

Placing an autorun video at the top of the page is suicidal for LCP.

First Input Delay (FID)

First Input Delay measures the time to user interactivity on your web page or the time it takes for a user to actually be able to first interact with the content on your page.

This might include actions such as clicking a button or a link in the menu, entering data into a form or interacting with content such as accordions or interactive maps etc etc…

FID goes beyond the visual, measuring the time it takes for users to be able to perform an action on your page.

To meet Google’s preferred metric, your web pages should return a FID of 100 milliseconds or less.

Cumulative Layout Shift (CLS)

Ever loaded a web page where the page is loading and you are about to click a link and then the link jumps down and you click completely something else? I hate that!

Well, it turns out Google doesn’t like it either.

CLS is a Google metric that measures how visually stable the above the fold content is on a page as it loads.

Google’s metric suggests a CLS of less than 100 milliseconds.

What Happens if a Web Page’s Core Web Vitals Do Not Meet Google’s Metrics?

As with many things Google does in the world of SEO, the effect of not hitting their recommended targets is not clear and defined.

Unusually though, Google has said that poor Core Web Vitals metrics can result in poorer rankings.

Understanding what Google is consistently trying to achieve in the area of improving the user experience on the web would suggest that Core Web Vitals will have a marked effect on your web page’s rankings so it is certainly worth checking out and fixing.

If your competitors are meeting the metrics and your site isn’t then they have a decided advantage on you all other things being equal.

How Do We Test Our Web Page Core Web Vitals Performance?

There are quite a few free (and more paid) ways to check out how your web pages perform versus Core Web Vitals.

The Google Page Speed Insights utility is a great resource that will not only allow you to test your pages, however, will give you detailed results and recommendations as to the issues.

The Web Page Test utility is also a great resource for Core Web Vitals testing.

If you have a free Google Search Console account then this can give you detail as to how multiple pages on your website are performing historically.

Additional Reading on Core Web Vitals

If you are looking to go to the next level of knowledge and testing on Google Core Web Vitals then we recommend this page by Backlinko which offers a very informative (but readable) summation.

Strategic Planning Framework – Part 2

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In Strategic Planning Framework  – Part 1 we discussed:

  • Strategic Plan – structure
  • Frameworks for Strategic Plans – 8 useful examples
  • SWOT Analysis in detail

In this article, we are discussing Strategic Map and Balanced Scorecard

What is a Strategy Map?

A strategy map is a diagram that is used to document the primary strategic goals being pursued by an organisation or management team. It is an element of the documentation associated with the Balanced Scorecard, and in particular, is characteristic of the second generation of Balanced Scorecard designs that first appeared during the mid-1990s. The first diagrams of this type appeared in the early 1990s, and the idea of using this type of diagram to help document Balanced Scorecard was discussed in a paper by Drs. Robert S. Kaplan and David P. Norton in 1996.[1]  Strategy map – Wikipedia

How to Create a Strategic Map

Step 1. Define Mission, Vision, Values

That’s the direction to the drawn for your organisation. When you face uncertainty, these three will help you to make the best decisions.

Step 2. Define Four Perspectives

Finance, Customers, Internal, Innovations. You can confirm by testing that your organisation needs exactly these four. 

Step 3. Strategic Priorities

This is where you become focused.  Strategic priorities are the top-level goals; for example, these are improving product or service provided, serving clients better, improving the efficiency of operations.   

Step 4. Define Business Goals

Business Goals needs to be a cause-and-effect connection between the goals. 

Step 5. Describe Rationale

The rationale is a set of reasons why you decided to pick this specific goal. Thinking about what outcomes you wish to achieve and that will determine the rationale. 

Step 6. Define Leading and Lagging Metrics

Your business goal becomes much clearer when you define the metrics that are the leading indicators and the lagging indicators.  Firstly the lagging indicators – that is the measure of the result you want ie increased revenue.  The leading indicators are the measure of what you need to do to achieve the results you want, ie call new prospects.   

Step 7. Define Initiatives

Initiatives are the high-level action plans that collectively that explain how the strategy will be executed.

Step 8. Cascade

There should only be one top-level strategy of the organisation.  However, business units need to focus on different parts of that strategy. Create local versions of the strategy maps with more specific goals and indicators for the business. Each business unit needs to build its local version.  

Balanced Scorecard

What is a Balanced Scorecard?  

