Forces which have to be analyzed

Customer Analysis:

The crucial questions to be asked here are as follows:

1) Who are the biggest customers? And who are the potential customers?
2) What elements of the products / service do customers value most?
3) What are the changes occurring in the customers, buying behavior?
4) Why are the customers buying the product?
5) Why are some customers dissatisfied? Can this mean that they will switch over to the competing brands?

Seeking the answers to these questions plays a very important role in formulating the strategies of the organization.

Competitor Analysis:

Similarly, a detailed analysis of the immediate competitors, current and potential should be done.

1) Against whom do we usually compete? Who are the most intense competitors?
2) Do these competitors make substitute products?
3) Who are the most successful / unsuccessful competitors over time? Why?
4) What are the strengths and weakness of the competitors?
5) What is their cost structure? Do they have cost advantage or disadvantage?

Market Analysis:

1) What are the important and potentially important markets? What are their size and growth characteristics?
2) Which markets are declining or will soon decline?
3) What are the driving forces behind sales trends?
4) What are the alternative channels of distribution? How are they changing?
5) What are the trends in the market?
6) What are the success factors, assets and skills, needed to complete successfully? How will these change in the future?
7) How can the assets and skills of competitors be neutralized by strategies?

Environmental Analysis:

1) Technology – to what extent are the technological developments affecting the industry?
2) Government – What changes in regulation are possible? What will their impact be?
3) What tax or other incentives are being developed that might affect strategy?
4) What are the risks of operating in a certain political environment?
5) Culture
6) What are the current trends in life styles, fashions, and other components of culture?
7) What likely changes are expected in these factors? Apart from these, there are other general environmental questions like
8) What are the significant trends and future events?
9) What threats and opportunities do you see?

So, these are the factors or forces which have to be analyzed thoroughly before any strategic planning is undertaken. Of course, it is important to take competition into account, but in making a strategy, that should not come first. First comes the painstaking attention to the needs of the customer, then comes a close analysis of a company, degree of freedom in responding to those needs, followed by the willingness to rethink about the goods and services of the company, rethink about the business system that designs, builds and markets them. Tit-for-tat response to what competitors do may be appropriate, but they are largely reactive. So, they come second, after your real strategy.

Looking closely at customer’s needs, thinking deeply about a product – are the basics of sound management. Strategic skills of a manager force him to resist the easy answers in search for better ways to deliver value to customer.

Market potential and sales representative effectiveness are but two of the basic determinants of sales results in a territory. To measure sales representative performance, it is necessary to take into account some of the other factors which influence sales results. One study of a national sales organization found that six factors explained 72 percent of the variation in sales among territories. These factors and the methods of measuring them are the following:

1. Market potential
2. Territory workload
3. Experience of sales representative
4. Motivation and effort of sales representative
5. Company experience
6. Company effort