Recognizing strengths and weaknesses

Strategy development rarely starts on a ‘greenfield site’. Those who want to determine the future course should know where they come from and where they currently stand: how their business is structured, on which strengths they can rely and which weaknesses need to be removed.

Characterization of the initial situation

For such a strategic characterization of the initial situation the right tools need to be chosen. For this purpose different instruments are applied:

  • Analysis of business structure: Here, the products and services as well as market segments are detected and compared to one another in a business structure matrix. This is how a conceptual order of the entrepreneurial activities evolves from which emphasis in terms of main business areas can be deducted.
  • Portfolio analysis: Product groups, market segments and main business areas are compared on basis of internal and external criteria. The visualization in form of product-, market and business portfolios offers another overview over the own business.
  • Analysis of key success factors: Factors which are relevant for the competition, are identified and evaluated concerning their importance for the business success as well as concerning their relatively strength of the purchaser. This evaluation can be made by executives, employees or externals. The final evaluation of such a key success factor analysis gives strategic key factors for the current success as well as critical success factors for the immediate need for action.
  • Competitor Analysis: In this step, the relevant competitors will be identified and evaluated regarding the central success factors.

Of course there is a huge variety of further instruments, which can be combined with the previously mentioned approaches.  This is how the described analysis can be specified and deepened.

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