MOST Analysis

Mission Statement

Course Objectives:

Business Transitions is a forward-looking program designed to build value for the next evolution of the business. Business Transitions begins with establishment of a baseline for where the business is today. Business Transitions are affected by the value of the business viewed by industry standards and balanced against the perceptions, desires and needs of the owners and stakeholders of the Company itself. To accomplish this, a suite of tools will be utilized. In this session, we will be introduced to, and learn each tool for use and application throughout the Business Transitions program. These tools are; Porter’s Five Forces, SWOT, 5 Whys: Root Cause Analysis, VMOST Analysis and Pareto Principle. Each of these tools will facilitate analysis into each area and identify areas and create a roadmap for improvement and change to build value.

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Objectives

01. The changing business environment today: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
02. Understanding the impact of external economic activity on business growth and success; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
03. How to set objectives for your business; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
04. Metrics for measuring business success; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
05. Evaluating business performance in the modern economy; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
06. Porter’s five forces; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
07. SWOT analysis: departmental SWOT analysis; strategy research & development. 1 Month
08. Root cause analysis: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
09. VMOST analysis: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
10. Pareto principle: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
11. Appraising future investments: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
12. Implementing improvements and growth measures: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month

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Strategies

01. The changing business environment today: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
02. Understanding the impact of external economic activity on business growth and success: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
03. How to set objectives for your business: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
04. Metrics for measuring business success; Each individual department head to undertake departmental SWOT analysis; strategy research & development.
05. Evaluating business performance in the modern economy: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
06. Porter’s five forces: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
07. SWOT analysis: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
08. Root cause analysis: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
09. VMOST analysis: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
10. Pareto principle: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
11. Appraising future investments: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
12. Implementing improvements and growth measures: Each individual department head to undertake departmental SWOT analysis; strategy research & development.

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Tasks

01. Create a task on your calendar, to be completed within the next month, to analyze The changing business environment today.
02. Create a task on your calendar, to be completed within the next month, to analyze Understanding the impact of external economic activity on business growth and success.
03. Create a task on your calendar, to be completed within the next month, to analyze How to set objectives for your business.
04. Create a task on your calendar, to be completed within the next month, to analyze Metrics for measuring business success.
05. Create a task on your calendar, to be completed within the next month, to analyze Evaluating business performance in the modern economy.
06. Create a task on your calendar, to be completed within the next month, to analyze Porter’s five forces.
07. Create a task on your calendar, to be completed within the next month, to analyze SWOT analysis.
08. Create a task on your calendar, to be completed within the next month, to analyze Root cause analysis.
09. Create a task on your calendar, to be completed within the next month, to analyze VMOST analysis.
10. Create a task on your calendar, to be completed within the next month, to analyze Pareto principle.
11. Create a task on your calendar, to be completed within the next month, to analyze Appraising future investments.
12. Create a task on your calendar, to be completed within the next month, to analyze Implementing improvements and growth measures.

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Introduction

Introduction to Business Evaluation Course

Success in the changing business environment of today is only available by identifying the importance of updates and innovative measures. Before we discuss the important subject of business evaluation, it is necessary to shed some light on the changing business environment that has resulted in the need for businesses to constantly evaluate their strategy and growth curve.

Changing with time is a key business skill and as an introduction to our business evaluation course we will look at some necessary techniques for adjusting in the rapidly changing business environment of today.

Steps for Change Management

The changing business environment has only made senior executives realize the needs of their employees. When change was scarce, organizations wouldn’t worry about ingraining it within their culture and employees, but now that change lies at the very core of business culture, there is greater focus on how it can be managed and the results that can be derived through it.

Some steps organizations and managers can follow today to remain competitive in the changing business environment include:

Addressing the Human Side

Almost any significant transformation in the workplace can create people-issues and complications. New skills and capabilities have to be developed, new leaders will be asked to step up and fill in for responsibilities. Employees will remain skeptical of change in the meanwhile and will have their reservations as always.

Dealing with these issues in a reactive manner can put all morale, efficiency and speed at risk. The first and perhaps the most important attribute of change management should be to focus on the employees directly involved in the process. The change management process can only succeed if the focus remains on employees and what that change means to them. The change management approach should be integrated into the decision making process and should focus on employees as the first point of change.

Starting from the Top

Since change can be inherently unnerving and unsettling for people at all levels of an organization, the attention would definitely turn to the leadership team and CEO for support, strength and direction. Leaders themselves have to be onboard with the new approaches first and should be ready to take drastic measures for the growth of the organization. These drastic measures should be focused on challenging and motivating the organization. Executive teams should be the first to be introduced to the change and should be kept on board throughout the change.

Involving Every Layer in the Firm

As transformation programs progress forward, you should look to involve every layer within the organization. Change efforts should include plans to identify leaders across the organization and give them dedicated instructions on how to manage a change initiative. Since water trickles down, the implementation of the change initiative should start from the top and then trickle down to the bottom. The change eventually cascades through the organization and achieves the objectives required from it.

Creating Ownership within Workers

Leaders of real change management programs strive to create ownership among the workforce in favor of the change and what it can achieve for the organization. This can be created through a leadership team willing to accept responsibility for the change in all areas they can influence or control. Ownership can be created and reinforced through the use of rewards or incentives. The incentives can either be tangible, in the form of financial compensation, or intangible, in the form of psychological camaraderie and a shared sense of destiny.

Assessing Culture

Almost all successful change management programs pick up intensity and speed as they come down to other lower levels of the hierarchy. This is only possible if the management has done their homework and assessed all attributes of the organization’s culture. Companies often assess culture too late and do not recognize the importance it carries. Through cultural diagnostics, organizations can prepare themselves for change, bring a number of major problems to the surface, define all factors that influence leadership sources and identify conflicts. These diagnostics help in the identification of core values, behaviors and perceptions across all levels of the organization.

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Adapting to Change in a Changing Business Environment

As managers and employees in this changing era, the primary measures you can take to adapt to and be ready for change include:

• Becoming aware of your situation
• Understanding the true meaning of change and how it inspires you
• Building your skill- and knowledge set for the future

We explore these points in greater detail within this section.

Becoming Aware of Your Current Situation

A big part of change management for supervisors and managers is to become aware of their current situation. What is currently going on in your organization? If you don’t know, it is about time that you find out about it and take the steps necessary to inculcate change within the workplace.

Relevant ideas and questions to help you take the research process and pace forward include:

• What is the mission of your specific department, organization or unit? Supervisors and managers need to begin their analysis of the current situation by answering this question first. The very first thing to clarify is your department’s or unit’s mission. Concrete steps toward change can only be undertaken once the mission is clear.

• What is the purpose of your job? As supervisors and managers, we contribute to the organization in one way or another. The job has a specific purpose, which should be identified and understood here.

• What are your key assignments and responsibilities? Again, supervisors should take their understanding of the job’s purpose forward by studying the key responsibilities and assignments that come under their supervision. An understanding of these responsibilities can significantly enhance results.

• What does your supervisor expect from you? As employees, and even as managers, we mostly have supervisors and higher-ups keeping an eye on us. These supervisors expect a certain deal from all members.

• What obstacles stand in the way of change? Organizations and the employees within them should identify all obstacles in the way and come up with a clear strategy to remove these hurdles and build a clear path to success.

• What resources are present at your disposal? The basic economic problem of limited resources and unlimited wants still stands true today and should be mitigated before proper change management. Understand the resources you have and take the query of wants forward from there.

• What changes are coming? Finally, you should ask yourself the all-important question of what changes are coming your way? This answer helps you determine the management endeavor and adapt to change along with your team.

The inability to answer questions like these should be a warning for most department managers to do their homework. As managers and supervisors, you are in a very strategic position in the change management process. The inability to do your homework can significantly reduce the efficiency of change.

People in organizations often employ selective perception, specialization or certain habits to keep them from being exposed to ideas of change. While this can be considered basic human nature, it isn’t a good strategy to handle change. Instead, this is the time for supervisors and managers to look into their fears and broaden the information they have to explore a number of new ideas. By increasing their awareness of change, managers can practice a distinct advantage over others who have isolated themselves.

Understanding Change

Compare your reaction toward change to that of a small child’s reaction to thunder. You might ignore change as it comes your way, but a small child may feel anxious and can seek assurance from the adult sitting them. It is a basic human trait to fear the unknown, as confidence only comes from understanding the phenomenon and the intricacies behind it. From your learning and experiences as an adult, you now realize that thunder is a natural event that does not harm you. The small child has no idea what thunder is and can only hear a loud, roaring sound that immediately scares them. Based on this analogy, an important step toward change is to realize and understand what is happening around you and why you’re a part of it.

Is your department in the process of being reorganized? Are you a bit worried about how that might impact you? These reactions are totally natural. But do not fall victim to speculations, inclinations or rumors that make you assume the worst. Wait for someone to explain the motive behind the reorganization, and the specific changes that will result from it.

Flexibility toward change can make organizations stand out in the industry today. Organizations that fail to deal with change are unable to compete with other strong members in the industry. Organizations can have internal debates on this matter, but as a rule of thumb, organizations should appreciate technology and competition, and also recognize that these two factors play an important role in business evaluation and re-evaluation.

Building Skills

Adapting to change frequently requires an effective command over skills that matter in the industry today. In some cases, adapting to change will require you to learn a number of new skills that you do not yet have command over. As employees and managers, we cannot stop learning and updating our skills.

Employees should take the responsibility to educate themselves and also to remain current and up to date with changing trends. This information will help update their skill sets and will also demonstrate an achievement and strive toward self-improvement.

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Considerations to Stay Relevant in the Changing Business Environment

The faster you learn, the sooner you can adapt to changes and the more relevant you will remain in the industry. One of the biggest challenges that leaders face today is facilitating organizational adaptability. The business environment, as we have discussed above, is dynamically changing around us. There are a number of new advancements and challenges that weren’t around until recently and have popped up of late.

Historically, western culture has focused on the concept of a heroic leader. The idea that a charismatic leader will swoop in as the knight in shining armor and save the business in distress has for long been the ideal characteristic that businesses and entrepreneurs have had to live up to. For instance, take a look at the cover of any business magazine and you will see pictures of the successful CEO and the achievements they have had, without a single word on the team that helped them achieve what they did.

As per recent business predictions, businesses that live by the same age-old methodology and don’t broaden their leadership practices will suffer at the hands of the changing business environment of today. Change will upgrade you onto a phase of relevance, be it from customers, competitors or even suppliers.

In this section we shed light on some of the considerations and practices businesses can follow to remain relevant in this changing business environment:

Updating Change Theory

Just like the business environment around us is constantly evolving, so too are the leadership and change theories enabling work. Unfortunately, many theories of change are focused on antiquated efforts that don’t hold true anymore. For instance, the trickledown effect does hold value, but the fact that one person at the top can impact almost every aspect of an organization’s style and environment is insane. Every hierarchy in the organization comes with different approaches, environments, cultures and behaviors. Due to the difference in these core processes, the behavior toward change and the acceptance of new technologies will be different across the board. Hence, leaders cannot just impact every level within the organization by cascading goals, directions and values.

Organizations need to take into consideration the emergence of sub-cultures across hierarchies and the different dynamics across different levels. Based on this information, viewing the entire organization as a stable entity with similar characteristics and viewing the leader as the messiah in a white robe is plain farfetched.

Shift from Drastic Change to a Culture of Adaptability

The primary assumption with the change process is that it is something that begins and then ends, once it has lived its finite life. A change effort, for instance, connotes a finite effort that is temporary and will not last long. Hence, organizations and employees really aren’t at fault to consider change a temporary effort which will pass when people start suffering change fatigue.

However, change isn’t something that ends, especially in the rapidly changing business environment of today. There is no single change per se, just varying levels of organizational adaptability toward different advancements.

Organizational adaptability can be defined as an organization’s ability to do something in a sustainable manner without interruptions. However, organizational adaptability requires a shift in perspective from top management, who should focus more on short-term management than on long-term management.

Distinguish Between Managers and Leadership

Many leadership training and development programs in the contemporary world focus a lot on individual skill sets such as delegation, building a strategic vision and coaching. While these leadership skills can be helpful for managers, they aren’t a true representation of leadership.

While leader development focuses primarily on the individual and their skills, leadership development focuses more on creating value through interaction in the workforce. Organizations looking to promote true leadership development should give opportunities to all leaders to apply their skill sets within their work. This includes producing real results through collaborative inquiry, action learning and appreciative feedback. The faster leaders learn, the faster they can adapt to different situations.

Clarify the Purpose of Leadership in Your Organization

With the growing surge in cross functional teams, the role of the leader in organizations is a lot more prominent. As the business environment changes at a rapid pace, leaders have to act as liaisons and integrators that enable the coordination of disparate functions across the organization. Based on leadership theories from prominent psychologists, we can list down three major types of leadership styles:

• Administrative Leadership: This leadership style is focused on coordinating and structuring organizational activities in a bureaucratic manner.

• Adaptive Leadership: Adaptive leadership is what is seen when a meeting that starts with opposing viewpoints and different arguments ends on a positive note of consensus.

• Enabling Leadership: Enabling leadership refers to the conditions leaders set to enable new behaviors, learning and innovation.

The purpose and type of leadership should shift based on the situation organizations find themselves in, and the steps that should be taken to counter that situation.

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The Effect of Economic Change on Businesses

Sometimes organizations feel like the only guarantee about economic conditions is that they will change sooner or later. Businesses with sufficient experience behind their back went through the same phenomenon yet again as COVID-19 killed all economic activity and led to a recession of sorts. These economic ups and downs are part and parcel of running a business, and business owners can’t help but be aware of them and the complications they bring for them. Due to the constant presence and threat of economic downturns, businesses have to ensure that they are always working toward plans for better economic strength and ability.

In this section we study the impact economic conditions can have on business activity:

Focus on Profitability

Regardless of how the economy is doing, the primary focus of every organization today should be on making their business as profitable as they possibly can. As a general rule of thumb, seasons of high economic growth and stability are relatively easy for businesses to manage. This is because economic growth is the call of the hour, consumer confidence is high, unemployment rates are down and people have greater disposable incomes to spend on goods they like and believe they should have. All of this eventually leads to more people choosing to buy from different businesses. The more people have to spend, the more willing they will be to try different businesses in the market and benefit from the expertise they have to offer.

This situation can present a gloomy contrast when economic activities die down and the economy experiences a downturn. People are more inclined toward saving money during an economic downturn than they are toward spending it. Additionally, businesses also have to market hard to build a relative perception of their product in the eyes of customer. Businesses can feel the pressure during economic downturns, especially if they aren’t prepared to face the rising pressure.

Business entities that are focused on being profitable get to benefit the most during dry times of economic downturns. The objective of profitability does not only provide businesses with the peace of mind they require across seasons, but it also gives them the freedom and leverage to make hasty cuts in prices during recessions, make rash decisions based in the moment and innovate their product for different markets. Without the freedom to experiment with decisions, businesses will never be able to decide what’s best for them. This will eventually lead to a sphere of decreased sales, where businesses rely on past glory and profits to pull them through the phase.

Be Prepared for Opportunity

This does sound like the kind of content you might see on the marketing material for a business school, but the fact of the matter is that every single economic period brings with it an opportunity for businesses to diversify their opportunities and open new avenues.

During a period of growth, businesses are more at ease to take decisions they feel can be beneficial for them and are also willing to hire additional personnel, because there is no better time than now. Organizations that want to move into larger spaces also do so during periods of economic downturn, because the market is ideal for purchasing during such periods, and businesses have enough cash available to them to buy new plants and step into new markets.

Lean sessions of economic downturn can present a different kind of opportunity altogether. These opportunities are difficult to jump on, as most of the businesses in your industry might decrease their operations and reduce the money they spend on marketing.

As your competitors reduce the focus they put on the market, you can focus intently on pivoting your efforts to focus more on new avenues such as digital marketing, entering a new market or crafting a new marketing strategy. These seasons also give you the time and freedom to experiment with new packages, pricing tiers and services that they haven’t embarked on previously.

The exciting part about opportunities unearthed during periods of economic downturn is that they pave the way for future growth in this regard.

External Factors Affecting Business Environment

There are a number of external factors today that impact business environment and the success/growth curve of organizations around us. While we have discussed the economy in general and the impact it has on businesses, we will discuss some of the other external factors that affect business performance and can positively or negatively influence growth.

1. Social and Cultural Environment

The social and cultural environment of a region includes the attitudes, values, opinions, lifestyles and beliefs of individuals residing in a nation or region. These characteristics determine customer behavior and are developed from cultural, demographical, religious, ethnic and educational conditioning. The characteristics are often the result of years of conditioning.

Like other forces impacting the external business environment, social factors keep changing continuously. A change in the social attitudes, values and beliefs in a region can affect the demand for different types of leisure activities, books and attire etc.

The factors that influence this impact include:

Demographic Factors

Demographic characteristics such as age distribution, population, literacy levels, religious composition, inter-state migration, income distribution and rural-urban mobility can significantly influence the strategic plans of an organization. This eventually affects the compensation and hiring policy followed by employers within different organizations.

The age demographics in particular countries define the selling and buying environment of that region. Organizations have an eye on the characteristics and the age demographics of the people in the region and make their plans accordingly. Countries with a growing young population have a shift toward more youth-oriented goods, which are meant for younger audiences. These products include fitness equipment, beauty products, magazines, hair and skin care preparations, etc.

On the contrary, countries with a growing population of senior citizens have businesses that focus more on products to this market. Additionally, governments in such countries pay more importance to social security benefits and tax exemptions for senior citizens.

Cultural Factors

Social values, customs, attitudes, rituals, practices and beliefs are formed through years of conditioning and influence businesses and their practices in a number of ways. Christmas offers a great opportunity for tree growers, toy retailers, card companies and mail order catalogue firms to grow their business further and to benefit from the sudden spike in demand.

