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So, Where is Your Business Coming From?
© 2004 By Mark Munday
Regardless of how you are traveling, you won't get very far
without knowing where you are going. That a Business Vision
is needed to provide strategic focus in a business, is
almost self-evident. But it is also important that you
understand where your business is coming from.
The current state of your business is an integral part of
your business strategy. If it isn't considered specifically
when you develop your strategy, your chances of getting your
business to move in the desired direction are reduced
considerably.
Think of your business strategy as a map. When you are
traveling, maps are great for connecting two separate
locations - your current location and your desired
destination. On the map, you can see all the roads that that
lead to your destination. But before you can plan a route,
you have to locate your current position on the map.
Once you have clearly identified your
starting point, connecting it with your destination is
straight-forward. And planning a route that will take you to
your desired destination is easy. Developing a strategy that
builds your business, is just the same.
The need to understand current circumstances in your
business, is pretty obvious. In fact, it is so obvious that
many business people overlook it. The end result is that
business strategies lack the balance and focus required to
deliver desired results.
The most effective way to understand where your business is
coming from, is to do a SWOT Analysis. The letters in
this acronym stand for Strengths, Weaknesses, Opportunities
and Threats. Analyzing your business from these different
perspectives, gives you a solid understanding of the current
state of play and where you stand.
BEAT the Cold Winter of 2007 ARIZONA'S NEWEST WONDER
Kartchner Caverns State Park opened in 1999. This stunning limestone cave system is one of the top in the world. Visit Sunny Southwest this cold winter |
Understanding your Strengths enables you to capitalize on
them. You are able to differentiate yourself from your
competition and build a competitive advantage. Similarly,
knowing your weaknesses puts you in a position to take
suitable corrective action. You can avoid the business being
weakened any further.
Opportunities and Threats are more future orientated. Being
clear on them can mean that you respond and adapt to your
business environment in a way that puts you ahead of the
pack.
Here is how you go about doing a SWOT Analysis. Under each
heading list the important points. Together, they are a good
summary of the current state of your business.
~ Strengths - All those things that you do, or
could do, better than your competitors. By capitalizing on
these strengths, you can define a niche market and build a
competitive advantage.
~ Weaknesses - Things that cause difficulties in your
business. By taking corrective action, your stem the losses
caused by weaknesses. And you are able to prevent further
weakening of your business.
~ Opportunities - Relate mostly to the market. In
other words, demand for your product and related products.
Your long-term focus is to make the most of opportunities
and become a market leader. You do this by being responsive
and adapting to change.
~ Threats - These are things that could undermine
your success. Usually, Threats relate to competition and
changes to the rules of the game. Rules that are imposed on
you.
BEAT the Cold Winter of 2007 ARIZONA'S NEWEST WONDER
Kartchner Caverns State Park opened in 1999. This stunning limestone cave system is one of the top in the world. Visit Sunny Southwest this cold winter |
A common error is to mistake Strengths for Opportunities,
and Weaknesses for Threats. This can lead to confused
strategic thinking and sub-optimal strategies being
developed. So use this distinction.
Strengths and Weaknesses relate to your internal
environment. They are all elements in your business over
which you have a lot of control. So the effects of taking
action are typically short-term and fairly predictable.
Opportunities and Strengths relate to your external
environment. Because you have little control over them, you
have to adapt to the demands of the market and competitive
pressures. The effects of taking this type of strategic
action, are felt over the long term. The reality is that
change is an ongoing process and is gathering momentum as
time passes.
Your SWOT analysis tells you why you have to take
certain actions. Your business strategy, which is the next
step in the planning process, is all about how you are going
to take this strategic action.
Doing a SWOT Analysis, is an essential block in the
strategy foundation. It focuses your attention on important
issues and challenges in your business. This gives your
strategy the energy and direction it needs to transform your
business.
ABOUT THE AUTHOR:
ABOUT THE AUTHOR:
As a business strategist, Mark works with business owners on
achieving untapped potential. Find out more at
www.businessPlanz.com. Also check out a revolutionary new
business strategy building system at
www.stratPlanWizard.com |
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