- If you are reading SCN cover to cover as many of you educationally addicted types do, you have witnessed the migration from emerging technologies and methodologies to a more mature industry/market.
- We now live in a world where we are surrounded and sometimes suffocated by technologies. Yet it is a different world from a business perspective as well. It is no longer enough to embrace technologies and solutions and make those our signature statements to the market. We must now understand business models, finance, human resources, continuing education, market trends, business development, and more.
- There are two key things that must take place. First of all, you must understand where your company is from a business perspective at this point in time with all the good, the bad, and the ugly in clear view. The second part of the analysis process is to decide what companies you will partner with as you shed the excess weight of those who are not capable of seeing your new vision.
- The first stage of analysis is the most difficult because it takes truly dedicated time. The best way to do this is to perform a SWOT analysis within a select group of company insiders employing an outside moderator (under nondisclosure, of course) whose task it is to keep the discussion on track. SWOT stands for Strength, Weakness, Opportunity, and Threat.
- Strengths:
- What advantages does your company have?
- What does your company do better than anyone else?
- What do people in your market see as your company's strengths?
- Consider this from an internal perspective, as well as from the point of view of your customers and people in your market. Remember that if all your competitors are offering a similar service or product, then this is not a strength, rather a market necessity.
- Weaknesses:
- What do you see as your weaknesses?
- What do others in the business see as your weaknesses?
- What do others do better than you?
- What could you improve?
- This also must be looked at from an internal and external perspective.
- Honesty at this stage is a prerequisite for success later on.
- Opportunities:
- What and where are the good opportunities facing your company?
- What positive trends are you aware of in technologies, the market, or purchasing patterns?
- Ask yourselves how your strengths play into opportunities and conversely, how your weaknesses prevent taking advantage of potential opportunities.
- Threats:
- What obstacles does the industry face?
- What obstacles does your company face?
- What is your competition doing?
- Are the projects, products, or services changing?
- Do you have bad debt or cash-flow problems?
- Could any of your weaknesses seriously threaten your business?
- Carrying out this analysis in an open and honest forum will create a roadmap for overall company progress and growth.
- The second phase of analysis is one that compares potential partners for your company in the areas of products and services. Research shows that the reasons we act in a certain way or involve ourselves with certain companies has more to do with emotion than factual analysis. In this regard, I have developed what I call the 5P Analysis. The 5P Analysis takes a look at Product, Price, Program, Process, and People in detail. This permits a fact-based decision for all the "right" reasons and provides a type of SWOT analysis of its own in the process.
- Product:
- List products or services to be compared.
- List options.
- List specifications.
- Note observations on performance or options issues.
- In this category, you can have products or contracted services. This section of the 5P analysis should adequately illustrate the details of the specific items/services to be reviewed and compared.
- Prices:
- Note the core prices.
- Note prices on options.
- Note buying requirements, freight, and payment terms.
- Remember in the area of price, the lowest price is not necessarily the lowest cost.
- Programs:
- List any volumes purchasing incentives.
- List market development funds or co-op marketing.
- Is training available at no charge?
- Other incentives or programs?
- Remember programs that are unobtainable or out of reach are of no benefit to you.
- Process:
- Explore the purchasing process.
- How is customer service handled?
- How are complaints adjudicated?
- Explore other processes that might affect your relationship.
- This section is all about how "easy" a company is to do business with. The lowest price and best programs will not make up for a company that is a nightmare to do business with.
- People:
- Does the vendor sufficiently call on your company?
- Do your vendor's personnel serve your needs?
- Do you like and respect the vendor's staff?
- It is still a relationship business, and the people calling on your company from a vendor can and often do make all the difference.