Social values can best be defined as an abstract sense of what is good, desirable and bad. Beliefs on the contrary can be defined as an understanding of the characteristics that define social and physical phenomena around us. Beliefs are important, since they define the way most individuals think and the rules they have for themselves.

McDonald’s is the ideal example of a foreign brand endorsing local culture and beliefs to sell in different markets. Being a global brand, McDonald’s is present in a number of countries across the globe. The fast food brand does not serve beef burgers in India, because practicing Hindus within the country consider cows to be sacred and prohibit the consumption of beef. Values and beliefs vary from country to country, and organizations should always consider them before stepping into different global markets.

This concept can better be defined through the consumption of soup in both, the United States and Japan. When marketing soup in the United States, restaurant managers and marketers realize that soup works best as an appetizer and builds the appetite for what’s to come, which is why it is best marketed in that role. However, the marketing and positioning of soup would be completely different in the Japanese market. Soup is considered a breakfast drink in Japan, which is why brands market it in that way.

Religious and Ethical Actors

Religious beliefs often dictate the consumption patterns of most users across the globe. Since Muslims, the followers of Islam, are prohibited from eating pork, they don’t have bacon for breakfast or any other meal made out of pork for that matter.

Similarly, religious beliefs set the foundation for ethics as well. The culture of different countries is dictated by the primary religion within the region.

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2. Political Environment

Many political factors in the environment businesses operate in can influence how managers implement strategic decisions and how they formulate ideas for the business. The political environment of a nation determines a number of factors including high tariffs, barriers to entry in a nation, anti-nationalist slogans directed toward foreign brands, bad publicity and a lot more.

While businesses do not want to be involved in modern politics, they do realize that successful growth across countries in the world requires a basic understanding of the laws of the land and how things work in the region. From tax laws to tariffs, business treaties and commerce in general, a number of factors can be influenced by the politics of the region.

These factors are:

• Political climate
• Severity of employee welfare legislation
• Influence of political pressure groups
• Political influence on trade unions
• Protection of special interest groups like consumers, women, minorities
• Simplicity and understandability of government legislation
• Consumer protection laws
• Environmental pollution control legislation
• Government’s view on globalization and trade liberalization
• Political stability
• Political ideology and philosophy of political party in ruling
• Environmental protection laws
• Anti-monopoly laws
• Export restrictions
• Copyright and patent protection

Some of the ways politics can influence businesses include:

Politics and Business Taxes

Businesses with a higher yearly yield are typically taxed at a higher percentage than businesses that earn within a lower bracket. Businesses in the modern economy need to understand the importance of paying taxes and should recognize that there is no way out of the conundrum. Taxation is an important part of business today.

Business owners also keep an eye on the exchange of rhetoric between the ruling party and opposition parties. Opposition parties are often in favor of reducing taxes on bigger organizations. The pressure put on them by the opposition can eventually determine the response of governments toward progressive taxation measures. A major increase in taxation for foreign brands can also scare a number of brands away from the local market.

Employee Protection and Coverage

Businesses expanding operations across the globe have to keep an eye on the individual employee protection and coverage requirements that are in place by ruling parties in different countries. Different countries have different regulations on minimum wage, health benefits and other instances of employee protection and coverage. A detailed look at these legal factors should clear complications away.

International Business Impact

No business can succeed within a bubble. Sure, an organization can operate on a local level and have customers from within the local region or community, but almost all company owners and investors dream for their organization to go big and have a global impact on proceedings around us. Political tensions on a global level can impact local businesses as well, since countries’ economies today are all connected in a certain way.

For instance, the departure of the United Kingdom from the European Union negatively impacted a number of local businesses, which although operated on a local scale, had to look at new ways to do business.

Business and politics have an incredible connection, which is something that we will take a look at in greater detail through the length of this manual. The business world can collide with the world of politics in a number of scenarios to create economic openings for the society at large.

3. Legal Environment

The regulatory environment or the legal framework in most countries is decided by the political party in power within the upper house. The government, hence, has the power to legislate on and discuss matters like managerial remuneration, wage fixation, location of plants, safety and health at work, price control, location of plants, licensing policy, entry of multinationals and export policy.

Most mixed economies with a certain level of control exercised by the government follow the same characteristics – the government puts down the rules of the game, while businesses in the industry are required to follow them to the letter.

Companies that want to operate on a global level should study the law of the land in detail and adapt to the requirements it puts on them. The legal framework of all international countries should be respected for the right results.

4. Technological Factors

New technology can be utilized in a number of ways to counter both, recession and inflation. New machines come with capabilities to reduce production costs and can help businesses succeed in what they do. Current advances in information technology have made it possible for global supply chain players to plan for the future and have also enabled them to distribute their products economically in better quantities than before.

Technology is the means by which a business converts all input, including raw materials, into output in the form of finished goods. By this definition, technology can refer to anything that helps in the production process including machinery, tools, work procedures, equipment and employee skills and knowledge.

In the competitive world of today, breakthroughs in the field of technology can significantly influence the efficiency of an organization itself and the stakeholders that it is associated with. Technology can impact the efficiency of the service market a business is trading in, the suppliers, distributers, customers, competitors, manufacturing processes and marketing processes.

During the last few decades, we have seen a greater focus on technology that promotes communication within and outside of organizations. Optic fibers have facilitated technology in communication, robots have completely changed the face of manufacturing processes, digitalization has enhanced the delivery of sound and image output, lasers have come up as the perfect alternative for scalpels in a number of surgical procedures and computers have helped in the processing and structuring of enormous amounts of data.

Technological advances help open up a number of new markets as well. Since technology is an ever involving concept, organizations have to keep a stringent eye on it. Failure to monitor tech trends and evolve according to the requirements can lead to your products becoming old and obsolete. Keeping an eye on technological trends and advancing with the world as it proceeds forward can help organizations flourish in a competitive market. Organizations can also create new competitive advantages through the use of tech sources.

It is technology that helped Dell implement a new inventory management system and flourish in global markets without inventory in hand. It is technology that has helped banks and financial institutes place a number of ATMs across convenient locations to make transactions easier for everyone involved.

5. International Environment

The international business environment can significantly impact the ability of a business to operate on a global level. Fluctuations of the local currency against those of the foreign country can reduce the assets of the company.

Additionally, the emergence of competitors in the international business environment can also shake the grounds that you stand on. Your local market will most definitely opt for that competitor as well, sooner or later, which is why businesses have to keep giving their best, regardless of whether they have a local competitor or not.

Once the concept of change in the business world today is understood, organizations can successful enter a strategic period of success. Business evaluation is based on identifying the changes in the market and setting objectives accordingly.

Just like you would build good individual habits while achieving and fulfilling personal goals, you should live by the same principles while achieving business objectives. The actions that achieve the KPIs of business growth can be honed through decent business practices and constant evaluation.

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Executive Summary

Chapter 1: The Changing Business Environment Today

Not too long ago, senior executives in larger organizations had a simple goal set for the growth of an organization – stability. Shareholders did meddle in internal affairs, but they were ultimately concerned only with predictable earnings growth. A predictable and accurate earning potential/dividend would get shareholders off their back and give managers the peace of mind they require.

Since so many markets were underdeveloped, leaders could work on annual exercises to deliver on expectations. The strategic plan remained the same across the organization, with only a few modifications for small strategic teams. Prices remained in check, people were happy with their jobs and life was relatively good.

The recent shift toward labor mobility, market transparency, instantaneous communication, global capital flows and the ability to improve with time have blown the comfortable scenario of yesteryears to smithereens. Almost all companies today, from market giants to startups, their collective interest lies in something that was happily avoided and slightly ignored in the past: change.

Challenges of Change

The heightened focus on change presents most senior executives and managers with an unfamiliar challenge of sorts. Almost all organizations today devise their best tactical and strategic plans with an eye on change management. Change in the business environment was welcomed with jubilation, but that very change now presents challenges for businesses trying to cope.

All factors in an organization, from its values to company culture, people and behavior, need to be aligned for the right results. Plans and motives of change do not create the results intended from them. In fact, value is captured and realized through the collective and sustained actions of thousands of employees and the organization.

A long term structural transformation has 4 major characteristics:

1. Scale: The change should affect all or most of the organization as a whole.

2. Magnitude: The change should significantly alter the set status quo.

3. Duration: The change should preferably last for months, if not years.

4. Strategic Importance: The change should be important in relation to the strategic
objectives of the organization.

Many senior executives respect these characteristics, but also realize that real rewards of change can only be reaped if the change occurs at an individual level. Many CEOs and change managers are kept up at night at the thought of how people will react to change, especially since it is now a major part of the workforce. Managers also fret over what can be done to maintain the company’s unique values and original culture over this period of change. Change can have a number of positive attributes, but it can also debilitate progress and all the years of hard work if it isn’t monitored carefully.

Steps for Change Management

The changing business environment has only made senior executives realize the needs of their employees. When change was scarce, organizations wouldn’t worry about ingraining it within their culture and employees, but now that change lies at the very core of business culture, there is greater focus on how it can be managed and the results that can be derived through it.

Some steps organizations and managers can follow today to remain competitive in the changing business environment include:

Addressing the Human Side

Almost any significant transformation in the workplace can create people-issues and complications. New skills and capabilities have to be developed, new leaders will be asked to step up and fill in for responsibilities. Employees will remain skeptical of change in the meanwhile and will have their reservations as always.

Dealing with these issues in a reactive manner can put all morale, efficiency and speed at risk. The first and perhaps the most important attribute of change management should be to focus on the employees directly involved in the process. The change management process can only succeed if the focus remains on employees and what that change means to them. The change management approach should be integrated into the decision making process and should focus on employees as the first point of change.

Starting from the Top

Since change can be inherently unnerving and unsettling for people at all levels of an organization, the attention would definitely turn to the leadership team and CEO for support, strength and direction. Leaders themselves have to be onboard with the new approaches first and should be ready to take drastic measures for the growth of the organization. These drastic measures should be focused on challenging and motivating the organization. Executive teams should be the first to be introduced to the change and should be kept on board throughout the change.

Involving Every Layer in the Firm

As transformation programs progress forward, you should look to involve every layer within the organization. Change efforts should include plans to identify leaders across the organization and give them dedicated instructions on how to manage a change initiative. Since water trickles down, the implementation of the change initiative should start from the top and then trickle down to the bottom.

The change eventually cascades through the organization and achieves the objectives required from it.

Creating Ownership within Workers

Leaders of real change management programs strive to create ownership among the workforce in favor of the change and what it can achieve for the organization. This can be created through a leadership team willing to accept responsibility for the change in all areas they can influence or control. Ownership can be created and reinforced through the use of rewards or incentives. The incentives can either be tangible, in the form of financial compensation, or intangible, in the form of psychological camaraderie and a shared sense of destiny.

Assessing Culture

Almost all successful change management programs pick up intensity and speed as they come down to other lower levels of the hierarchy. This is only possible if the management has done their homework and assessed all attributes of the organization’s culture. Companies often assess culture too late and do not recognize the importance it carries. Through cultural diagnostics, organizations can prepare themselves for change, bring a number of major problems to the surface, define all factors that influence leadership sources and identify conflicts. These diagnostics help in the identification of core values, behaviors and perceptions across all levels of the organization.

In this chapter we further look at how to adapt to change and how to become better at operations.

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Chapter 2: Understanding the Impact of External Economic Activity on Business Growth and Success

For people who are unaware of it, the economy is defined as, “the state of a country or region in terms of the production and consumption of goods and services and the supply of money.”

At a rudimentary level, the economy of a region or country can be defined as its ability to generate and produce money. Before we study the impact of economy on businesses, we will first take a look at how the economy dictates behavioral spending patterns among consumers in a society.

Economic Growth Affects Government Spending and Policymaking

First and foremost, the economy around us affects just how a government acts and behaves. Economic growth plays a necessary part in stimulating business growth and spending. Increased exports and imports usually lead to greater income for businesses through business taxation. In simpler terms, governments get to have an improved cash flow due to an increase in business performance and revenue generation abilities. Once the government generates higher taxation, it eventually leads to higher government spending. Essentially everyone benefits from the process, as organizations can then push the money they earn into different services such as healthcare and other public provisions.

On the flip side, an economic recession or periods of low business revenue generation can reduce government spending and revenue generation. Governments start austerity campaigns and cut down on public expenditures to remove deficits. As a result of this reduced government expenditure and revenue generation, government services and provisions can fall into disrepair and suffer a lot. From healthcare to public transport and road repair, areas that require government funding and spending can reach a stagnation point. The standard of life reduces as a result and the government provisions in the region are neglected.

Public Infrastructure and Services are affected

As we have briefly mentioned in the point above, the economy directly impacts services and public infrastructure. During an economic recession, spending on the general public is reduced by the government. The impact further trickles down as businesses and the general public do not have the buying or purchasing power that they previously had.

Public services and infrastructure are the first to bite, with austerity in the following measures:

• Transport
• Healthcare
• General Maintenance

As a result of government austerity measures, public transport such as trains, trams and buses can experience reduced services and productivity. Moreover, private as well as public businesses do not have enough to spend on renovations, maintenance and new capital products. Healthcare is the first to stagnate during an economic recession. Due to limited resources and a lack of funds, the public may have to wait for longer durations for basic medical treatments and extensive surgeries and operations.

Aside from just this, the general maintenance of existing public goods could decrease as well. This could eventually lead public facilities into disrepair with deteriorating roads. Economic growth can lead to a contrasting situation as it helps improve transport, maintenance and healthcare across the board to boost public satisfaction and other related factors.

Cost of Living Will Fluctuate

For the general public, the main impact of economic fluctuations is felt in the cost and standard of living. The economic conditions in a society have an almost direct impact on the spending ability of our masses. An economic recession can lead to an increase in the cost of living and a drop in the general standard of living. Businesses are also strong armed into increasing their prices as they have to factor in for the growing cost of different raw materials and labor charges.

During periods of recession, the general public expects businesses to reduce prices for improved sales, but the improved revenue wouldn’t be of much use if it comes at a loss. During a period of recession, businesses often have no other alternative than to just increase their prices to make up for the increase in basic costs and the shortfalls in sales and turnover. For instance, a producer of luxury goods, for instance luxury cars, will have to increase prices further because sales volume would definitely be down as compared to what it was previously. People often cut down on their expenditure toward luxury goods during a period of recession. As a result, sales volume for a luxury car manufacturer would be down, and they would have no other option but to make more from the few units they are selling.

The series of events mentioned above has a snowball effect and can make conditions invariably worse than what they are. The snowball effect created as a result of rising prices can lead to hyperinflation in the economy. Hyperinflation is an economic condition where the prices of simple goods reach ridiculous levels – for instance, perhaps an exaggerate one, $10,000 for a loaf of bread. A region’s currency is bound to suffer due to hyperinflation and falls down the dumps. The decrease in currency rates also contributes to the inflation of prices, as imports are now a lot more expensive in relation to the local currency.

During periods of economic growth and prosperity, the general cost and standard of living is either maintained where it is, or it slightly improves for the better. The cost of living remains the same because prices barely change, even during economic prosperity, but due to the growing success of businesses in the industry, businesses make better profits and are able to offer more to employees.

Wages increase for the better, and residents are able to afford a better standard of living.

The Value of Currency Fluctuates

We briefly mentioned the impact the economy can have on a region’s currency. As we have mentioned above, the currency of a region is directly impacted by the economic change in the region. A strong economy more often than not leads to a stronger currency. On the contrary, a weak economy leads to a weak currency. What this means is that the national currency of a country does not have the same buying power in the international market.

For instance, a recession in the United States will lead to a drop in value for the United States dollar. This eventually means that your USD will be able to buy a lot less than what it can right now, when trading with other international currencies. For businesses in the host country, the falling forex rates have a direct impact on profitability and import and export processes. The general public will witness a steep rise in their international purchases, along with the money they have to pay while traveling.

Varying Quality of Life Standards

All of the impacts of changes in economic conditions that we have discussed above eventually go on to directly impact the quality of life in a region. Students for instance would have to work odd jobs to chip in with parents to manage finances. Times of economic recession can be hard on individuals and require everyone to up their game and step up where they can. The standard of living will drop as students have to focus on things other than just their school work and help their parents out in responsibilities that do not really fall under their expenses.

Moreover, the economy can also directly impact the disposable income of a family and the quality of life they enjoy. The quality of life most definitely declines during a recession, families do not have the resources to fund luxury purchases and other necessary equipment at times as well. Alternatively, periods of economic growth signal improvements in the quality of life. Life becomes a lot easier for families to afford luxuries that were previously unavailable to them, such as new electronics and holidays.

The question for all individuals without a relevant background remains, how does the economy actually affect the society around us? How does economic behavior change the way we behave in and live our lives? How does it change the way businesses operate and make growth plans? The economy changes from time to time, how does that dictate the innovation and flexibility that businesses today are required to show? These are all questions that we will look to answer through this chapter.

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Chapter 3: How to Set Objectives for Your Business

In the literal sense of the word, a business objective means something you aim for. It is a goal or an end result that businesses today endeavor to achieve. While goals can be defined as short-term endeavors, objectives last for a longer time and set a long-term aspiration for businesses to follow. Goals could include weekly productivity expectations, monthly sales total or some other short-term objective based on instant results. Goals are essential for businesses, because they help with micro-management and form the roadmap that businesses can follow for success with objectives.

On the flip side, an objective means a long term path for business success over an extended period of time. Objectives are defined as what an organization aspires to achieve over a year of operations. The year itself is broken down into innumerable goals that lay the building blocks to achieve the objectives that businesses have.

Business objectives set a destination for organizations today. As individuals, we usually don’t hop into the car unless we know where we have to go. The same principle applies to business objectives. These objectives act as your destination, the place you want your business to reach. Individuals on executive levels can break down business objectives on a personal level as well to plan their own routine and activities in a way that helps the business achieve objectives. Every objective is unique to every organization, and managers can break them down to achieve an enhanced level of synergy across all sectors and hierarchies of the organization.