A balanced scorecard is a strategy performance management tool – a well-structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions.[1]  Balanced scorecard – Wikipedia

How to Build a Balanced Scorecard

The four perspectives of a Balanced Scorecard

Financial

The financial perspective in a balanced scorecard is potentially the most traditional of the four. You’ll want to look at return on investment, growth, fixed costs, profit, and so on.

Learning and Growth Perspective

This area examines the company’s health in terms of training employees on rapidly changing technologies, mentoring employees in a way that helps them grow and contribute, and employing the latest tools and systems to foster innovation. Responds to change is important, for example: how long it takes a team to develop a new product and bring it to market.

Business Process Perspective

It’s also important to examine a company’s internal processes to look for areas ripe for improvement by removing inefficiencies and identifying error-prone activities. Would it help the company’s strategic goal if some processes were faster or cost less?

Customer Perspective

You will want to examine your company’s activities from your customers’ or stakeholders’ perspectives. How do your customers view your activities? What are the reviews and feedback? Do you have an objective measure of customer satisfaction from surveys or other sources? 

Build Your Balanced Scorecard

Balanced scorecards are easiest to create using a template (we can provide a template if you wish).  Start with a space for all four perspectives and just add what specifically applies to your organisation.

  • Add your vision. The company’s main vision belongs in the centre of a balanced scorecard. Whichever part of your company you look at, you should always keep this goal or vision in mind.
  • Add perspectives. To create a traditional balanced scorecard, place the four perspectives in a ring around the central vision.
  • Add objectives and measures. Within each perspective define specific objectives, measures, targets, and initiatives.
  • Connect each piece. Link each perspective to the others using arrows to indicate that they’re all interconnected when it comes to achieving the company’s vision.
  • Share and communicate. Use the balanced scorecard to demonstrate how different initiatives and short-term actions are contributing to the long-term strategic objectives of the company.

A Balanced Scorecard is a valuable tool that needs to be up to date and shared with all involved parties.  

Future articles will cover the other aspects of your Strategic Framework:

  1. SWOT Analysis
  2. Strategy Mapping
  3. Issues based strategic planning
  4. Balanced Scorecard
  5. Objective and Key Results
  6. Porter’s five forces
  7. Gap Analysis
  8. PEST analysis

At https://balanced-business-growth.com/ we provide the expertise to work with you to build your Strategic Plan. Once the Strategic Plan is built we then assist you to deliver the identified benefits.  

Strategic Planning Framework – Part 1

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Definition:

Strategic planning is an organization‘s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. https://en.wikipedia.org/wiki/Strategic_planning

Strategic planning activities include meetings and other communication among the organization’s leaders and personnel to develop a common understanding regarding the competitive environment and what the organization’s response to that environment (its strategy) should be. A variety of strategic planning tools (described in the section below) may be completed as part of strategic planning activities.

The organization’s leaders may have a series of questions they want to be answered in formulating the strategy and gathering inputs, such as:

  • What is the organization’s business or interest?
  • What is considered “value” to the customer or constituency?
  • Which products and services should be included or excluded from the portfolio of offerings?
  • What is the geographic scope of the organization?
  • What differentiates the organization from its competitors in the eyes of customers and other stakeholders?
  • Which skills and resources should be developed within the organization?[1][5]

A business cannot stand still.  So if your business cannot stand still it must be going somewhere, it must have direction.  You can decide where you are going or just let change happen.  

Who needs a Strategic Plan?  

If you are not in charge of your companies direction then you don’t need a strategic plan. Whatever happens, will happen. 

If you wish to be in charge of your companies direction then you need a strategic plan.  

So, do you know what direction you are heading in?  

Great, I will attempt to help you to understand how to get there.  

The first question is:

Do I need a Strategic Planning Planning Model or a Strategic Planning Framework?

A strategic planning model is actually a collective term for a number of elements that contribute to the strategic planning process. The core components of a strategic planning model typically include:

  1. A templated structure for creating goals.
  2. Frameworks for helping you to actually decide what you want to work on.
  3. A loose structure of governance to help you manage and track your strategy.

You can think of strategic planning models as ‘templates’ into which you can drop your own ideas. In the end, you will come out with a strategic plan which is sensibly structured and gives you a clear set of actions upon which to work. 

So the answer to the question is the model includes the structure, frameworks and governance.  

Today we will focus on Frameworks.  

