How does your business compare? Demystifying strategic planning

In our last article, we shared with you the continuum of planning from doing nothing to planning everything that moves. Our engagePlanning approach is designed to get the best out of business planning models and practices and then adapt it for your world. We want to make strategic and business planning easy for you and your organisation. In this Blog we will explore the Analysis & Review step of the engagePlanning approach.

engagePlanning enables businesses to stop, reflect, analyse and plan their future.

As a refresher, here’s our engagePlanning process.

My first job was with Kodak and I was placed in the graduate program. George Eastman founded Eastman Kodak in 1888. Kodak was a very successful innovative film based company for over 100 years… until it wasn’t.

In the early 1990’s the motion picture and television and consumer photography divisions held the number one position in the market with an extraordinary market share. Kodak’s competitors were miles behind. However, what Kodak failed to do was to notice the innovation of digital photography and film. The irony is that the technology behind digital photography was developed within Kodak. Kodak was so focused on what they knew they had blinkers to the technology changes around them, until digital technology wiped them out.

Kodak was a best practice market leading company in a mature market. Their market dominance made them arrogant and unable to pivot and adapt to technological changes.

We live in an era where technology is so prevalent in transforming our lives and industry after industry, company after company are being disrupted. When was the last time you hired out a video, looked up the yellow pages or bought film for your camera?

If you want to have a future, you need to be alert and see what’s coming around the corner. You need to understand what new technologies, products and services are likely to impact your business – both in a positive and negative way. Then you need to plan for these eventualities so that you can maintain your competitive position in the market.

Analyse, Review, Plan

The Analysis & Review section of the engagePlanning process is fundamentally about understanding the competitive environment from a range of perspectives.

Here are some questions to help you check how future proof your business is:

• Do you really know how your business compares to others in the market?
• How well do you know your competitors?
• Are you keeping up to date with start-ups in your industry that might have potential disruptive technologies?
• Are you aware of the business forces that will impact your business?
• Are you curious about the future?
• Do know how to extend the lifecycle of your products and services?
• Do you have a plan for managing the end-of-life of old products and services and what impact this will this on your revenue, profit and customers?

Depending on how much you enjoy detail, there are a number of strategic tools and models you can use to analyse your competitive position in the market place. We present a few here to help you future proof your business.

Feel free to pick and choose the analysis tools that resonate best with you.

1. External business forces

External business force analysis is also known as the PESTEL analysis. It considers a range of external forces that can impact your business – Political, Economic, Social, Technological, Environmental and Legal.

List as many as you can think of.

Which PESTEL forces will impact your business – both positively and negatively?

2. Internal Process Analysis

Businesses systems run on processes – whether they have been documented or not. To do the topic justice, business systems and processes requires a dedicated article. So for now, we’ll present the simple idea of SIPOC. SIPOC provides a meta-view of your overall business system and includes Suppliers, Inputs, Processes, Outputs and Customers.

• Articulate your Suppliers, Inputs, Processes, Outputs and Customers (SIPOC)
• Can you identify better ways of operating your business system to create a competitive advantage

3. SWOT Analysis

The strengths, weaknesses, opportunities and threats (SWOT Analysis) is arguably the go to model that many organisations turn to when beginning the strategic planning process. It is one of the few strategic analysis tools that considers both the internal environment of your organisation as well as external threats and opportunities.

• What are your strengths at a team and organisational level?
• What are your weaknesses?
• Scan the environment - what are all the opportunities available to you?
• What threats do you see (think about them in terms of PESTEL)?

4. Product/Service Portfolio

Most businesses have a suite of products and/or services that are offered to different customers segments.

• What products and services do you have a competitive advantage in?
• How do you compare with your competitors products and services in terms of market share, feature set, pricing, etc.?
• What are your most profitable products/services and why?
• What are your least profitable products/services?

5. Customer Success

Customer success is a relatively new term that is commonly used in the start-up community. However, it’s a major shift in thinking to the historical ‘customer satisfaction’ idea, particularly in the B2B environment. Your customer’s buy your products and services to derive a range of benefits that help them be successful in their own businesses. People rarely make business decisions to just satisfy a need.

• Do your customers have an easy time of purchasing, implementing and using your products and services?
• Do they have a great experience each and every day by using your products and services?
• Do they receive a range of benefits that directly and positively impacts on their business success?
• Do you know how loyal your customers are to your company?
• How many of your customers refer you?
• Why do your customers buy from you?

6. Employee engagement

A disengaged employee, or worst still a group of disengaged employees, will have a detrimental impact on your organisation. Measuring employee engagement is challenging and while there are assessment tools available, in many cases you know, or at least should intuitively know how engaged your people are. Think about the following questions to gage the level of employee engagement in your organisation:

• Is there is shift in mood or has something changed in the work environment?
• Are you experiencing a high level of employee turn-over?
• Are you finding it difficult to attract top talent?
• How loyal are your people? Are they ‘just doing their job’ or do they voluntarily go above and beyond their call of duty?
• Do your employees respect the leadership team?
• Do you have the right mix of capabilities and skills?
• How do you develop your employees? Do they express a lot of interest in your development programs?

7. Customer Lifecycle

Customer lifecycle is more commonly referred to customer life time value (CLTV). It is a measure of how much revenue a customer will generate while they remain a customer of your product or service. Determining the profitability for each customer includes understanding how much it costs to acquire a customer. A common measure used is customer acquisition cost (CAC).

Consider the following questions to get you started in understanding your customer lifecycle:

• What % of revenue does each customer contribute to your business?
• Who are your top customers in terms of profitability?
• What is the average lifecycle of your customers – i.e. how long do they remain customers?
• How can you extend your customer lifecycle?
• What business model have you implemented in engaging with customers – pay per sale, subscription model, membership, etc.?

Driving better decisions

Competitive analysis and review help drive better decisions on how to compete and thrive in the market place. The outcomes from this part of the process will become inputs into your strategic plan goals, strategies and measures.

In our next blog, we will explore the practical application of engagePlanning’s one-Page Plan and team and personal plans. The one-Page Plan provides a clear roadmap and helps you to communicate your annual goals, strategies and targets. Team and personal plans are also one-Page Plans written in alignment to the organisational level one-Page Plan.

Contact us if you would like any feedback or support with articulating your Competitive Analysis.

Be all you can be!