Economic Objectives

Economic objectives refer to the objective of profit generation and increasing revenue with time. All other objectives which are tied down to the generation of profit are also covered under economic objectives. The objectives businesses set as part of their economic growth include:

Profit Generation

Profit is the lifeblood of all businesses today. No business can survive in a competitive market without a free flowing stream of profit. In fact, most business entities today operate with the primary objective of profit generation – this is why they were brought into existence in the first place. Profit is earned to ensure the survival of businesses in a tough economy and to ensure positive expansion and growth over time.

Profits help businesses not only establish a positive income stream, but also expand their business and give stakeholders the returns they require. Businesses set other objectives as well that come under economic objectives in order to increase their profits.

Creation of Customers

Creation of new customers is another strategic economic objective that businesses have in mind today. A business unit cannot survive today unless they have new customers to buy their products and services. A business unit can only generate revenue and earn profits when it provides quality goods and services at prices that are reasonable. This can only be done through marketing efforts that attract new customers and sell more to the existing ones as well. Product quality, customer service quality and marketing activities play an important role in this objective.

Constant Innovations

Innovations are improvements that update the service or product standard offered to customers.

Innovations can even be related to the production process or to the distribution of goods to customers. The ultimate aim of an innovation should be toreduce wastage and reduce costs for better results. Business units can work on innovation to reduce costs and adopt better production methods for better results. Businesses are eventually able to increase their sales and revenue by attracting a lot more customers than usual.

Regular innovations and efficiency optimization can help achieve a number of objectives for businesses today. Reduction in cost, achieved through innovations, can help increase profit for the business. There are numerous cases of innovations in the business world today, which were achieved through the drive to optimize productivity and become more efficient.

Optimized Use of Resources

A business can only be run when managers have sufficient funds or capital. The amount of capital invested in the business can be used to procure machinery, employ labor, buy raw materials and generate cash to meet the daily operating expenses. Thus, business activities are a result of numerous resources like materials, machines, money and labor.

The availability of these resources, however, is usually limited. Thus, every entrepreneur should learn how to take calculated risks directed toward the best possible use of these resources.

Why Objectives Matter

A business can never succeed in a competitive market, without knowing what it wants. Most entrepreneurs and managers today fail at setting objectives for your business. Sure, they start well with a solid business idea and plan of implementation, but without a clear idea of where you’re headed or what your objectives are, businesses can stall before they even get running.

Regardless of the industry a business is in, business objectives and goals are necessary to find success. Objective setting and planning is one thing that remains constant or increases in importance with the passage of time. You can’t let go of the process or your objectives as you grow over time. In fact, these objectives become even more important as your business grows because there is more room for you to fail.

We look at all other kind of objectives as well in this chapter and study them in great detail.

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Chapter 4: Metrics for Measuring Business Success

The metrics and the KPIs you choose for your business should ultimately help you achieve your objective. Completely unrelated metrics can give you a false sense of security, while your business diverts from the actual objectives it has set out for itself.

Start the progress by studying high level metrics that are crucial to the success of your business. Such metrics include net income or days to close. These metrics can then be followed up with a series of KPIs that help your team improve performance and become a more potent workforce. Successful KPIs help businesses track progress and monitor efficiency.

Metrics That Every Organization Should Track

What’s the best way to measure your business’s performance? Well, while there are multiple correct approaches and metrics for the job- one way not to do it is by following your gut. Running a business requires thorough understanding of the sales and financial results your business is able to achieve and an in-depth look at what can be done to better them.

This process of improvement cannot be implemented without the incorporation of relevant metrics that help in the tracking process. Your metrics should make tracking easier for you, and ensure that you are able to not only monitor, but also work on your performance.

In this section we explore a number of business metrics that are popularly used by businesses to explore company performance and to track your output. These metrics are discussed in greater detail, along with many more in the actual course manual.

Sales Revenue

Sales Revenue is an important performance metric and is by far the one you should always have your eyes on. We choose to have this metric mentioned right at the top, because it tells a lot about your company and the progress you’ve made or are capable of making.

Net Profit Margin

The net profit margin basically helps indicate just how efficient your company is currently at generating profits in comparison to the revenue generated. Most business owners evaluate their performance based on the revenue figure alone, without computing for net profit. Even when they do consider net profit, they look at both these figures in their individuality, without contemplating the impact they can have with regards to one another.

Gross Profit Margin

The gross profit margin is computed in a similar manner to that of the net profit margin, with the only difference being in the values of the profit considered. Taking the example we mentioned above forward, let’s say the manufacturer has a gross profit of $60,000 against the $100,000 of sales. The gross profit would be calculated by dividing it by the total sales revenue and multiplying by 100 if you want the answer in percentage. Your gross profit margin can be improved by adding efficiency to your production and sale processes. The more efficient you are in these two processes, the more profitable your business will be.

Sales Growth Year-to-Date

Similar to other profitability metrics, you can improve how you perform on this metric by working on your marketing and sales activities. Sales growth can also be boosted through marketing efforts that help give you the coverage you need across different platforms.

Cost of Customer Acquisition

The cost of customer acquisition can be improved by working on product or service quality and ensuring positive reviews and word of mouth marketing from current customers. This will help market your product or service naturally and will further help bring in new customers without spending lavishly on marketing processes. Also, referrals and recommendation processes can be implemented here.

Customer Loyalty and Retention

The results you get through this formula will help determine the number of customers that are loyal to you. The customer loyalty or retention ratio can be significantly improved through excellent customer care services and by delivering the highest quality of services to your customers. Consistent quality complemented with good customer service can help give your customers the motivation they require to stick with you.

Net Promoter Content

This metric is related to marketing and can be measured on a ten-point scale by conducting interviews and customer surveys. All customers with a rating of 8 or more can be considered promoters. Those coming in between 5 to 7 can be considered passive and those below 5 can be considered detractors. The data or substance for this ranking system is gathered through emails or customer surveys. The evaluation and data structuring process will take some time, but it will eventually give you enough leverage to rank your customers in a manner that you want. The net promoter score can eventually be found out by subtracting the percentage of detractors from the total percentage of promoters.

Your customer loyalty and net promoter score can be improved by enhancing your customer services and by delivering the quality standard that your customers expect from your brand.

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Chapter 5: Evaluating Business Performance in the Modern Economy

Once their business is well set and running well, many entrepreneurs may feel inclined to let things continue in the same manner as before, without changing much about the processes that are performed at the core of the business.

However, initial success and customer traffic shouldn’t be taken as an indication to slack off. As soon as your business finds its initial footing, you should start planning again and reviewing your progress. After the crucial initial period has passed, you should regularly review the progress you make as a business and identify opportunities that can help you make the most of the position you find yourself in in the market. Entrepreneurs need to constantly evaluate their business and find new areas where they can take their business. As part of this strategy, entrepreneurs will even have to go back to their business plan and update it to match their current requirements. All developments you’ve noted should be strategically overseen and plans ready to counter threats.

This chapter takes you through the very important process of planning for your business’s success. Progress is a constant part of operations for all businesses by all means today and shouldn’t be compromised on at all. This guide takes you through the evaluation process and also suggests actions and processes that can help you through it.

Importance of Evaluating Business Progress

It is easy for entrepreneurs and managers to get overwhelmed by the day to day operations of their business and focus only on the current operations, without worrying about what the future holds. Once a business is up and running, it can pay dividends for entrepreneurs to think about strategic plans for the long-term. The importance of evaluation and progress becomes even more important as you take in more staff, appoint managers, create departments within the organization and become distanced from the usual everyday running of your business.

Reviewing your business’s progress can be particularly helpful if you feel:

• Uncertain about just how your business is performing and aren’t sure about what to do. This uncertainty can more often than not land businesses in hot waters.

• Unsure whether or not you’re getting the best possible output from the resources you have invested in your business. The possibilities here are endless and you should ensure you get the most out of your opportunities.

• Your business plan is out of data and needs serious updates. This can be true if you’ve been in business for over a year and still haven’t touched or considered your business plan in full.

• Your business is headed in the right direction. This question comes to mind when you’re sure of which direction you want your business to go in, especially with regards to a few metrics. You should always track business progress and determine whether it is in line or contrary to the direction you had set.

• The business is not responding to market demands in a manner that it should.

Evaluating progress can also come in handy if you have decided to take your business to the next level as far as output and operational efficiency are concerned.

Strategizing as Part of Business Evaluation

Strategizing is an important part of business evaluation as it gives you an opportunity to determine what’s right for you in the long run. Questions you can ask yourself while setting the strategy for your business include:

• What is the direction I want for my business? To determine the right answer to this question, you need to look at where you currently stand, where you see yourself over the period of the next three to five years, and how you plan to reach the end goal you have in mind for yourself.

• What are the recommended markets for your business now and in the future? Which markets should you step into, how will they change what you do and what your business needs to do to be involved in these multiple sectors?

• How can you gain market advantage? How can your business perform better than the competitors you currently have in the market of your choice, identified in the question above?

• What resources do you require to succeed in the modern economy? What skills, technical knowledge, relationships, finance, assets and managerial facilities and competence do you require to compete in the global market? Have these requirements changed since you started?

• What is the business environment that you’re currently part of? What external factors have a role to play in affecting your business’s ability to grow and compete?

• How can you measure the success of your organization? Remember that all measures of performance will change as your business matures and grows in stature.

It is doubtful for entrepreneurs to be able to answer these questions on their own, which is why they can involve their advisors and other trusted personnel to come up with reasonable answers.

This chapter will take a look at the different methods for strategizing in the business economy today and how they work well for different businesses.

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Chapter 6: Porter’s Five Forces

Porter’s Five Forces is a framework used to analyze the level of competition within an industry and determine just how that competition impacts you and your business. The five forces can prove to be especially useful when businesses are starting fresh, or are thinking of joining a new business.

According to Porter and his five forces, the competition in a certain industry comes through a number of factors, other than just the competitors themselves. Porter believed that the state of competition in an industry is dependent on a number of factors, including the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the existing industry rivalries and the threat of substitute products or services.

The collective strength of all these forces together helps determine the profit potential of an industry and what it means to the average business. If all of these five forces are intense, as is the case with the airline industry, then almost no company in the industry will be able to earn attractive returns on their investment. However, if the forces are mild, like is the case in the soft drink industry, then there is significant room for higher returns and interest rates.

We will elaborate on each force in this chapter, with a concurrent example of the airline industry to build concepts further. The airline industry gives a helpful blue print to understand all forces of the analysis and will help better understand and comprehend the situation.

We conduct our analysis by discussing a few factors affecting each force outlined by Porter along with a guide on how businesses can use this analysis. With this done, we will move on to discuss each force in detail and illustrate it further through an example from the airline industry. You can reach out to the course manual to read all this.

Ways Porter’s Five Forces Can Help You Succeed in Business

Most business owners and managers spend their whole careers thinking of competitive forces that can shape strategy. The competitive forces in most industries aren’t static, which is why routine analyses of your industry are vital for success.

Porter’s five forces help in this analysis by adding value in the following stages:

When You Start a Business

Before you take the leap of faith into an unfamiliar industry without prior knowledge of what works and does not work in the industry, it is necessary that you run and understand Porter’s five forces analysis in full to get the lay of the land.

Understanding the factors covered in the five force analysis can be necessary for success later in your business life. Be realistic about the stability in the market and also determine how new entrants can influence your market share.

When You’re Evaluating Profit Potential

Porter’s five forces can be the go-to solution to evaluate the profit potential of your organization and find where you stand with regards to profitability and success. The five force analysis can be an excellent way to get an accurate picture of what the future holds for you. As a business owner, it is necessary that you stay up to date with how the industry is changing and implement the dynamic solution of Porter’s Five Forces. Make sure that all decisions are based on accurate information.

When You’re Determining the Efficacy of a Strategy

Porter’s five forces analysis can help you determine the effectiveness of a strategy after it is completed. The analysis will help give you results and updates on whether the strategy worked or not and will also help guide you forward in your future endeavors.

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Chapter 7: SWOT Analysis

A SWOT Analysis is an analysis tool that helps asses four of the key aspects of your business; Strengths, Weaknesses, Opportunities and Threats.

Businesses today can use SWOT Analysis to determine their current standing and to get an idea of future growth potential. Better still, organizations and managers can use the platform to craft actionable strategies for the future that help distinguish them from the competitors in the industry.

Strengths

Strengths are all the things that your organization does particularly well, or better than the competition in your market. In a way, your strengths should distinguish you from your competition and make you stand out as a quality provider. When you’re thinking of strengths, it is nice to brainstorm and think of all the advantages that your organization has over other organizations in the industry. These advantages can work as factors to motivate your staff forward. The factors can include better staff skill set, better managerial expertise, strong set of manufacturing processes, use of quality supplies and materials among much more.

Weaknesses

Weaknesses, similar to strengths, are inherent features found within organizations. As part of these weaknesses, you should focus on the inherent features of your organization and the people, resources, procedures and systems involved in your workplace. Think about all the areas of your workplace that you would like to improve and the sort of practices you should realistically avoid to improve these areas.

Opportunities

Opportunities are all chances and openings that signal some positive event is about to take place. Opportunities are an important part of the SWOT analysis, as they help determine the future feasibility of your organization. Organizations need to monitor opportunities in a consistent manner to gather some fruit for them and to ensure that they reap the results that organizations expect from them.

Threats

Change is by far the only constant in the world of business, and if you’re not adapting to new technologies and production practices, then your growth will eventually stall and you will fall prey to the innovation in the market. The ever evolving technology standards around us are an ever-present threat, which require organizations to continuously update their processes for the better.

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Chapter 8 Root Cause Analysis

Business analysis methods, as tricky as they may sound, can often be understood through real life examples related to them. The simplest and by far the easiest way to understand root cause analysis is to think of it through the outlook of common everyday problems. Imagine you’re sick and throwing up at your workplace, the best thing to do is head over to a doctor and find out the root cause behind your sickness. If your car stops working all of a sudden or develops a problem, the best course of action would be to head over to a mechanic and have them inspect the vehicle to unearth the root cause of the problem.

In both cases above, an expert with an understanding of problems in the relevant niches will help direct you to the root cause of the problem in your body or in your car. Similarly, if your business is not performing in the manner you want, a root cause analysis will find the primary reason behind the dip in performance and provide solutions to it.

For each of the daily life problems we have outlined above, you can easily find a solution to treat the symptoms and mitigate the impact. When you are continuously throwing up at work, you can take a day off and stay at home with a bucket close to you. For a problematic car, the best alternative would be to find a bus and leave the car at home. These solutions or alternatives, however, only provide a solution to the symptoms of the problem and do not delve deep down into what actually caused the problem, or the underlying reason behind those symptoms – these symptoms could either be a stomach infection because of the new Indian restaurant you tried last night or a broken alternator in your car. A root cause problem goes into the depth of the problem and not only analyzes it, but also finds ways to fix it.

In this chapter we will not only look at what root cause analysis means but will also walk you through common techniques and methodologies for the analysis, along with a few relevant examples where necessary.

What Is Root Cause Analysis?

While the analogies above might have already built your understanding of the subject matter, it is necessary to study what a Root Cause Analysis is in its literal terms. Root Cause Analysis or RCA is the elaborate process of discovering the root cause behind a specific problem in the processes of your organization. The process helps identify appropriate solutions. RCA assumes that it is better and much more effective for businesses to identify and solve underlying issues rather than just treating the symptoms and looking for ad hoc solutions.

Root cause analysis is not easy to perform and requires a collection of techniques, methodologies and principles. All of these solutions come together to help in the identification of the root cause behind a problem. RCA allows businesses to go beyond the superficial cause on paper and find the actual reason behind problems in the supply chain.

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Chapter 9 VMOST Analysis

V-MOST analysis is based on a tool of sorts that helps you determine whether all your business activities and objectives are aligned with your business’s growth strategy. The main benefit of this analysis is breaking down the core components of a strategy into an easily readable format for everyone to understand. The new format is easy to consume for everyone involved.

VMOST stands for:

• Vision
• Mission
• Objectives
• Strategy
• Tactics

Presenting a strategy in the simple format of a VMOST analysis can help businesses understand and identify areas in the organization that aren’t aligned in a format that they would like for future growth. The process also determines where future objectives fit in the organization and the role they play in strategic planning and growth.

What Is the Difference Between VMOST Analysis and MOST Analysis?

The VMOST analysis is an upgrade on the MOST Analysis, which is another tool used by businesses to evaluate the alignment of their strategies and objectives. The difference can easily be understood through the acronyms for both these analyses. VMOST is an upgrade on MOST because it incorporates the Vision statement within the analysis process as well, while MOST does not. Apart from this minor difference, both these analysis are almost the same.

What Is VMOST Analysis Used For?

VMOST Analysis is used to:

• Communicate a strategy
• Get feedback on strategic plans
• Check the alignment of business units
• Structure a strategic plan

A VMOST analysis is also used to devise and strategize new objectives for the future. The analysis can also be used to:

• Define new strategies
• Test out new strategies

Advantages and Disadvantages of VMOST Analysis

The VMOST Analysis comes with a number of advantages and disadvantages that make the process simpler or more complicated.

The advantages of VMOST Analysis are:

• Teams using it all understand the direction and focus
• Misalignment becomes clearer and so can be removed
• A clean and simple structure to follow
• It can be helpful when communicating strategy

On the contrary, there are also a few disadvantages of VMOST Analysis which can create a problem for firms:

• The analysis requires tools and instructions to be considered successful

• There is no formal or accurate scoring method to help organizations determine the right strategy or the right growth approach. Without the right approach, firms are limited in choice.

Tools That Work for V-MOST Analysis

Since the VMOST Analysis is usually used to map out strategies, there are a number of tools that can prove to be handy while using it. The process should start with a strategic discussion of your options based on the Ansoff Matrix for generating ideas. Businesses should also use the SFA Matrix to help score their potential strategic plans for future growth and success.