There are a number of very useful frameworks that each contribute to your overall strategic plan implementation with complementing strengths.  

Frameworks:

  1. SWOT Analysis
  2. Strategy Mapping
  3. Issues based strategic planning
  4. Balanced Scorecard
  5. Objective and Key Results
  6. Porter’s five forces
  7. Gap Analysis
  8. PEST Analysis

I will cover each of the frameworks in subsequent articles.  

In this article, I will cover SWOT Analysis. 

SWOT Analysis 

The SWOT analysis helps you see how you stand out in the marketplace, how you can grow as a business and where you are vulnerable. This analysis helps you identify your company’s opportunities and any threats it faces. The process takes into account both the internal and external factors your company must navigate.

Strengths and weaknesses are often internal to your organisation, while opportunities and threats generally relate to external factors. 

What are the benefits of a SWOT analysis?

What makes SWOT particularly powerful is that it can help you uncover opportunities that you are well placed to exploit. By understanding the weaknesses of your business, you can manage and eliminate threats that might otherwise catch you unaware.

By using the SWOT framework to look at yourself and your competitors, you can craft a strategy that helps you distinguish yourself from your competitors and better compete against them in your market.

How do you complete a SWOT analysis?

A SWOT analysis is generally completed by gathering input from your team during a workshop. These workshops are often facilitated by a strategic planning consultant.

It can be useful to gather the following information before completing a SWOT analysis:

Outside your company:

  • What are the market trends in your industry?
  • Who are your main competitors?
  • What is your market share?
  • How can you stand out in the market?
  • How do clients perceive you?
  • What pitfalls and dangers await you?

Inside your company:

  • Sales and marketing performance
  • The efficiency of your systems and processes
  • Financial performance and trends
  • Key internal personnel, competencies and governance structure
  • Your company’s culture and strategy
  • Your mission, vision and values

With this information in hand, you’ll be ready to assess your company’s internal strengths and weaknesses, after which you can focus on external factors that could impact your company.

Strengths

Make a list of your company’s internal strengths. These are any competitive advantage, skill, proficiency, experience, talent or any other internal factor that improves your company’s position in the marketplace and can’t be easily copied.

Examples include: 

  • solid financing
  • a superior brand
  • valuable intellectual property
  • superior technology
  • modern equipment 
  • a well-trained team
  • low staff turnover
  • management expertise
  • operational efficiency
  • high customer retention
  • good supplier relationships

Consider your strengths from both an internal perspective, and from the point of view of your customers and people in your market.

When looking at your strengths, think about them in relation to your competitors. For example, if all of your competitors provide high-quality products, then a high-quality production process is not a strength in your organisation’s market, it’s a necessity.

Weaknesses

These are the factors that reduce your company’s ability to achieve its objectives.

Examples include:

  • unreliable suppliers
  • insufficient marketing efforts
  • lack of financing
  • outdated equipment
  • management weaknesses
  • gaps in expertise

I suggest you, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you don’t see? Are your competitors doing any better than you?

Be as honest as you can when identifying these deficiencies. It’s best to be realistic now and face and address any unpleasant truths as soon as possible. Ignoring weaknesses means you can’t make decisions that will strengthen your company.

Opportunities

Opportunities are external factors that allow your business to grow and be more profitable.

Examples include:

  • new potential markets
  • consumer trends
  • innovations
  • technological advances
  • support from governments, the community or business partners

Opportunities should reference demand for your products and services or development potential.

Threats

Threats are external obstacles your business must overcome.

Examples include:

  • a declining economy
  • a labour shortage
  • a consumer shift to other products
  • technological change
  • community opposition
  • legal or regulatory changes

It’s often useful to take a close look at your competitors’ strengths to identify external threats to your company. Again, be as honest as possible.

A SWOT analysis doesn’t have to be a long, complex document. Two or three pages of bullet point notes are usually sufficient to focus on the essential findings.

Future articles will cover the other aspects of your Strategic Framework:

  1. SWOT Analysis
  2. Strategy Mapping
  3. Issues based strategic planning
  4. Balanced Scorecard
  5. Objective and Key Results
  6. Porter’s five forces
  7. Gap Analysis
  8. PEST analysis

At https://balanced-business-growth.com/ we provide the expertise to work with you to build your Strategic Plan. Once the Strategic Plan is built we then assist you to deliver the identified benefits. 

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