You’d be hard pressed to find a company that wasn’t interested in growing their enterprise. Yet many companies embark on growth initiatives without taking stock of their marketing and operating assets and liabilities. When was the last time you conducted a business analysis?
It doesn’t matter whether you’re trying to grow top-line revenues, bottom-line profits or both. Analyzing your current situation is an imperative first step. I submit that understanding the internal business and external market conditions impacting your organization will point to the best growth opportunities.
Thomas Watson Sr., founder of IBM, said, “You don’t hear things that are bad about your company unless you ask. It is easy to hear good tidings, but you have to scratch to get the bad news.”
I suggest you scratch by conducting a SWOT (strengths, weaknesses, opportunities and threats) analysis, which will let you make better informed business decisions. If you have staff, involve them. When it comes to gathering “head out of the sand” information about your company’s business situation, front-line employees can give you the straight scoop.
Begin by evaluating internal conditions within your company’s control. Develop two lists — one for your strengths, one for your weaknesses. Here are some internal primers to get you (and your team) thinking: products or services, marketing, sales, operations, finance, equipment or technology, facilities and people. Evaluate these areas of your business to determine both strengths and weakness.
After you’ve completed your two internal lists, work on developing the external opportunities and threats lists. This part of the exercise may be more difficult because these conditions are beyond your control, and some of the information won’t be readily available, which will expose your knowledge gaps.
The external part of the exercise is also called a PEST (political, economic, social and technological) analysis. In addition to PEST primers, consider consumer and industry trends and the competition. When you expose a knowledge gap, find answers before completing your external lists.
In documenting your lists, limit each of the four SWOT categories to a maximum of 10. This will keep you focused on higher-impact conditions. Complete the exercise by prioritizing each list to reveal the most critical conditions.
The purpose of conducting a SWOT analysis is to take action to capitalize or leverage your strengths and opportunities (assets), and shore up or defend your weaknesses and threats (liabilities). Prioritization is an important part of the exercise because you won’t have the financial or human resources to address every problem, nor should you try.
This exercise will highlight growth opportunities for your business. In terms of increasing top-line revenues, you’ll discover ways to increase customer acquisition and retention rates. For improving bottom-line profits, you’ll find ways to optimize productivity and operational efficiencies.
Conducting a SWOT analysis is easy. However, developing and implementing an action plan that deals with the top three to five priority conditions takes commitment and accountability. I assure you it will be worth the investment. If you focus and act on those few areas that have the highest impact on your business, your return on investment will be strong.
Andrew Ballard is the president of Marketing Solutions, a local agency specializing in growth strategies. For more information, call 425-337-1100 or go to www.mktg-solutions.com.
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