Regardless of whether you’re using V-MOST for future growth or just a routine checkup, you should run it concurrently with other tools to help you understand the wider business environment and our growth potential. The SWOT Analysis can help you determine both, the internal and external environment of your business, and come up with ways for strategic success with VMOST Analysis. The external market can also be better understood through the use of PESTLE analysis or Porter’s Five Forces.

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Chapter 10: Pareto Principle

The Pareto Principle was originally coined for the Italian market, where it meant to identify how 80 percent of the wealth in Italy was owned by only 20 percent of the population. Ever since this observation was made, the Pareto Principle has become a guiding light for businesses and individuals to increase efficiency and improve operations.

To speak in more general terms, the Pareto Principle is an observation of sorts, not a law, which points out that many things in life are distributed in an uneven manner.
The Pareto Principle helps businesses in the following ways:

Increased Productivity

The Pareto Principle can be really handy in determining the areas you should focus your efforts on and the resources that you should prioritize in order to achieve the efficiency and results you require.

Companies and managers can utilize the 80/20 rule to focus on the critical 20 percent of all tasks that will produce 80 percent of the results. The percentages, as we mentioned earlier, can change based on the given scenario in different firms, but the fact of the matter is that Pareto’s Principle teaches managers to not waste time on the trivial many, but instead, focus on the vital few that are responsible for producing efficient results.

Increased Profitability

The sales industry has recognized the idea that 20 percent of their salespeople are responsible for 80 percent of the revenue that is generated. Based on the training level of your staff and the objectives you have for your business, you can identify whether the Pareto Principle should be utilized to influence your efforts and focus on the 20 percent that are working their skin off or on the other 80 percent that are goofing around and not meeting targets. Different techniques will have to be implemented when working on these disparate groups.

Website Optimization

A standard overview of your business’s website will indicate that 80 percent of all traffic comes on 20 percent of the web pages. 20 percent of all pages attracting most views and user attention are critical pages that should usually be on your radar. This allows your digital endeavors to progress at a faster rate without any interruptions.

The Pareto Principle is not a strategy to eliminate all non-critical processes and factors in a given situation; rather, it should be considered an idea that helps you put focus where it’s due and yield great results from better focus and strategizing.

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Chapter 11: Appraising Future Investments

For investment appraisals to be successful, businesses need to identify and set a culture that facilitates the identification of potentially profitable investments in the organization. Businesses should run evaluations regularly, using the techniques we outlined earlier, to develop investment opportunities and to capitalize on opportunities to grow further. Any ideas generated at this stage should fit within the overall strategy of the business or follow the VMOST standards discussed above.

Why Do Organizations Invest?

Generally, businesses invest in different projects and plans to increase their profits, to achieve growth or to signal improvements in their operations. Supply should always match demand, which is why organizations invest in opportunities from time to time. Capital investments in an organization can also be related to reducing manufacturing costs and increasing productivity costs within the organization.

In Not-for-Profit organizations, the investment process is driven by the need to become more efficient and effective in core operations. Investments targeting growth potential help organizations open new doors and become more profitable or efficient.

As part of their due diligence before the investment process, organizations need to know whether the investment process will yield any benefits or not. This is done through proposals and appraisal processes for each investment opportunity.

Investment Proposals

All details related to an investment should be brought together and discussed whenever an investment is proposed. This is something that usually falls under the finance department or the accountant’s role. The amount of information required here varies according to the type and details of the investment. Fewer details are likely to be discussed and brought to the table when discussing more routine investment decisions, like replacing cars for all members of the sales team. These are routine capital investments and the appraisal process for them isn’t as in-depth as it will be for bigger projects.

Other investments signaled toward the growth of the organization will require in-depth appraisals with a focus on providing and mentioning as much information as is possible. Clear objectives should be outlined so that there is a clear understanding within the business of what is required and what should be achieved. It is also necessary for all alternatives to be discussed and documented during the appraisal process for bigger projects. The presence of alternatives can help in a proper appraisal, with the concept of opportunity cost at the core as well. Different projects and alternatives can be put on the table and a conclusion can be reached as to which one works best for the business.

Information related to the risks involved, the assumptions made about future progress, the likely impact this investment will have on cash flows and how the investment fits into the overall strategy of the organization should be discussed in detail. Input from the management related to the managerial aspects of the investment should also be recorded.

Once the organization and management team have gathered all information and evaluated it, the information should be presented to the final decision makers of the organization. It is here that the investment process is modified, approved or rejected by the higher ups. In a small-scale business, the approval process is usually managed by the owner themselves. The process in larger organizations with bigger investment decisions is a bit more detailed and has multiple processes in place for approval.

Managers in larger organizations are aware of the level of authority they host and take investment decisions based on approval from higher-ups and the appraisal carried out by the organization. A formal sign-off process can reduce poor proposals from being passed and increase the efficiency businesses experience due to their investment decisions.

Financial Analysis

There are a number of appraisal and financial techniques in place to assess the financial terms of an investment proposal. These methods of evaluation and analysis are based on the projected future cash flows that investments would be able to generate for the organization. The processes and investment appraisal techniques used here include:

• Payback Period: The payback period calculates the number of years it will take for the business to recover the original amount that was invested in the plan.

• Accounting Rate of Return: Accounting Rate of Return or ARR calculates the return from the project as a percentage of the capital that is employed in it.

• Net Present Value: Net Present Value is a discounted technique used to convert all future earnings through the project into current day cash equivalents. The NPV of a project can vary based on predictions related to the discount rate.

• Discounted Payback: Discounted payback is similar to the payback period, only that the cash flows considered in this method are discounted before the actual payback period is found out.

• Internal Rate of Return (IRR): The Internal Rate of Return or IRR of a project is determined by calculating the appropriate discount rate of the product. The IRR is the discount rate at which an NPV of zero will be recorded.

We discuss these techniques of investment appraisal in greater detail within the chapter in the course manual for better inference and comprehension.

Implementation and Review

While these investment appraisal techniques have been around for ages, there is some uncertainty in the cash flow predictions used as part of them and the results generated through them. Investments should be timed to unearth their true potential and the appraisal process should evaluate proposals based on these factors. Implementation of the project is necessary to ensure the expected growth curve.

A review after the investment is completed should be carried out to determine the efficiency of the process. This will help organizations determine the efficacy of investment appraisal processes and the techniques that best stood out.

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Chapter 12: Implementing Improvements and Growth Measures

There are a number of key metrics that can help organizations measure growth strategies and ensure improvements across the board today.

Metrics and KPIs are best defined as:

Metrics are measures that are used to monitor and evaluate all the different parts of your business. I believe for our purposes metrics are broader than KPIs.

KPIs (Key Performance Indicators) are a subset of metrics, and let you measure specific, highly critical areas of your business. Specifically, you should be looking at how KPIs are trending, looking for improvements, and determining how you can improve overall performance.

Tracking metrics and KPIs related to your business can help you not only improve overall results, but also align your people and processes in a unified manner. It gives you a series of benefits that eventually help you improve your operations.

The importance of metrics can be determined through the benefits you can derive through them. These benefits include:

• Metrics and KPIs help you measure financial performance. They are also extremely vital to manage your cash flow and ensure a healthy stream of income.

• Metrics and KPIs can reveal the truth about your business. They help you understand the progress your business is making from the highest level, right down to every individual employee.

• Metrics and KPIs give top management executives and employees a fair idea of what’s important for the business. Once employees and top managerial employees see what is being measured, they are able to tell what matters to the business and what they should be focusing on.

• Metrics also provide an actionable way for businesses to track their progress and ensure that they are on the right track and aren’t missing out on anything that can determine future profitability or success.

• Metrics and KPIs also highlight issues that otherwise go unnoticed in the organization. Due to these metrics, efficiency and productivity within an organization are given an additional boost.

Clarify the Purpose of Leadership in Your Organization

With the growing surge in cross-functional teams, the role of the leader in organizations is a lot more prominent. As the business environment changes at a rapid pace, leaders have to act as liaisons and integrators that enable the coordination of disparate functions across the organization. Based on leadership theories from prominent psychologists, we can list down three major types of leadership styles:

• Administrative Leadership: This leadership style is focused on coordinating and structuring organizational activities in a bureaucratic manner.

• Adaptive Leadership: Adaptive leadership is what is seen when a meeting that starts with opposing viewpoints and different arguments ends on a positive note of consensus.

• Enabling Leadership: Enabling leadership refers to the conditions leaders set to enable new behaviors, learning and innovation.

The purpose and type of leadership should shift based on the situation organizations find themselves in, and the steps that should be taken to counter that situation.

We conclude this chapter by discussing a number of other considerations that businesses should keep in minds while participating and entering the business environment. The key to success in the business world today is to develop a culture of evaluation. Tracking metrics and KPIs related to your business can help you not only improve overall results, but also align your people and processes in a unified manner. It gives you a series of benefits that eventually help you improve your operations.

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Curriculum

Business Transitions – Workshop 1 – Business Evaluation

1. The Changing Business Environment Today
2. Understanding The Impact of Economic Activity on Business Growth and Success
3. How to Set Objectives for Your Business?
4. Metrics for Measuring Business Success
5. Evaluating Business Performance in the Modern Economy
6. Porter’s Five Forces
7. SWOT Analysis
8. Root Cause Analysis
9. VMOST Analysis
10. Pareto Principle
11. Appraising Future Investments
12. Implementing Improvement and Growth Measures

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Distance Learning

Introduction

Welcome to Appleton Greene and thank you for enrolling on the Business Transitions corporate training program. You will be learning through our unique facilitation via distance-learning method, which will enable you to practically implement everything that you learn academically. The methods and materials used in your program have been designed and developed to ensure that you derive the maximum benefits and enjoyment possible. We hope that you find the program challenging and fun to do. However, if you have never been a distance-learner before, you may be experiencing some trepidation at the task before you. So we will get you started by giving you some basic information and guidance on how you can make the best use of the modules, how you should manage the materials and what you should be doing as you work through them. This guide is designed to point you in the right direction and help you to become an effective distance-learner. Take a few hours or so to study this guide and your guide to tutorial support for students, while making notes, before you start to study in earnest.

Study environment

You will need to locate a quiet and private place to study, preferably a room where you can easily be isolated from external disturbances or distractions. Make sure the room is well-lit and incorporates a relaxed, pleasant feel. If you can spoil yourself within your study environment, you will have much more of a chance to ensure that you are always in the right frame of mind when you do devote time to study. For example, a nice fire, the ability to play soft soothing background music, soft but effective lighting, perhaps a nice view if possible and a good size desk with a comfortable chair. Make sure that your family know when you are studying and understand your study rules. Your study environment is very important. The ideal situation, if at all possible, is to have a separate study, which can be devoted to you. If this is not possible then you will need to pay a lot more attention to developing and managing your study schedule, because it will affect other people as well as yourself. The better your study environment, the more productive you will be.

Study tools & rules

Try and make sure that your study tools are sufficient and in good working order. You will need to have access to a computer, scanner and printer, with access to the internet. You will need a very comfortable chair, which supports your lower back, and you will need a good filing system. It can be very frustrating if you are spending valuable study time trying to fix study tools that are unreliable, or unsuitable for the task. Make sure that your study tools are up to date. You will also need to consider some study rules. Some of these rules will apply to you and will be intended to help you to be more disciplined about when and how you study. This distance-learning guide will help you and after you have read it you can put some thought into what your study rules should be. You will also need to negotiate some study rules for your family, friends or anyone who lives with you. They too will need to be disciplined in order to ensure that they can support you while you study. It is important to ensure that your family and friends are an integral part of your study team. Having their support and encouragement can prove to be a crucial contribution to your successful completion of the program. Involve them in as much as you can.

Successful distance-learning

Distance-learners are freed from the necessity of attending regular classes or workshops, since they can study in their own way, at their own pace and for their own purposes. But unlike traditional internal training courses, it is the student’s responsibility, with a distance-learning program, to ensure that they manage their own study contribution. This requires strong self-discipline and self-motivation skills and there must be a clear will to succeed. Those students who are used to managing themselves, are good at managing others and who enjoy working in isolation, are more likely to be good distance-learners. It is also important to be aware of the main reasons why you are studying and of the main objectives that you are hoping to achieve as a result. You will need to remind yourself of these objectives at times when you need to motivate yourself. Never lose sight of your long-term goals and your short-term objectives. There is nobody available here to pamper you, or to look after you, or to spoon-feed you with information, so you will need to find ways to encourage and appreciate yourself while you are studying. Make sure that you chart your study progress, so that you can be sure of your achievements and re-evaluate your goals and objectives regularly.

Self-assessment

Appleton Greene training programs are in all cases post-graduate programs. Consequently, you should already have obtained a business-related degree and be an experienced learner. You should therefore already be aware of your study strengths and weaknesses. For example, which time of the day are you at your most productive? Are you a lark or an owl? What study methods do you respond to the most? Are you a consistent learner? How do you discipline yourself? How do you ensure that you enjoy yourself while studying? It is important to understand yourself as a learner and so some self-assessment early on will be necessary if you are to apply yourself correctly. Perform a SWOT analysis on yourself as a student. List your internal strengths and weaknesses as a student and your external opportunities and threats. This will help you later on when you are creating a study plan. You can then incorporate features within your study plan that can ensure that you are playing to your strengths, while compensating for your weaknesses. You can also ensure that you make the most of your opportunities, while avoiding the potential threats to your success.

Accepting responsibility as a student

Training programs invariably require a significant investment, both in terms of what they cost and in the time that you need to contribute to study and the responsibility for successful completion of training programs rests entirely with the student. This is never more apparent than when a student is learning via distance-learning. Accepting responsibility as a student is an important step towards ensuring that you can successfully complete your training program. It is easy to instantly blame other people or factors when things go wrong. But the fact of the matter is that if a failure is your failure, then you have the power to do something about it, it is entirely in your own hands. If it is always someone else’s failure, then you are powerless to do anything about it. All students study in entirely different ways, this is because we are all individuals and what is right for one student, is not necessarily right for another. In order to succeed, you will have to accept personal responsibility for finding a way to plan, implement and manage a personal study plan that works for you. If you do not succeed, you only have yourself to blame.

Planning

By far the most critical contribution to stress, is the feeling of not being in control. In the absence of planning we tend to be reactive and can stumble from pillar to post in the hope that things will turn out fine in the end. Invariably they don’t! In order to be in control, we need to have firm ideas about how and when we want to do things. We also need to consider as many possible eventualities as we can, so that we are prepared for them when they happen. Prescriptive Change, is far easier to manage and control, than Emergent Change. The same is true with distance-learning. It is much easier and much more enjoyable, if you feel that you are in control and that things are going to plan. Even when things do go wrong, you are prepared for them and can act accordingly without any unnecessary stress. It is important therefore that you do take time to plan your studies properly.

Management

Once you have developed a clear study plan, it is of equal importance to ensure that you manage the implementation of it. Most of us usually enjoy planning, but it is usually during implementation when things go wrong. Targets are not met and we do not understand why. Sometimes we do not even know if targets are being met. It is not enough for us to conclude that the study plan just failed. If it is failing, you will need to understand what you can do about it. Similarly if your study plan is succeeding, it is still important to understand why, so that you can improve upon your success. You therefore need to have guidelines for self-assessment so that you can be consistent with performance improvement throughout the program. If you manage things correctly, then your performance should constantly improve throughout the program.

Study objectives & tasks

The first place to start is developing your program objectives. These should feature your reasons for undertaking the training program in order of priority. Keep them succinct and to the point in order to avoid confusion. Do not just write the first things that come into your head because they are likely to be too similar to each other. Make a list of possible departmental headings, such as: Customer Service; E-business; Finance; Globalization; Human Resources; Technology; Legal; Management; Marketing and Production. Then brainstorm for ideas by listing as many things that you want to achieve under each heading and later re-arrange these things in order of priority. Finally, select the top item from each department heading and choose these as your program objectives. Try and restrict yourself to five because it will enable you to focus clearly. It is likely that the other things that you listed will be achieved if each of the top objectives are achieved. If this does not prove to be the case, then simply work through the process again.

Study forecast

As a guide, the Appleton Greene Business Transitions corporate training program should take 12-18 months to complete, depending upon your availability and current commitments. The reason why there is such a variance in time estimates is because every student is an individual, with differing productivity levels and different commitments. These differentiations are then exaggerated by the fact that this is a distance-learning program, which incorporates the practical integration of academic theory as an as a part of the training program. Consequently all of the project studies are real, which means that important decisions and compromises need to be made. You will want to get things right and will need to be patient with your expectations in order to ensure that they are. We would always recommend that you are prudent with your own task and time forecasts, but you still need to develop them and have a clear indication of what are realistic expectations in your case. With reference to your time planning: consider the time that you can realistically dedicate towards study with the program every week; calculate how long it should take you to complete the program, using the guidelines featured here; then break the program down into logical modules and allocate a suitable proportion of time to each of them, these will be your milestones; you can create a time plan by using a spreadsheet on your computer, or a personal organizer such as MS Outlook, you could also use a financial forecasting software; break your time forecasts down into manageable chunks of time, the more specific you can be, the more productive and accurate your time management will be; finally, use formulas where possible to do your time calculations for you, because this will help later on when your forecasts need to change in line with actual performance. With reference to your task planning: refer to your list of tasks that need to be undertaken in order to achieve your program objectives; with reference to your time plan, calculate when each task should be implemented; remember that you are not estimating when your objectives will be achieved, but when you will need to focus upon implementing the corresponding tasks; you also need to ensure that each task is implemented in conjunction with the associated training modules which are relevant; then break each single task down into a list of specific to do’s, say approximately ten to do’s for each task and enter these into your study plan; once again you could use MS Outlook to incorporate both your time and task planning and this could constitute your study plan; you could also use a project management software like MS Project. You should now have a clear and realistic forecast detailing when you can expect to be able to do something about undertaking the tasks to achieve your program objectives.

