What is the Big Picture? How to Get Your Strategy in Order
All good strategies apply strengths to maximize opportunities.
Before we start preparing a marketing plan, we need to ask ourselves, ‘What’s our Situation?’ and look at the big picture.
This is especially the case if you are starting out, new in a role, or have joined a business where the marketing or sales targets are not being met.
There’s a chance that the problem isn’t that the marketing doesn’t work, the problem could be with the strategy. By that, I don’t mean the marketing strategy, but the organization’s strategy. It may be that your company doesn’t have a strategy. In my professional experience, that is not uncommon. This is where you come in.
Even if you are working with an existing strategy, from time-to-time, every organization needs to reflect and take a bird’s eye view. In business, like life, nothing stands still. The landscape is always changing.
So what’s the situation? Let’s take a look at a basic Situation Analysis.
Research your Market
Let’s start with some desk research.
IBIS Research
I like IBIS because it’s an international trove of information with country-specific national data.
Go to www.ibisworld.com and look up your industry.
If you are a member of an educational institution or have access to IBIS’s full reports, go ahead and read through yours. If you can’t access a paid subscription, there are still quality free overviews worth checking out.
IBIS will be able to tell you the size of the market and how the industry is structured, as well as how many people are in each business and the types of market segments that these businesses service.
Extract what you think are KEY learnings you can take from this. Remember it is not about having lots and lots of information. It is about having just the key information from which you can draw intelligence.
As a basic guide, these things below you’ll want to get a handle on.
IBIS uses Porter’s Five Forces as its framework. Developed by Michael E. Porter in 1973, the five forces are a useful way of understanding the situation.
This is a sketch I made to show you how the forces work together. You can review the industry information that’s at your disposal and write as little as one or two sentences for each of the forces. Some of the questions to consider are in the explanation of each force, which are below.
Force One: Competition in the industry
Generally speaking, where there is heavy competitive rivalry, profit margins tend to be lower. There tends to be a lot of price-cutting and customers can shop elsewhere.
How many competitors are there? How big are they? Is there a monopoly, duopoly, a whole lot of bit players? Is it a red ocean?
Take a moment to contemplate how intense the competition is.
Force Two: Barriers to entry
How easy is it to enter your industry and start competing?
For example, is government regulation a barrier? Are technology and capital required? Could more competition come in at any time?
Who has the power in your industry? Buyers or Suppliers.
Force Three: Bargaining Power of Customers.
What are the major market segments? What determines demand? Who wields the power?
For the energy industry, you could say that historically, it has been the energy provider. Customers need their supply. Now that is changing with renewables and alternatives entering the market and customers can demand a better deal. The balance of power is shifting.
Force Four: The Power of Suppliers.
Are you at the whim of a crucial link in your supply chain? Do suppliers wield a lot of power, or it is buyers? Are there issues along the supply chain? Is there a link in your supply chain that you would be stuffed without?
For example, South Korea produces half the world’s chips for everything from smartphones to cars. In September 2019, South Korea had a diplomatic falling out with Japan who has been the supplier of the necessary chemicals to manufacture the chips.
Force Five: Threat of Substitutes: How easy is it to substitute one service for another? Self-service is also a substitute. Graphic design, photography, architecture, even home building are seeing their customer bases get nibbled at the edges by their own customers, as people get online tools and capacity to self-service.
Customer bases are getting nibbled by their own customers.
Shouldn’t I Just Do a SWOT?
A lot of people will tell you that to do strategy, you start with a SWOT analysis. This is a chart of your organization’s strengths, weaknesses, opportunities, and threats.
You can’t do a SWOT before you do the research. SWOT is a very powerful tool but only when used correctly and, in my humble opinion, with some modification. We’re not ready for the SWOT yet. Stay with me.
Other Knowledge Sources
You probably already have quite a lot of knowledge about your industry from experience. So will your boss, your CEO, your senior staff, and your customers.
Other places you can look at macro research are:
- Statista
- Industry journals and trade press e.g. The Economist
- National and other newspapers
- Financial press
- United States Census Bureau, Australian Bureau of Statistics, or other national data collections
- Marketresearch.com has forecasts and detailed data for a fee.
- Qualtrics is also a professional consultancy used by bigger organizations for a fee.
- Talk to your boss, other staff, franchisees, and listen to customers.
PEST
You have probably heard of PEST or PESTLE. This little template helps us look at the big picture in an analytical fashion. Its key purpose is to identify opportunities and threats.
Traditionally, PEST has been represented as a simple four-square matrix like below. A business owner or manager would list the handful of factors that are occurring presently, and likely to occur in the near future, that will impact your industry.
To guide you through what to write, ask yourself these questions for your PEST.
POLITICAL / LEGISLATIVE
What is the governing body and critical legislation for your industry?
Are you in a domestic or international market place?
Are there any government or trade restrictions or protections in place or on the horizon?
ECONOMIC
How competitive is the industry? Are there barriers to entry or is it easy for new players to start competing?
What impact if any is the current economic climate having on the industry?
SOCIAL / CULTURAL
What trends are emerging for consumers?
Are there environmental or ethical considerations?
How is our client-base changing? (e.g. aging, more health-conscious?)
Are there any new demands or expectations?
How are lifestyles affecting the industry? How are our clients behaving? What is important to them?
TECHNOLOGICAL
Have there been any disruptive technologies to affect the industry (e.g. VoIP phones disrupted landline telephony, digital cameras disrupted film manufacturing)
Are there any foreseeable advances on the horizon? (e.g personalization, customisation?)
How is the use of technology being adopted by clients/customers?
What effects is the Internet having on the industry?
Your PEST With Implications
You can probably brainstorm 10 items for each square. Great job! But we want the few that are the most significant. This is not a numbers game. We want to cut the list down.
Every business will have 25 factors affecting its success or failure. But a CEO can’t manage 25 factors. They’ll managed the 2 or 3 that are the most significant.
After you have filled in the template, from each list, select the two or three most significant factors your business must address.
As well as our observations, I like to push it a step further and succinctly describe the Implications of each. By taking this one small step, we open things up exponentially.
It allows us to start thinking strategically.
As you can see, we simply add a column next to each category where we can think about the implications of these trends.
Here is an example of Physiotherapy. You don’t need to read it all. But it starts to reveal a few OPPORTUNITIES or strategic directions an organization can head into.
There you have it. Using all your reading and knowledge you have about your industry, and these two tables, you can start to form a view of where things are going.
Next, we need to look at who else is in the game.
Originally published at https://mvmm.com.au on September 27, 2019.