Performance management

It is one thing to develop your study forecast, it is quite another to monitor your progress. Ultimately it is less important whether you achieve your original study forecast and more important that you update it so that it constantly remains realistic in line with your performance. As you begin to work through the program, you will begin to have more of an idea about your own personal performance and productivity levels as a distance-learner. Once you have completed your first study module, you should re-evaluate your study forecast for both time and tasks, so that they reflect your actual performance level achieved. In order to achieve this you must first time yourself while training by using an alarm clock. Set the alarm for hourly intervals and make a note of how far you have come within that time. You can then make a note of your actual performance on your study plan and then compare your performance against your forecast. Then consider the reasons that have contributed towards your performance level, whether they are positive or negative and make a considered adjustment to your future forecasts as a result. Given time, you should start achieving your forecasts regularly.

With reference to time management: time yourself while you are studying and make a note of the actual time taken in your study plan; consider your successes with time-efficiency and the reasons for the success in each case and take this into consideration when reviewing future time planning; consider your failures with time-efficiency and the reasons for the failures in each case and take this into consideration when reviewing future time planning; re-evaluate your study forecast in relation to time planning for the remainder of your training program to ensure that you continue to be realistic about your time expectations. You need to be consistent with your time management, otherwise you will never complete your studies. This will either be because you are not contributing enough time to your studies, or you will become less efficient with the time that you do allocate to your studies. Remember, if you are not in control of your studies, they can just become yet another cause of stress for you.

With reference to your task management: time yourself while you are studying and make a note of the actual tasks that you have undertaken in your study plan; consider your successes with task-efficiency and the reasons for the success in each case; take this into consideration when reviewing future task planning; consider your failures with task-efficiency and the reasons for the failures in each case and take this into consideration when reviewing future task planning; re-evaluate your study forecast in relation to task planning for the remainder of your training program to ensure that you continue to be realistic about your task expectations. You need to be consistent with your task management, otherwise you will never know whether you are achieving your program objectives or not.

Keeping in touch

You will have access to qualified and experienced professors and tutors who are responsible for providing tutorial support for your particular training program. So don’t be shy about letting them know how you are getting on. We keep electronic records of all tutorial support emails so that professors and tutors can review previous correspondence before considering an individual response. It also means that there is a record of all communications between you and your professors and tutors and this helps to avoid any unnecessary duplication, misunderstanding, or misinterpretation. If you have a problem relating to the program, share it with them via email. It is likely that they have come across the same problem before and are usually able to make helpful suggestions and steer you in the right direction. To learn more about when and how to use tutorial support, please refer to the Tutorial Support section of this student information guide. This will help you to ensure that you are making the most of tutorial support that is available to you and will ultimately contribute towards your success and enjoyment with your training program.

Work colleagues and family

You should certainly discuss your program study progress with your colleagues, friends and your family. Appleton Greene training programs are very practical. They require you to seek information from other people, to plan, develop and implement processes with other people and to achieve feedback from other people in relation to viability and productivity. You will therefore have plenty of opportunities to test your ideas and enlist the views of others. People tend to be sympathetic towards distance-learners, so don’t bottle it all up in yourself. Get out there and share it! It is also likely that your family and colleagues are going to benefit from your labors with the program, so they are likely to be much more interested in being involved than you might think. Be bold about delegating work to those who might benefit themselves. This is a great way to achieve understanding and commitment from people who you may later rely upon for process implementation. Share your experiences with your friends and family.

Making it relevant

The key to successful learning is to make it relevant to your own individual circumstances. At all times you should be trying to make bridges between the content of the program and your own situation. Whether you achieve this through quiet reflection or through interactive discussion with your colleagues, client partners or your family, remember that it is the most important and rewarding aspect of translating your studies into real self-improvement. You should be clear about how you want the program to benefit you. This involves setting clear study objectives in relation to the content of the course in terms of understanding, concepts, completing research or reviewing activities and relating the content of the modules to your own situation. Your objectives may understandably change as you work through the program, in which case you should enter the revised objectives on your study plan so that you have a permanent reminder of what you are trying to achieve, when and why.

Distance-learning check-list

Prepare your study environment, your study tools and rules.
Undertake detailed self-assessment in terms of your ability as a learner.
Create a format for your study plan.
Consider your study objectives and tasks.
Create a study forecast.
Assess your study performance.
Re-evaluate your study forecast.
Be consistent when managing your study plan.
Use your Appleton Greene Certified Learning Provider (CLP) for tutorial support.
Make sure you keep in touch with those around you.

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Tutorial Support

Programs

Appleton Greene uses standard and bespoke corporate training programs as vessels to transfer business process improvement knowledge into the heart of our clients’ organizations. Each individual program focuses upon the implementation of a specific business process, which enables clients to easily quantify their return on investment. There are hundreds of established Appleton Greene corporate training products now available to clients within customer services, e-business, finance, globalization, human resources, information technology, legal, management, marketing and production. It does not matter whether a client’s employees are located within one office, or an unlimited number of international offices, we can still bring them together to learn and implement specific business processes collectively. Our approach to global localization enables us to provide clients with a truly international service with that all important personal touch. Appleton Greene corporate training programs can be provided virtually or locally and they are all unique in that they individually focus upon a specific business function. They are implemented over a sustainable period of time and professional support is consistently provided by qualified learning providers and specialist consultants.

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Support available

You will have a designated Certified Learning Provider (CLP) and an Accredited Consultant and we encourage you to communicate with them as much as possible. In all cases tutorial support is provided online because we can then keep a record of all communications to ensure that tutorial support remains consistent. You would also be forwarding your work to the tutorial support unit for evaluation and assessment. You will receive individual feedback on all of the work that you undertake on a one-to-one basis, together with specific recommendations for anything that may need to be changed in order to achieve a pass with merit or a pass with distinction and you then have as many opportunities as you may need to re-submit project studies until they meet with the required standard. Consequently the only reason that you should really fail (CLP) is if you do not do the work. It makes no difference to us whether a student takes 12 months or 18 months to complete the program, what matters is that in all cases the same quality standard will have been achieved.

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Support Process

Please forward all of your future emails to the designated (CLP) Tutorial Support Unit email address that has been provided and please do not duplicate or copy your emails to other AGC email accounts as this will just cause unnecessary administration. Please note that emails are always answered as quickly as possible but you will need to allow a period of up to 20 business days for responses to general tutorial support emails during busy periods, because emails are answered strictly within the order in which they are received. You will also need to allow a period of up to 30 business days for the evaluation and assessment of project studies. This does not include weekends or public holidays. Please therefore kindly allow for this within your time planning. All communications are managed online via email because it enables tutorial service support managers to review other communications which have been received before responding and it ensures that there is a copy of all communications retained on file for future reference. All communications will be stored within your personal (CLP) study file here at Appleton Greene throughout your designated study period. If you need any assistance or clarification at any time, please do not hesitate to contact us by forwarding an email and remember that we are here to help. If you have any questions, please list and number your questions succinctly and you can then be sure of receiving specific answers to each and every query.

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Time Management

It takes approximately 1 Year to complete the Business Transitions corporate training program, incorporating 12 x 6-hour monthly workshops. Each student will also need to contribute approximately 4 hours per week over 1 Year of their personal time. Students can study from home or work at their own pace and are responsible for managing their own study plan. There are no formal examinations and students are evaluated and assessed based upon their project study submissions, together with the quality of their internal analysis and supporting documents. They can contribute more time towards study when they have the time to do so and can contribute less time when they are busy. All students tend to be in full time employment while studying and the Business Transitions program is purposely designed to accommodate this, so there is plenty of flexibility in terms of time management. It makes no difference to us at Appleton Greene, whether individuals take 12-18 months to complete this program. What matters is that in all cases the same standard of quality will have been achieved with the standard and bespoke programs that have been developed.

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Distance Learning Guide

The distance learning guide should be your first port of call when starting your training program. It will help you when you are planning how and when to study, how to create the right environment and how to establish the right frame of mind. If you can lay the foundations properly during the planning stage, then it will contribute to your enjoyment and productivity while training later. The guide helps to change your lifestyle in order to accommodate time for study and to cultivate good study habits. It helps you to chart your progress so that you can measure your performance and achieve your goals. It explains the tools that you will need for study and how to make them work. It also explains how to translate academic theory into practical reality. Spend some time now working through your distance learning guide and make sure that you have firm foundations in place so that you can make the most of your distance learning program. There is no requirement for you to attend training workshops or classes at Appleton Greene offices. The entire program is undertaken online, program course manuals and project studies are administered via the Appleton Greene web site and via email, so you are able to study at your own pace and in the comfort of your own home or office as long as you have a computer and access to the internet.

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How To Study

The how to study guide provides students with a clear understanding of the Appleton Greene facilitation via distance learning training methods and enables students to obtain a clear overview of the training program content. It enables students to understand the step-by-step training methods used by Appleton Greene and how course manuals are integrated with project studies. It explains the research and development that is required and the need to provide evidence and references to support your statements. It also enables students to understand precisely what will be required of them in order to achieve a pass with merit and a pass with distinction for individual project studies and provides useful guidance on how to be innovative and creative when developing your Unique Program Proposition (UPP).

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Tutorial Support

Tutorial support for the Appleton Greene Business Transitions corporate training program is provided online either through the Appleton Greene Client Support Portal (CSP), or via email. All tutorial support requests are facilitated by a designated Program Administration Manager (PAM). They are responsible for deciding which professor or tutor is the most appropriate option relating to the support required and then the tutorial support request is forwarded onto them. Once the professor or tutor has completed the tutorial support request and answered any questions that have been asked, this communication is then returned to the student via email by the designated Program Administration Manager (PAM). This enables all tutorial support, between students, professors and tutors, to be facilitated by the designated Program Administration Manager (PAM) efficiently and securely through the email account. You will therefore need to allow a period of up to 20 business days for responses to general support queries and up to 30 business days for the evaluation and assessment of project studies, because all tutorial support requests are answered strictly within the order in which they are received. This does not include weekends or public holidays. Consequently you need to put some thought into the management of your tutorial support procedure in order to ensure that your study plan is feasible and to obtain the maximum possible benefit from tutorial support during your period of study. Please retain copies of your tutorial support emails for future reference. Please ensure that ALL of your tutorial support emails are set out using the format as suggested within your guide to tutorial support. Your tutorial support emails need to be referenced clearly to the specific part of the course manual or project study which you are working on at any given time. You also need to list and number any questions that you would like to ask, up to a maximum of five questions within each tutorial support email. Remember the more specific you can be with your questions the more specific your answers will be too and this will help you to avoid any unnecessary misunderstanding, misinterpretation, or duplication. The guide to tutorial support is intended to help you to understand how and when to use support in order to ensure that you get the most out of your training program. Appleton Greene training programs are designed to enable you to do things for yourself. They provide you with a structure or a framework and we use tutorial support to facilitate students while they practically implement what they learn. In other words, we are enabling students to do things for themselves. The benefits of distance learning via facilitation are considerable and are much more sustainable in the long-term than traditional short-term knowledge sharing programs. Consequently you should learn how and when to use tutorial support so that you can maximize the benefits from your learning experience with Appleton Greene. This guide describes the purpose of each training function and how to use them and how to use tutorial support in relation to each aspect of the training program. It also provides useful tips and guidance with regard to best practice.

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Tutorial Support Tips

Students are often unsure about how and when to use tutorial support with Appleton Greene. This Tip List will help you to understand more about how to achieve the most from using tutorial support. Refer to it regularly to ensure that you are continuing to use the service properly. Tutorial support is critical to the success of your training experience, but it is important to understand when and how to use it in order to maximize the benefit that you receive. It is no coincidence that those students who succeed are those that learn how to be positive, proactive and productive when using tutorial support.

Be positive and friendly with your tutorial support emails

Remember that if you forward an email to the tutorial support unit, you are dealing with real people. “Do unto others as you would expect others to do unto you”. If you are positive, complimentary and generally friendly in your emails, you will generate a similar response in return. This will be more enjoyable, productive and rewarding for you in the long-term.

Think about the impression that you want to create

Every time that you communicate, you create an impression, which can be either positive or negative, so put some thought into the impression that you want to create. Remember that copies of all tutorial support emails are stored electronically and tutors will always refer to prior correspondence before responding to any current emails. Over a period of time, a general opinion will be arrived at in relation to your character, attitude and ability. Try to manage your own frustrations, mood swings and temperament professionally, without involving the tutorial support team. Demonstrating frustration or a lack of patience is a weakness and will be interpreted as such. The good thing about communicating in writing, is that you will have the time to consider your content carefully, you can review it and proof-read it before sending your email to Appleton Greene and this should help you to communicate more professionally, consistently and to avoid any unnecessary knee-jerk reactions to individual situations as and when they may arise. Please also remember that the CLP Tutorial Support Unit will not just be responsible for evaluating and assessing the quality of your work, they will also be responsible for providing recommendations to other learning providers and to client contacts within the Appleton Greene global client network, so do be in control of your own emotions and try to create a good impression.

Remember that quality is preferred to quantity

Please remember that when you send an email to the tutorial support team, you are not using Twitter or Text Messaging. Try not to forward an email every time that you have a thought. This will not prove to be productive either for you or for the tutorial support team. Take time to prepare your communications properly, as if you were writing a professional letter to a business colleague and make a list of queries that you are likely to have and then incorporate them within one email, say once every month, so that the tutorial support team can understand more about context, application and your methodology for study. Get yourself into a consistent routine with your tutorial support requests and use the tutorial support template provided with ALL of your emails. The (CLP) Tutorial Support Unit will not spoon-feed you with information. They need to be able to evaluate and assess your tutorial support requests carefully and professionally.

Be specific about your questions in order to receive specific answers

Try not to write essays by thinking as you are writing tutorial support emails. The tutorial support unit can be unclear about what in fact you are asking, or what you are looking to achieve. Be specific about asking questions that you want answers to. Number your questions. You will then receive specific answers to each and every question. This is the main purpose of tutorial support via email.

Keep a record of your tutorial support emails

It is important that you keep a record of all tutorial support emails that are forwarded to you. You can then refer to them when necessary and it avoids any unnecessary duplication, misunderstanding, or misinterpretation.

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Individual training workshops or telephone support

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Tutorial Support Email Format

You should use this tutorial support format if you need to request clarification or assistance while studying with your training program. Please note that ALL of your tutorial support request emails should use the same format. You should therefore set up a standard email template, which you can then use as and when you need to. Emails that are forwarded to Appleton Greene, which do not use the following format, may be rejected and returned to you by the (CLP) Program Administration Manager. A detailed response will then be forwarded to you via email usually within 20 business days of receipt for general support queries and 30 business days for the evaluation and assessment of project studies. This does not include weekends or public holidays. Your tutorial support request, together with the corresponding TSU reply, will then be saved and stored within your electronic TSU file at Appleton Greene for future reference.

Subject line of your email

Please insert: Appleton Greene (CLP) Tutorial Support Request: (Your Full Name) (Date), within the subject line of your email.

Main body of your email

Please insert:
1. Appleton Greene Certified Learning Provider (CLP) Tutorial Support Request
2. Your Full Name
3. Date of TS request
4. Preferred email address
5. Backup email address
6. Course manual page name or number (reference)
7. Project study page name or number (reference)

Subject of enquiry
Please insert a maximum of 50 words (please be succinct)
Briefly outline the subject matter of your inquiry, or what your questions relate to.

Question 1

Maximum of 50 words (please be succinct)

Maximum of 50 words (please be succinct)

Question 3

Maximum of 50 words (please be succinct)

Question 4

Maximum of 50 words (please be succinct)

Question 5

Maximum of 50 words (please be succinct)

Please note that a maximum of 5 questions is permitted with each individual tutorial support request email.

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Procedure

* List the questions that you want to ask first, then re-arrange them in order of priority. Make sure that you reference them, where necessary, to the course manuals or project studies.
* Make sure that you are specific about your questions and number them. Try to plan the content within your emails to make sure that it is relevant.
* Make sure that your tutorial support emails are set out correctly, using the Tutorial Support Email Format provided here.
* Save a copy of your email and incorporate the date sent after the subject title. Keep your tutorial support emails within the same file and in date order for easy reference.
* Allow up to 20 business days for a response to general tutorial support emails and up to 30 business days for the evaluation and assessment of project studies, because detailed individual responses will be made in all cases and tutorial support emails are answered strictly within the order in which they are received.
* Emails can and do get lost. So if you have not received a reply within the appropriate time, forward another copy or a reminder to the tutorial support unit to be sure that it has been received but do not forward reminders unless the appropriate time has elapsed.
* When you receive a reply, save it immediately featuring the date of receipt after the subject heading for easy reference. In most cases the tutorial support unit replies to your questions individually, so you will have a record of the questions that you asked as well as the answers offered. With project studies however, separate emails are usually forwarded by the tutorial support unit, so do keep a record of your own original emails as well.
* Remember to be positive and friendly in your emails. You are dealing with real people who will respond to the same things that you respond to.
* Try not to repeat questions that have already been asked in previous emails. If this happens the tutorial support unit will probably just refer you to the appropriate answers that have already been provided within previous emails.
* If you lose your tutorial support email records you can write to Appleton Greene to receive a copy of your tutorial support file, but a separate administration charge may be levied for this service.

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How To Study

Your Certified Learning Provider (CLP) and Accredited Consultant can help you to plan a task list for getting started so that you can be clear about your direction and your priorities in relation to your training program. It is also a good way to introduce yourself to the tutorial support team.

Planning your study environment

Your study conditions are of great importance and will have a direct effect on how much you enjoy your training program. Consider how much space you will have, whether it is comfortable and private and whether you are likely to be disturbed. The study tools and facilities at your disposal are also important to the success of your distance-learning experience. Your tutorial support unit can help with useful tips and guidance, regardless of your starting position. It is important to get this right before you start working on your training program.

Planning your program objectives

It is important that you have a clear list of study objectives, in order of priority, before you start working on your training program. Your tutorial support unit can offer assistance here to ensure that your study objectives have been afforded due consideration and priority.

Planning how and when to study

Distance-learners are freed from the necessity of attending regular classes, since they can study in their own way, at their own pace and for their own purposes. This approach is designed to let you study efficiently away from the traditional classroom environment. It is important however, that you plan how and when to study, so that you are making the most of your natural attributes, strengths and opportunities. Your tutorial support unit can offer assistance and useful tips to ensure that you are playing to your strengths.

Planning your study tasks

You should have a clear understanding of the study tasks that you should be undertaking and the priority associated with each task. These tasks should also be integrated with your program objectives. The distance learning guide and the guide to tutorial support for students should help you here, but if you need any clarification or assistance, please contact your tutorial support unit.

Planning your time

You will need to allocate specific times during your calendar when you intend to study if you are to have a realistic chance of completing your program on time. You are responsible for planning and managing your own study time, so it is important that you are successful with this. Your tutorial support unit can help you with this if your time plan is not working.

Keeping in touch

Consistency is the key here. If you communicate too frequently in short bursts, or too infrequently with no pattern, then your management ability with your studies will be questioned, both by you and by your tutorial support unit. It is obvious when a student is in control and when one is not and this will depend how able you are at sticking with your study plan. Inconsistency invariably leads to in-completion.

Charting your progress

Your tutorial support team can help you to chart your own study progress. Refer to your distance learning guide for further details.

Making it work

To succeed, all that you will need to do is apply yourself to undertaking your training program and interpreting it correctly. Success or failure lies in your hands and your hands alone, so be sure that you have a strategy for making it work. Your Certified Learning Provider (CLP) and Accredited Consultant can guide you through the process of program planning, development and implementation.

Reading methods

Interpretation is often unique to the individual but it can be improved and even quantified by implementing consistent interpretation methods. Interpretation can be affected by outside interference such as family members, TV, or the Internet, or simply by other thoughts which are demanding priority in our minds. One thing that can improve our productivity is using recognized reading methods. This helps us to focus and to be more structured when reading information for reasons of importance, rather than relaxation.

Speed reading

When reading through course manuals for the first time, subconsciously set your reading speed to be just fast enough that you cannot dwell on individual words or tables. With practice, you should be able to read an A4 sheet of paper in one minute. You will not achieve much in the way of a detailed understanding, but your brain will retain a useful overview. This overview will be important later on and will enable you to keep individual issues in perspective with a more generic picture because speed reading appeals to the memory part of the brain. Do not worry about what you do or do not remember at this stage.

Content reading

Once you have speed read everything, you can then start work in earnest. You now need to read a particular section of your course manual thoroughly, by making detailed notes while you read. This process is called Content Reading and it will help to consolidate your understanding and interpretation of the information that has been provided.

Making structured notes on the course manuals

When you are content reading, you should be making detailed notes, which are both structured and informative. Make these notes in a MS Word document on your computer, because you can then amend and update these as and when you deem it to be necessary. List your notes under three headings: 1. Interpretation – 2. Questions – 3. Tasks. The purpose of the 1st section is to clarify your interpretation by writing it down. The purpose of the 2nd section is to list any questions that the issue raises for you. The purpose of the 3rd section is to list any tasks that you should undertake as a result. Anyone who has graduated with a business-related degree should already be familiar with this process.

Organizing structured notes separately

You should then transfer your notes to a separate study notebook, preferably one that enables easy referencing, such as a MS Word Document, a MS Excel Spreadsheet, a MS Access Database, or a personal organizer on your cell phone. Transferring your notes allows you to have the opportunity of cross-checking and verifying them, which assists considerably with understanding and interpretation. You will also find that the better you are at doing this, the more chance you will have of ensuring that you achieve your study objectives.

Question your understanding

Do challenge your understanding. Explain things to yourself in your own words by writing things down.

Clarifying your understanding

If you are at all unsure, forward an email to your tutorial support unit and they will help to clarify your understanding.

Question your interpretation

Do challenge your interpretation. Qualify your interpretation by writing it down.

Clarifying your interpretation

If you are at all unsure, forward an email to your tutorial support unit and they will help to clarify your interpretation.

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Qualification Requirements

The student will need to successfully complete the project study and all of the exercises relating to the Business Transitions corporate training program, achieving a pass with merit or distinction in each case, in order to qualify as an Accredited Business Transitions Specialist (ABTS). All monthly workshops need to be tried and tested within your company. These project studies can be completed in your own time and at your own pace and in the comfort of your own home or office. There are no formal examinations, assessment is based upon the successful completion of the project studies. They are called project studies because, unlike case studies, these projects are not theoretical, they incorporate real program processes that need to be properly researched and developed. The project studies assist us in measuring your understanding and interpretation of the training program and enable us to assess qualification merits. All of the project studies are based entirely upon the content within the training program and they enable you to integrate what you have learnt into your corporate training practice.

Business Transitions – Grading Contribution

Project Study – Grading Contribution

Customer Service – 10%
E-business – 05%
Finance – 10%
Globalization – 10%
Human Resources – 10%
Information Technology – 10%
Legal – 05%
Management – 10%
Marketing – 10%
Production – 10%
Education – 05%
Logistics – 05%
TOTAL GRADING – 100%

Qualification grades

A mark of 90% = Pass with Distinction.
A mark of 75% = Pass with Merit.
A mark of less than 75% = Fail.
If you fail to achieve a mark of 75% with a project study, you will receive detailed feedback from the Certified Learning Provider (CLP) and/or Accredited Consultant, together with a list of tasks which you will need to complete, in order to ensure that your project study meets with the minimum quality standard that is required by Appleton Greene. You can then re-submit your project study for further evaluation and assessment. Indeed you can re-submit as many drafts of your project studies as you need to, until such a time as they eventually meet with the required standard by Appleton Greene, so you need not worry about this, it is all part of the learning process.

When marking project studies, Appleton Greene is looking for sufficient evidence of the following:

Pass with merit

A satisfactory level of program understanding
A satisfactory level of program interpretation
A satisfactory level of project study content presentation
A satisfactory level of Unique Program Proposition (UPP) quality
A satisfactory level of the practical integration of academic theory

Pass with distinction

An exceptional level of program understanding
An exceptional level of program interpretation
An exceptional level of project study content presentation
An exceptional level of Unique Program Proposition (UPP) quality
An exceptional level of the practical integration of academic theory

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Preliminary Analysis

Preliminary Analysis for Business Evaluation Coursework

It is easy for entrepreneurs and managers to get overwhelmed by the day to day operations of their business and focus only on the current operations, without worrying about what the future holds. Once a business is up and running, it can pay dividends for entrepreneurs to think about strategic plans for the long-term. The importance of evaluation and progress becomes even more important as you take in more staff, appoint managers, create departments within the organization and become distanced from the usual everyday running of your business.

Reviewing your business’s progress can be particularly helpful if you feel uncertain about just how your business is performing and aren’t sure about what to do. This uncertainty can more often than not land businesses in hot waters.

Evaluating progress can also come in handy if you have decided to take your business to the next level as far as output and operational efficiency are concerned. Setting objectives is important here and will be our priority in this preliminary analysis.

A business can never succeed in a competitive market, without knowing what it wants. Most entrepreneurs and managers today fail at setting objectives for your business. Sure, they start well with a solid business idea and plan of implementation, but without a clear idea of where you’re headed or what your objectives are, businesses can stall before they even get running.

Regardless of the industry a business is in, business objectives and goals are necessary to find success. Objective setting and planning is one thing that remains constant or increases in importance with the passage of time. You can’t let go of the process or your objectives as you grow over time. In fact, these objectives become even more important as your business grows because there is more room for you to fail.

Business objectives are classified in the following categories:

Economic Objectives

Economic objectives refer to the objective of profit generation and increasing revenue with time. All other objectives which are tied down to the generation of profit are also covered under economic objectives.

The objectives businesses set as part of their economic growth include:

Profit Generation

Profit is the lifeblood of all businesses today. No business can survive in a competitive market without a free flowing stream of profit. In fact, most business entities today operate with the primary objective of profit generation – this is why they were brought into existence in the first place. Profit is earned to ensure the survival of businesses in a tough economy and to ensure positive expansion and growth over time.

Profits help businesses not only establish a positive income stream, but also expand their business and give stakeholders the returns they require. Businesses set other objectives as well that come under economic objectives in order to increase their profits.

Creation of Customers

Creation of new customers is another strategic economic objective that businesses have in mind today. A business unit cannot survive today unless they have new customers to buy their products and services. A business unit can only generate revenue and earn profits when it provides quality goods and services at prices that are reasonable. This can only be done through marketing efforts that attract new customers and sell more to the existing ones as well. Product quality, customer service quality and marketing activities play an important role in this objective.

Constant Innovations

Innovations are improvements that update the service or product standard offered to customers. Innovations can even be related to the production process or to the distribution of goods to customers. The ultimate aim of an innovation should be to reduce wastage and reduce costs for better results. Business units can work on innovation to reduce costs and adopt better production methods for better results. Businesses are eventually able to increase their sales and revenue by attracting a lot more customers than usual.

Regular innovations and efficiency optimization can help achieve a number of objectives for businesses today. Reduction in cost, achieved through innovations, can help increase profit for the business. There are numerous cases of innovations in the business world today, which were achieved through the drive to optimize productivity and become more efficient.

Optimized Use of Resources

A business can only be run when managers have sufficient funds or capital. The amount of capital invested in the business can be used to procure machinery, employ labor, buy raw materials and generate cash to meet the daily operating expenses. Thus, business activities are a result of numerous resources like materials, machines, money and labor.

The availability of these resources, however, is usually limited. Thus, every entrepreneur should learn how to take calculated risks directed toward the best possible use of these resources.

Social Objectives

Social objectives are all objectives meant to be achieved for the benefit of society in general. Businesses operate with multiple objectives, and need to keep an eye out on the communities around them. Since businesses utilize the scarce resources of society to operate, the community at large expects returns from them. Besides cutting out activities that damage the environment or trouble the society, businesses should keep society welfare and benefit in mind.

If the activities conducted by the business lead to harmful effects, there will be public reaction. Social objectives cut down on harmful practices and allow businesses to operate efficiently without a negative footprint.

Supply of Quality Goods

Since businesses utilize a number of scarce resources from society, society expects to get quality services and goods in return from the business. Hence, one objective for the business should be to not only produce efficient goods, but to also supply them to the right people at the right time at the right prices. It doesn’t look right on a business to supply faulty or adulterated goods, which can cause harm to customers consuming them.

Adopting Fair Trade Practices

In almost every country and society, activities such as over-charging, hoarding and black-marketing are considered undesirable by the public. Misleading advertisements also give a negative impression about a product’s quality. Such advertisements tend to deceive customers and are frowned upon by communities.

Contribution to General Welfare

Business entities should work for the welfare of society. This can be made possible through the provision and funding of schools and colleges that offer better education to people from less privileged classes. These training and vocational centers can help people earn their livelihood and improve the standard of living across communities. Furthermore, businesses can also provide a number of recreational facilities to the general public like sports complexes, parks etc.

Human Objectives

Human objectives relate to the objectives in place for the well-being and satisfaction of employees in the workplace as well as people in the community who are handicapped, disabled, deprived of training or proper education. Human objectives hence include the economic well-being and satisfaction of all employees and the development of human resources.

Economic Well-being of Employees

Employees in an organization should be paid fairly and in time for the services they provide. They should also be provided a solid remuneration and incentive plan to help develop their economic status. Incentives that should be offered include provident funds, pensions, medical facilities and housing facilities where need be. Facilities like this help uplift employee morale and improve their contribution to work.

Psychological Satisfaction of Employees

A business should set objectives to fully satisfy their employees. This can be made possible by improving interest in the job and adding the right person to the right job. Monotony in the workplace is one thing that can kill the satisfaction that employees derive from work, which is why tactics like job rotation should be implemented.

National Objectives

Businesses today are an important part of every country’s economy. Keeping their budding stature in mind, businesses have to fulfill the national goals and aspirations that rest on their shoulders.

Goals of a country could be to provide employment opportunities to all citizens, to earn revenue for the exchequer, to promote standards of social justice and to become self-sufficient in the production of goods and services across the country.

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Creation of Employment

One of the most important national objectives for organizations is to create employment opportunities for the employable people of a country. This can be achieved by widening distribution channels, by expanding markets and by establishing new business units. The ultimate objective should be to improve the business and ensure that there are opportunities for people to work at different positions in the organization.

Promotion of Social Justice

As responsible citizens, businesspeople are expected to provide equal opportunities to all people they deal with. All employees in the business should be given true standards of justice and should be allowed to express themselves in the best manner possible.

Global Objectives

Today, because of globalization, the whole world has become a big economy or market. Goods produced in one market are readily available to sell in other countries. So, every business has certain objectives in mind when it comes to facing competition in the global market. These global objectives include:

Rising Standards of Living

The growth of business activities across national borders can help ensure the availability of quality goods at reasonable prices all over the globe. People from one country can gain access to a number of goods in other markets that other countries are using. This significantly influences the standard of living in countries across the globe, due to access to quality goods.

Reducing Disparities between Nations

Businesses should work to reduce the disparities and social cases of inequality between the rich and poor nations of the world by expanding their operations and ensuring that the products and services they offer are the same across the globe. Through capital investments in developing and underdeveloped countries, businesses can signal a growth in their industrial and economic markets.

Making Globally Competitive Goods and Services

Businesses can set objectives to produce goods and services that are competitive in the global market as well. Such goods signal huge demand in global markets and can also help earn more foreign exchange for the nation.

How to Set Actionable Business Goals and Objectives

Many business owners have trouble hitting the bull’s eye with their business targets and performance. There are times when a business knows exactly what they want – a bigger business structure, more leads, added revenue to your income stream, higher profits, better employee morale –but still fails to meet the objectives that are in mind.

Entrepreneurs looking to take their business to the next level have to start their plans by setting the right goals. While creating these right goals can be a challenge, the process can make or break your future progress.

Obviously, businesses and entrepreneurs are required to invest a lot of hard work and money into their businesses to help them succeed. But they also require direction to help guide them. Business objectives act as the perfect starting point, as they define a pathway that businesses and the managers setting sail can follow.

Some of the tips you can follow for effortless objectives are:

Be Clear on What You Want to Prioritize

One of the biggest challenges for startups today is that everything needs to be done at the same time. Entrepreneurs are responsible for guiding this change and progress forward. They need to find new clients, manage finances, keep existing clients happy, motivate current employees and streamline the processes on their list. All of this has been to be done at the same time.

The conundrums faced across these departments can often confuse entrepreneurs as to which department deserves their full attention. In order to set the big company goal for the year, businesses should be able to tell what their top priorities are. Priorities determine just what the business should focus on.

A SWOT analysis is the perfect way to begin this process and to be crystal clear on what should be addressed first and the glaring errors that should be removed. We look at the SWOT analysis in even greater detail later in this course manual. The analysis studies the strengths, weaknesses, opportunities and threats of an organization.

The SWOT analysis is the perfect way for organizations to recognize the problems they should address first. The analysis does a perfect job at assessing your strengths, opportunities, weaknesses and threats. The SWOT analysis can also give organizations an idea of what they should prioritize and the goals they should set for their brand. An understanding of the current strengths and weaknesses with future threats and opportunities can help businesses evaluate their current standing and also set their objectives in a detailed manner.

Review Objectives with Team

Every successful entrepreneur and business owner realizes that the people who work for them are their most valuable asset. Your business objectives and goals should hence be run through them so that you have their nod of approval.

Your team is working on new products and talking to clients on a daily basis. They are possibly the ones who know the most about areas where the business can improve. They can also significantly pinpoint areas that need your attention, so that you can focus on them and significantly improve output. Once you have compiled your SWOT analysis and selected the top goals for your business, you should sit down with all employees and get their feedback on the subject matter. Since they’re on the field most of the days, their useful insights can help you improve your output as well.

Also, as Dale Carnegie pointed out, “People support a world they help create.” Keeping this in mind, you should also give your employees the chance to be a part of what you’re creating in the workplace.

Make Goals SMART

The SMART acronym is expansively used by people in the business world today. Once you have decided how to coin your business objectives and the importance of including employees in the decision making process, it is time that you create objectives that meet the SMART acronym:

• Specific: What exactly are you going to do with this objective?

• Measurable: How will you recognize that you’re succeeding?

• Achievable: How do you plan to implement the goal?

• Relevant: Does the goal you have in mind connect to your overall objectives?

• Timely: When can you realistically achieve the goal?

The SMART acronym is a clever way for organizations to grow their business and to follow a clear strategy while at it.

Set KPIs

Now that you have built your goals and worked with your team to convert them into SMART goals, it is time that you sit down and come up with ways to measure your goals and to set timelines to achieve it. You definitely cannot manage what you cannot measure, which is why it is necessary that you measure the progress you make and take it forward from there.

The most common way of measuring your success toward objectives is through KPIs. Key performance indicators are numbers that you track to identify the progress made toward achieving an objective. For instance, if your objective is to experience growth with time, then the number of new customers coming into your business would be a good KPI to measure progress and to identifying just how much more you need to do. You can also set different KPIs for the business as a whole, based on what works or doesn’t.

This is something we look at in greater detail within the next chapter.

Build Good Business Practices

Just like you would build good individual habits while achieving and fulfilling personal goals, you should live by the same principles while achieving your business objectives. The actions that achieve the KPIs you selected above can be honed through decent business practices.

Automate the process as much as you can and start by making a calendar for both, you and your staff. You can also add reminders on the calendar to help you keep tabs on just what you need to do. Also, you need to regularly analyze and review your progress, and resolve whatever issues you feel are restricting your move forward. Review if you have highlighted the right KPIs and what could be done to improve them even further. Measuring progress is necessary to meet objectives, and we explore the concepts in our coursework.

Objectives can be tracked and measured through different metrics, which are important for business evaluation and analysis. What’s the best way to measure your business’s performance? Well, there are multiple correct approaches and metrics for the job. Running a business requires thorough understanding of the sales and financial results your business is able to achieve and an in-depth look at what can be done to better them.

This process of improvement cannot be implemented without the incorporation of relevant metrics that help in the tracking process. Your metrics should make tracking easier for you, and ensure that you are able to not only monitor, but also work on your performance.

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Metrics That Every Organization Should Track

We now explore a number of business metrics that are popularly used by businesses to explore company performance and to track your output.

Sales Revenue

Sales Revenue is an important performance metric and is by far the one you should always have your eyes on. We choose to have this metric mentioned right at the top, because it tells a lot about your company and the progress you’ve made or are capable of making.

Your sales results from specific business periods give you insights into just how interested customers are in buying your products or services. These results can help tell you whether your marketing efforts are paying off and whether you are still in the running against your competition, with much more.

When evaluating their sales revenue, it is necessary that organizations remember that sales output or revenue in general is impacted by multiple factors. The person tracking this metric should be aware of all recent changes in the market and the cyclical buying behavior shown by employees along with competitive actions and marketing campaigns run by you.

Sales revenue is measured by summing your income from all client purchases, minus the cost of returned or faulty goods. The most obvious way for businesses to improve their sales revenue is by marketing more. Hire new salespeople and market discounts that are hard to resist for your target market. Focus on a long-term strategy for sales than on a quick and temporary fix.

Net Profit Margin

The net profit margin basically helps indicate just how efficient your company is currently at generating profits in comparison to the revenue generated.

Most business owners evaluate their performance based on the revenue figure alone, without computing for net profit. Even when they do consider net profit, they look at both these figures in their individuality, without contemplating the impact they can have with regards to one another.

Basically, the net profit margin gives you an idea of the percentage of your total revenue that translates into profits. Many startups do have encouraging revenue figures, but are unable to translate the income into profits, due to their free flowing expenses. Expenses need to be contained, and the best idea to find out more about them is through the net profit margin.

The net profit margin can be calculated by summing up your monthly total revenue and reducing all sales expenses from the total figure you get. You can also calculate your net profit margin by finding the percentage of your net profit against sales. For instance, if a business records a net profit of $40,000 against revenue of $100,000, the net profit margin would be recorded at 40 percent. The net profit margin also gives businesses an indication of their operating expenses and whether they should work on minimizing them.

The best way to improve your net profit margin is by working on your revenue and limiting unnecessary expenses. You should run a cost audit to determine all sales and production costs that don’t add value to your business. These costs should be minimized, since they reduce profit and eat up your sales revenue. However, focus should always be on product quality to ensure you don’t go for a cookie cutter approach over innovation and design quality in production.

Gross Profit Margin

The gross profit margin further simplifies this process and makes it easier to understand. The higher your gross profit margin, the more your company earns on each sales dollar. Where net profit is computed by subtracting all related operational expenses and overheads from your total revenue, the gross profit is calculated by only subtracting the cost of goods sold from your sales.

The cost of goods sold is the direct manufacturing or merchandising cost of all goods that you sell to retailers or end customers. This figure will help you understand the direct efficiency of your sales and whether you need to increase prices or cut down on merchandising costs.

The gross profit margin is computed in a similar manner to that of the net profit margin, with the only difference being in the values of the profit considered. Taking the example we mentioned above forward, let’s say the manufacturer has a gross profit of $60,000 against the $100,000 of sales. The gross profit would be calculated by dividing it by the total sales revenue and multiplying by 100 if you want the answer in percentage. Your gross profit margin can be improved by adding efficiency to your production and sale processes. The more efficient you are in these two processes, the more profitable your business will be.

Sales Growth Year-to-Date

All business owners and managers today would love to be able to track their company’s growth on a month-to-month basis. Since sales are entirely dependent on the mood and buying behavior of customers, the sales growth year-to-date metric can help identify the pace at which a business is growing.

The metric will help identify the speed at which the business is increasing or decreasing revenue. Businesses should make it a goal to accelerate their sales growth every month, or should try to keep it at the same rate during cyclical demand periods across seasons of high and low demand.

Monitoring growth in revenue generating across periodic time intervals can help give you a better understanding of where your company currently stands. The metric will help identify the pace at which you should develop your business.

This can be measured by evaluating your sales revenue and the number of new customers or deals you have made in a period. If your sales team is distributed across multiple departments, you can track this metric across every team. This will help you get a better understanding of how efficiently different sales departments and teams are performing in your organization.

Similar to other profitability metrics, you can improve how you perform on this metric by working on your marketing and sales activities. Sales growth can also be boosted through marketing efforts that help give you the coverage you need across different platforms.

Cost of Customer Acquisition

There are a number of things that contribute to the cost of acquiring a new customer. The cost of customer acquisition, or CAC as it is called, is calculated by dividing all the costs you have spent on acquiring a new customer during a given period with the number of new clients you have acquired in a period.

For instance, if you acquire 40 new customers in the period of one month and spend $8000 on marketing for the same period, your CAC will come up at $200 per customer acquired. Customers matter to businesses and new customers bring new revenue generation opportunities. When a customer is acquired, the next step in the process is to build loyalty and improve service performance.

The cost of customer acquisition can be improved by working on product or service quality and ensuring positive reviews and word of mouth marketing from current customers. This will help market your product or service naturally and will further help bring in new customers without spending lavishly on marketing processes. Also, referrals and recommendation processes can be implemented here.

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Customer Loyalty and Retention

Having loyal customers can prove to be beneficial in a number of ways. All major businesses today have succeeded on the basis of their customer loyalty and the trust they have shown in them. The trust put by your customers in your performance can eventually help you grow your sales and can also help spread positive word of mouth related to your business.

Customer loyalty and retention is measured through a metric or KPI known as retention rate. This KPI gives businesses an idea of the number of customers that use their products and the extended time period they use it for.

The retention rate can be calculated through the following formula:

Retention Rate = ((CE-CN)/CS)) X 100

CE = number of customers at the end of a certain time period (1 year, for example)

CN = number of new customers acquired during the same time period

CS = number of clients at the start of the time period

The results you get through this formula will help determine the number of customers that are loyal to you. The customer loyalty or retention ratio can be significantly improved through excellent customer care services and by delivering the highest quality of services to your customers. Consistent quality complemented with good customer service can help give your customers the motivation they require to stick with you.

Net Promoter Content

The net promoter content is a metric that deals entirely with the quality of the product or service and the level of customer satisfaction given to employees. The metric shows just how many people are likely to recommend your services or products to their friends and family.

As per the different tiers of Net Promoter Network, there are three different levels of customer advocacy for brands.

These tiers include:

1. The first tier includes all loyal enthusiasts and promoters that praise your company in front of others and play a major role in driving your new sales forward. These promoters are responsible for a bulk of the new sales opportunities and orders you receive.

2. The second tier includes passive customers who are satisfied with the services you offer but are often unenthusiastic about promoting them to others or even maintaining their loyalty for long. These are customers who will leave you as soon as they get a better offer or option somewhere else.

3. The third or last tier consists of detractors. Detractors are all customers who damage your brand’s reputation and spread negative information about your company. Detractors can inflict a lot of damage on your firm’s reputation.

This metric is related to marketing and can be measured on a ten-point scale by conducting interviews and customer surveys. All customers with a rating of 8 or more can be considered promoters. Those coming in between 5 to 7 can be considered passive and those below 5 can be considered detractors. The data or substance for this ranking system is gathered through emails or customer surveys. The evaluation and data structuring process will take some time, but it will eventually give you enough leverage to rank your customers in a manner that you want. The net promoter score can eventually be found out by subtracting the percentage of detractors from the total percentage of promoters.

Your customer loyalty and net promoter score can be improved by enhancing your customer services and by delivering the quality standard that your customers expect from your brand.

Qualified Leads per Month

As your company grows by leaps and bounds, you will be able to invest more in sales and marketing. Soon, you will open up hundreds of avenues that lead to new sales opportunities and growth potential every month. But not all the leads that you conjure up have the potential to become customers for you in the near future.

This is exactly why businesses and managers should be tracking the number of qualified leads they rope in every month. The business metrics you show here will eventually influence the qualified leads you develop in the future.

All of your new leads can be categorized on the basis of three distinct groups:

• Marketing qualified leads: MQL comprises of all leads that are qualified by the marketing team on the premises of your workplace. These leads match your potential requirements set on the basis of your company size and the expectations you have from the organization.

• Sales-accepted leads: Sales accepted leads or SAL are all leads that the marketing team forwards to the sales team. The sales team takes up these leads to begin work on them based on their own schedule.

• Sales qualified leads: These are leads that are considered qualified by the sales team. These leads have the highest potential of becoming customers in the future, since they are considered qualified and final by the sales team within an organization.

Lead generation measures can improve if the organization decides to build a niche market instead of targeting thousands and millions of people. This niche audience will be interested in the products and will help improve your lead generation and qualification measures.

Monthly Digital Traffic

With the growing focus on digital marketing, it is necessary that businesses add their monthly website traffic to the mix as well. Digital is the way forward currently, as it educates people about what you’re offering and can also help them get a better understanding of your products and services.

The more people hear about your product and services, the more likely they are to use them. Marketing KPIs for digital marketing can be divided between the following heads:

Marketing KPIs can be divided into five main categories:

• Lead generation
• Website & traffic metrics
• SEO optimization
• Paid advertising
• Social media tracking

The way to go about this process is to start by using a free marketing tool such as Google Analytics. A tool like Google Analytics will help you track the monthly traffic on your website and will also help you discover the behavioral instincts of people who use your website and what they use it for.

The easiest way to improve your digital KPIs is to work on your advertising budget. An increase in the budget, along with the right employees and tactics, can definitely take your digital marketing results forward.

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Course Manuals 1-12

Chapter 1: The Changing Business Environment Today

There are two eternal truths that business leaders should identify as early as they can in their entrepreneurial journey; life is all about change and development, and being a business leader is a super challenging role tasked with mastering these waves of change and achieving your objectives despite the trends.

As the business environment around us changes, so do the challenges facing organizations and their business managers. As both, individuals and members of the managerial team, managers have to prepare themselves for the rapidly changing business environment and adjust to the role in the best manner possible.

This manual delves deeper into the concept of business evaluation, and further studies the current change in business environments across the globe. We start by introducing you to the change itself, and how you as managers, entrepreneurs and employees can cope with these changes.

Not too long ago, senior executives in larger organizations had a simple goal set for the growth of an organization – stability. Shareholders did meddle in internal affairs, but they were ultimately concerned only with predictable earnings growth. A predictable and accurate earning potential/dividend would get shareholders off their back and give managers the peace of mind they require.

Since so many markets were underdeveloped, leaders could work on annual exercises to deliver on expectations. The strategic plan remained the same across the organization, with only a few modifications for small strategic teams. Prices remained in check, people were happy with their jobs and life was relatively good.

The recent shift toward labor mobility, market transparency, instantaneous communication, global capital flows and the ability to improve with time have blown the comfortable scenario of yesteryears to smithereens. Almost all companies today, from market giants to startups, their collective interest lies in something that was happily avoided and slightly ignored in the past: change.

Challenges of Change

The heightened focus on change presents most senior executives and managers with an unfamiliar challenge of sorts. Almost all organizations today devise their best tactical and strategic plans with an eye on change management. Change in the business environment was welcomed with jubilation, but that very change now presents challenges for businesses trying to cope.

All factors in an organization, from its values to company culture, people and behavior, need to be aligned for the right results. Plans and motives of change do not create the results intended from them. In fact, value is captured and realized through the collective and sustained actions of thousands of employees and the organization.

A long term structural transformation has 4 major characteristics:

5. Scale: The change should affect all or most of the organization as a whole.
6. Magnitude: The change should significantly alter the set status quo.
7. Duration: The change should preferably last for months, if not years.
8. Strategic Importanced be important in relation to the strategic objectives of the organization.

Many senior executives respect these characteristics, but also realize that real rewards of change can only be reaped if the change occurs at an individual level. Many CEOs and change managers are kept up at night at the thought of how people will react to change, especially since it is now a major part of the workforce. Managers also fret over what can be done to maintain the company’s unique values and original culture over this period of change. Change can have a number of positive attributes, but it can also debilitate progress and all the years of hard work if it isn’t monitored carefully.

Steps for Change Management

The changing business environment has only made senior executives realize the needs of their employees. When change was scarce, organizations wouldn’t worry about ingraining it within their culture and employees, but now that change lies at the very core of business culture, there is greater focus on how it can be managed and the results that can be derived through it.

Some steps organizations and managers can follow today to remain competitive in the changing business environment include:

Addressing the Human Side

Almost any significant transformation in the workplace can create people-issues and complications. New skills and capabilities have to be developed, new leaders will be asked to step up and fill in for responsibilities. Employees will remain skeptical of change in the meanwhile and will have their reservations as always.

Dealing with these issues in a reactive manner can put all morale, efficiency and speed at risk. The first and perhaps the most important attribute of change management should be to focus on the employees directly involved in the process. The change management process can only succeed if the focus remains on employees and what that change means to them. The change management approach should be integrated into the decision making process and should focus on employees as the first point of change.

Starting from the Top

Since change can be inherently unnerving and unsettling for people at all levels of an organization, the attention would definitely turn to the leadership team and CEO for support, strength and direction. Leaders themselves have to be onboard with the new approaches first and should be ready to take drastic measures for the growth of the organization. These drastic measures should be focused on challenging and motivating the organization. Executive teams should be the first to be introduced to the change and should be kept on board throughout the change.

Involving Every Layer in the Firm

As transformation programs progress forward, you should look to involve every layer within the organization. Change efforts should include plans to identify leaders across the organization and give them dedicated instructions on how to manage a change initiative. Since water trickles down, the implementation of the change initiative should start from the top and then trickle down to the bottom. The change eventually cascades through the organization and achieves the objectives required from it.

Creating Ownership within Workers

Leaders of real change management programs strive to create ownership among the workforce in favor of the change and what it can achieve for the organization. This can be created through a leadership team willing to accept responsibility for the change in all areas they can influence or control.

Ownership can be created and reinforced through the use of rewards or incentives. The incentives can either be tangible, in the form of financial compensation, or intangible, in the form of psychological camaraderie and a shared sense of destiny.

Assessing Culture

Almost all successful change management programs pick up intensity and speed as they come down to other lower levels of the hierarchy. This is only possible if the management has done their homework and assessed all attributes of the organization’s culture. Companies often assess culture too late and do not recognize the importance it carries. Through cultural diagnostics, organizations can prepare themselves for change, bring a number of major problems to the surface, define all factors that influence leadership sources and identify conflicts. These diagnostics help in the identification of core values, behaviors and perceptions across all levels of the organization.

Adapting to Change in a Changing Business Environment

As managers and employees in this changing era, the primary measures you can take to adapt to and be ready for change include:

• Becoming aware of your situation
• Understanding the true meaning of change and how it inspires you
• Building your skill- and knowledge set for the future

We explore these points in greater detail within this section.

Becoming Aware of Your Current Situation

A big part of change management for supervisors and managers is to become aware of their current situation. What is currently going on in your organization? If you don’t know, it is about time that you find out about it and take the steps necessary to inculcate change within the workplace.

Relevant ideas and questions to help you take the research process and pace forward include:

• What is the mission of your specific department, organization or unit? Supervisors and managers need to begin their analysis of the current situation by answering this question first. The very first thing to clarify is your department’s or unit’s mission. Concrete steps toward change can only be undertaken once the mission is clear.

• What is the purpose of your job? As supervisors and managers, we contribute to the organization in one way or another. The job has a specific purpose, which should be identified and understood here.

• What are your key assignments and responsibilities? Again, supervisors should take their understanding of the job’s purpose forward by studying the key responsibilities and assignments that come under their supervision. An understanding of these responsibilities can significantly enhance results.

• What does your supervisor expect from you? As employees, and even as managers, we mostly have supervisors and higher-ups keeping an eye on us. These supervisors expect a certain deal from all members.

• What obstacles stand in the way of change? Organizations and the employees within them should identify all obstacles in the way and come up with a clear strategy to remove these hurdles and build a clear path to success.

• What resources are present at your disposal? The basic economic problem of limited resources and unlimited wants still stands true today and should be mitigated before proper change management. Understand the resources you have and take the query of wants forward from there.

• What changes are coming? Finally, you should ask yourself the all-important question of what changes are coming your way? This answer helps you determine the management endeavor and adapt to change along with your team.

The inability to answer questions like these should be a warning for most department managers to do their homework. As managers and supervisors, you are in a very strategic position in the change management process. The inability to do your homework can significantly reduce the efficiency of change.

People in organizations often employ selective perception, specialization or certain habits to keep them from being exposed to ideas of change. While this can be considered basic human nature, it isn’t a good strategy to handle change. Instead, this is the time for supervisors and managers to look into their fears and broaden the information they have to explore a number of new ideas. By increasing their awareness of change, managers can practice a distinct advantage over others who have isolated themselves.

Understanding Change

Compare your reaction toward change to that of a small child’s reaction to thunder. You might ignore change as it comes your way, but a small child may feel anxious and can seek assurance from the adult sitting them. It is a basic human trait to fear the unknown, as confidence only comes from understanding the phenomenon and the intricacies behind it. From your learning and experiencesas an adult, you now realize that thunderis a natural event that does not harm you. The small child has no idea what thunder is and can only hear a loud, roaring sound that immediately scares them. Based on this analogy, an important step toward change is to realize and understand what is happening around you and why you’re a part of it.

Is your department in the process of being reorganized? Are you a bit worried about how that might impact you? These reactions are totally natural. But do not fall victim to speculations, inclinations or rumors that make you assume the worst. Wait for someone to explain the motive behind the reorganization, and the specific changes that will result from it.

Flexibility toward change can make organizations stand out in the industry today. Organizations that fail to deal with change are unable to compete with other strong members in the industry. Organizations can have internal debates on this matter, but as a rule of thumb, organizations should appreciate technology and competition, and also recognize that these two factors play an important role in business evaluation and reevaluation.

Building Skills

Adapting to change frequently requires an effective command over skills that matter in the industry today. In some cases, adapting to change will require you to learn a number of new skills that you do not yet have command over.

As employees and managers, we cannot stop learning and updating our skills.
Employees should take the responsibility to educate themselves and also to remain current and up to date with changing trends. This information will help update their skill sets and will also demonstrate an achievement and strive toward self-improvement.

Considerations to Stay Relevant in the Changing Business Environment

The faster you learn, the sooner you can adapt to changes and the more relevant you will remain in the industry. One of the biggest challenges that leaders face today is facilitating organizational adaptability. The business environment, as we have discussed above, is dynamically changing around us.

There are a number of new advancements and challenges that weren’t around until recently and have popped up of late.

Historically, western culture has focused on the concept of a heroic leader. The idea that a charismatic leader will swoop in as the knight in shining armor and save the business in distress has for long been the ideal characteristic that businesses and entrepreneurs have had to live up to. For instance, take a look at the cover of any business magazine and you will see pictures of the successful CEO and the achievements they have had, without a single word on the team that helped them achieve what they did.

As per recent business predictions, businesses that live by the same age-old methodology and don’t broaden their leadership practices will suffer at the hands of the changing business environment of today. Change will upgrade you onto a phase of relevance, be it from customers, competitors or even suppliers.

In this section we shed light on some of the considerations and practices businesses can follow to remain relevant in this changing business environment:

Updating Change Theory

Just like the business environment around us is constantly evolving, so too are the leadership and change theories enabling work. Unfortunately, many theories of change are focused on antiquated efforts that don’t hold true anymore. For instance, the trickledown effect does hold value, but the fact that one person at the top can impact almost every aspect of an organization’s style and environment is insane. Every hierarchy in the organization comes with different approaches, environments, cultures and behaviors. Due to the difference in these core processes, the behavior toward change and the acceptance of new technologies will be different across the board. Hence, leaders cannot just impact every level within the organization by cascading goals, directions and values.

Organizations need to take into consideration the emergence of sub-cultures across hierarchies and the different dynamics across different levels. Based on this information, viewing the entire organization as a stable entity with similar characteristics and viewing the leader as the messiah in a white robe is plain farfetched.

Shift from Drastic Change to a Culture of Adaptability

The primary assumption with the change process is that it is something that begins and then ends, once it has lived its finite life. A change effort, for instance, connotes a finite effort that is temporary and will not last long. Hence, organizations and employees really aren’t at fault to consider change a temporary effort which will pass when people start suffering change fatigue.

However, change isn’t something that ends, especially in the rapidly changing business environment of today. There is no single change per se, just varying levels of organizational adaptability toward different advancements.

Organizational adaptability can be defined as an organization’s ability to do something in a sustainable manner without interruptions. However, organizational adaptability requires a shift in perspective from top management, who should focus more on short-term management than on long-term management.

Distinguish Between Managers and Leadership

Many leadership training and development programs in the contemporary world focus a lot on individual skillsets such as delegation, building a strategic vision and coaching. While these leadership skills can be helpful for managers, they aren’t a true representation of leadership.

While leader development focuses primarily on the individual and their skills, leadership development focuses more on creating value through interaction in the workforce. Organizations looking to promote true leadership development should give opportunities to all leaders to apply their skillsets within their work. This includes producing real results through collaborative inquiry, action learning and appreciative feedback. The faster leaders learn, the faster they can adapt to different situations.

Clarify the Purpose of Leadership in Your Organization

With the growing surge in cross functional teams, the role of the leader in organizations is a lot more prominent. As the business environment changes at a rapid pace, leaders have to act as liaisons and integrators that enable the coordination of disparate functions across the organization. Based on leadership theories from prominent psychologists, we can list down three major types of leadership styles:

• Administrative Leadership: This leadership style is focused on coordinating and structuring organizational activities in a bureaucratic manner.

• Adaptive Leadership: Adaptive leadership is what is seen when a meeting that starts with opposing viewpoints and different arguments ends on a positive note of consensus.

• Enabling Leadership: Enabling leadership refers to the conditions leaders set to enable new behaviors, learning and innovation.

The purpose and type of leadership should shift based on the situation organizations find themselves in, and the steps that should be taken to counter that situation.

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Chapter 2: Understanding the Impact of External Economic Activity on Business Growth and Success

News articles, finance blogs and entrepreneurs all mention the economy as a major factor influencing business growth and success in the world today. To beginners and novice learners, the economy sounds like this all-encompassing, mysterious thing that has a large impact on businesses and the daily lives of individuals in a given geographical area or society. The question for all individuals without a relevant background remains, how does the economy actually affect the society around us? How does economic behavior change the way we behave in and live our lives? How does it change the way businesses operate and make growth plans? The economy changes from time to time, how does that dictate the innovation and flexibility that businesses today are required to show? These are all questions that we will look to answer through this chapter.

For people who are unaware of it, the economy is defined as, “the state of a country or region in terms of the production and consumption of goods and services and the supply of money.”

At a rudimentary level, the economy of a region or country can be defined as its ability to generate and produce money. Before we study the impact of economy on businesses, we will first take a look at how the economy dictates behavioral spending patterns among consumers in a society.

Economic Growth Affects Government Spending and Policymaking

First and foremost, the economy around us affects just how a government acts and behaves. Economic growth plays a necessary part in stimulating business growth and spending. Increased exports and imports usually lead to greater income for businesses through business taxation. In simpler terms, governments get to have an improved cash flow due to an increase in business performance and revenue generation abilities. Once the government generates higher taxation, it eventually leads to higher government spending. Essentially everyone benefits from the process, as organizations can then push the money they earn into different services such as healthcare and other public provisions.

On the flip side, an economic recession or periods of low business revenue generation can reduce government spending and revenue generation. Governments start austerity campaigns and cut down on public expenditures to remove deficits. As a result of this reduced government expenditure and revenue generation, government services and provisions can fall into disrepair and suffer a lot. From healthcare to public transport and road repair, areas that require government funding and spending can reach a stagnation point.

The standard of life reduces as a result and the government provisions in the region are neglected.

Public Infrastructure and Services Are affected

As we have briefly mentioned in the point above, the economy directly impacts services and public infrastructure. During an economic recession, spending on the general public is reduced by the government. The impact further trickles down as businesses and the general public do not have the buying or purchasing power that they previously had.

Public services and infrastructure are the first to bite, with austerity in the following measures:

• Transport
• Healthcare
• General Maintenance

As a result of government austerity measures, public transport such as trains, trams and buses can experience reduced services and productivity. Moreover, private as well as public businesses do not have enough to spend on renovations, maintenance and new capital products. Healthcare is the first to stagnate during an economic recession. Due to limited resources and a lack of funds, the public may have to wait for longer durations for basic medical treatments and extensive surgeries and operations.

Aside from just this, the general maintenance of existing public goods could decrease as well. This could eventually lead public facilities into disrepair with deteriorating roads. Economic growth can lead to a contrasting situation as it helps improve transport, maintenance and healthcare across the board to boost public satisfaction and other related factors.

Cost of Living Will Fluctuate

For the general public, the main impact of economic fluctuations is felt in the cost and standard of living. The economic conditions in a society have an almost direct impact on the spending ability of our masses. An economic recession can lead to an increase in the cost of living and a drop in the general standard of living. Businesses are also strong armed into increasing their prices as they have to factor in for the growing cost of different raw materials and labor charges.

During periods of recession, the general public expects businesses to reduce prices for improved sales, but the improved revenue wouldn’t be of much use if it comes at a loss. During a period of recession, businesses often have no other alternative than to just increase their prices to make up for the increase in basic costs and the shortfalls in sales and turnover. For instance, a producer of luxury goods, for instance luxury cars, will have to increase prices further because sales volume would definitely be down as compared to what it was previously. People often cut down on their expenditure toward luxury goods during a period of recession. As a result, sales volume for a luxury car manufacturer would be down, and they would have no other option but to make more from the few units they are selling.

The series of events mentioned above has a snowball effect and can make conditions invariably worse than what they are. The snowball effect created as a result of rising prices can lead to hyperinflation in the economy. Hyperinflation is an economic condition where the prices of simple goods reach ridiculous levels – for instance, perhaps an exaggerate one, $10,000 for a loaf of bread. A region’s currency is bound to suffer due to hyperinflation and falls down the dumps. The decrease in currency rates also contributes to the inflation of prices, as imports are now a lot more expensive in relation to the local currency.

During periods of economic growth and prosperity, the general cost and standard of living is either maintained where it is, or it slightly improves for the better. The cost of living remains the same because prices barely change, even during economic prosperity, but due to the growing success of businesses in the industry, businesses make better profits and are able to offer more to employees.

Wages increase for the better, and residents are able to afford a better standard of living.

The Value of Currency Fluctuates

We briefly mentioned the impact the economy can have on a region’s currency. As we have mentioned above, the currency of a region is directly impacted by the economic change in the region. A strong economy more often than not leads to a stronger currency. On the contrary, a weak economy leads to a weak currency. What this means is that the national currency of a country does not have the same buying power in the international market.

For instance, a recession in the United States will lead to a drop in value for the United States dollar. This eventually means that your USD will be able to buy a lot less than what it can right now, when trading with other international currencies. For businesses in the host country, the falling forex rates have a direct impact on profitability and import and export processes.

The general public will witness a steep rise in their international purchases, along with the money they have to pay while traveling.

Varying Quality of Life Standards

All of the impacts of changes in economic conditions that we have discussed above eventually go on to directly impact the quality of life in a region. Students for instance would have to work odd jobs to chip in with parents to manage finances. Times of economic recession can be hard on individuals and require everyone to up their game and step up where they can. The standard of living will drop as students have to focus on things other than just their school work and help their parents out in responsibilities that do not really fall under their expenses.

Moreover, the economy can also directly impact the disposable income of a family and the quality of life they enjoy. The quality of life most definitely declines during a recession, families do not have the resources to fund luxury purchases and other necessary equipment at times as well. Alternatively, periods of economic growth signal improvements in the quality of life. Life becomes a lot easier for families to afford luxuries that were previously unavailable to them, such as new electronics and holidays.

The Effect of Economic Change on Businesses

Sometimes organizations feel like the only guarantee about economic conditions is that they will change sooner or later. Businesses with sufficient experience behind their back went through the same phenomenon yet again as COVID-19 killed all economic activity and led to a recession of sorts. These economic ups and downs are part and parcel of running a business, and business owners can’t help but be aware of them and the complications they bring for them. Due to the constant presence and threat of economic downturns, businesses have to ensure that they are always working toward plans for better economic strength and ability.

In this section we study the impact economic conditions can have on business activity:

Focus on Profitability

Regardless of how the economy is doing, the primary focus of every organization today should be on making their business as profitable as they possibly can. As a general rule of thumb, seasons of high economic growth and stability are relatively easy for businesses to manage. This is because economic growth is the call of the hour, consumer confidence is high, unemployment rates are down and people have greater disposable incomes to spend on goods they like and believe they should have. All of this eventually leads to more people choosing to buy from different businesses. The more people have to spend, the more willing they will be to try different businesses in the market and benefit from the expertise they have to offer.

This situation can present a gloomy contrast when economic activities die down and the economy experiences a downturn. People are more inclined toward saving money during an economic downturn than they are toward spending it. Additionally, businesses also have to market hard to build a relative perception of their product in the eyes of customer. Businesses can feel the pressure during economic downturns, especially if they aren’t prepared to face the rising pressure.

Business entities that are focused on being profitable get to benefit the most during dry times of economic downturns. The objective of profitability does not only provide businesses with the peace of mind they require across seasons, but it also gives them the freedom and leverage to make hasty cuts in prices during recessions, make rash decisions based in the moment and innovate their product for different markets. Without the freedom to experiment with decisions, businesses will never be able to decide what’s best for them. This will eventually lead to a sphere of decreased sales, where businesses rely on past glory and profits to pull them through the phase.

Be Prepared for Opportunity

This does sound like the kind of content you might see on the marketing material for a business school, but the fact of the matter is that every single economic period brings with it an opportunity for businesses to diversify their opportunities and open new avenues.

During a period of growth, businesses are more at ease to take decisions they feel can be beneficial for them and are also willing to hire additional personnel, because there is no better time than now. Organizations that want to move into larger spaces also do so during periods of economic downturn, because the market is ideal for purchasing during such periods, and businesses have enough cash available to them to buy new plants and step into new markets.

Lean sessions of economic downturn can present a different kind of opportunity altogether. These opportunities are difficult to jump on, as most of the businesses in your industry might decrease their operations and reduce the money they spend on marketing.

As your competitors reduce the focus they put on the market, you can focus
intently on pivoting your efforts to focus more on new avenues such as digital marketing, entering a new market or crafting a new marketing strategy. These seasons also give you the time and freedom to experiment with new packages, pricing tiers and services that they haven’t embarked on previously.

The exciting part about opportunities unearthed during periods of economic downturn is that they pave the way for future growth in this regard.

External Factors Affecting Business Environment

There are a number of external factors today that impact business environment and the success/growth curve of organizations around us. While we have discussed the economy in general and the impact it has on businesses, we will discuss some of the other external factors that affect business performance and can positively or negatively influence growth.

1. Social and Cultural Environment

The social and cultural environment of a region includes the attitudes, values, opinions, lifestyles and beliefs of individuals residing in a nation or region. These characteristics determine customer behavior and are developed from cultural, demographical, religious, ethnic and educational conditioning. The characteristics are often the result of years of conditioning.

Like other forces impacting the external business environment, social factors keep changing continuously. A change in the social attitudes, values and beliefs in a region can affect the demand for different types of leisure activities, books and attire etc.

The factors that influence this impact include:

Demographic Factors

Demographic characteristics such as age distribution, population, literacy levels, religious composition, inter-state migration, income distribution and rural-urban mobility can significantly influence the strategic plans of an organization. This eventually affects the compensation and hiring policy followed by employers within different organizations.

The age demographics in particular countries define the selling and buying environment of that region. Organizations have an eye on the characteristics and the age demographics of the people in the region and make their plans accordingly. Countries with a growing young population have a shift toward more youth-oriented goods, which are meant for younger audiences. These products include fitness equipment, beauty products, magazines, hair and skin care preparations, etc.

On the contrary, countries with a growing population of senior citizens have businesses that focus more on products to this market. Additionally, governments in such countries pay more importance to social security benefits and tax exemptions for senior citizens.

Cultural Factors

Social values, customs, attitudes, rituals, practices and beliefs are formed through years of conditioning and influence businesses and their practices in a number of ways. Christmas offers a great opportunity for tree growers, toy retailers, card companies and mail order catalogue firms to grow their business further and to benefit from the sudden spike in demand.

Social values can best be defined as an abstract sense of what is good, desirable and bad. Beliefs on the contrary can be defined as an understanding of the characteristics that define social and physical phenomena around us. Beliefs are important, since they define the way most individuals think and the rules they have for themselves.

McDonald’s is the ideal example of a foreign brand endorsing local culture and beliefs to sell in different markets. Being a global brand, McDonald’s is present in a number of countries across the globe. The fast food brand does not serve beef burgers in India, because practicing Hindus within the country consider cows to be sacred and prohibit the consumption of beef. Values and beliefs vary from country to country, and organizations should always consider them before stepping into different global markets.

This concept can better be defined through the consumption of soup in both, the United States and Japan. When marketing soup in the United States, restaurant managers and marketers realize that soup works best as an appetizer and builds the appetite for what’s to come, which is why it is best marketed in that role. However, the marketing and positioning of soup would be completely different in the Japanese market. Soup is considered a breakfast drink in Japan, which is why brands market it in that way.

Religious and Ethical Factors

Religious beliefs often dictate the consumption patterns of most users across the globe. Since Muslims, the followers of Islam, are prohibited from eating pork, they don’t have bacon for breakfast or any other meal made out of pork for that matter.

Similarly, religious beliefs set the foundation for ethics as well. The culture of different countries is dictated by the primary religion within the region.

2. Political Environment

Many political factors inthe environment businesses operate in can influence how managers implement strategic decisions and how they formulate ideas for the business. The political environment of a nation determines a number of factors including high tariffs, barriers to entry in a nation, anti-nationalist slogans directed toward foreign brands, bad publicity and a lot more.

While businesses do not want to be involved in modern politics, they do realize that successful growth across countries in the world requires a basic understanding of the laws of the land and how things work in the region.

From tax laws to tariffs, business treaties and commerce in general, a number of factors can be influenced by the politics of the region. These factors are:

• Political climate

• Severity of employee welfare legislation

• Influence of political pressure groups

• Political influence on trade unions

• Protection of special interest groups like consumers, women, minorities

• Simplicity and understandability of government legislation

• Consumer protection laws

• Environmental pollution control legislation

• Government’s view on globalization and trade liberalization

• Political stability

• Political ideology and philosophy of political party in ruling

• Environmental protection laws

• Anti-monopoly laws

• Export restrictions

• Copyright and patent protection

• Extent and nature of government regulation in business and the economy

• Regulatory caliber of government agencies

• Impact of opposition parties on business

• Level of political morality

• Law and order situation

• Political attitude toward business

• Government’s attitude toward foreign business firms

• Corporate and personal taxation rates

• Restrictions on international financial flows

• Legislation that favors business investments

• Controls on business frauds

• Government debt

• Import tariffs and quotas

• Simplicity of tax laws

Some of the ways politics can influence businesses include:

Politics and Business Taxes

Businesses with a higher yearly yield are typically taxed at a higher percentage than businesses that earn within a lower bracket. Businesses in the modern economy need to understand the importance of paying taxes and should recognize that there is no way out of the conundrum. Taxation is an important part of business today.

Business owners also keep an eye on the exchange of rhetoric between the ruling party and opposition parties. Opposition parties are often in favor of reducing taxes on bigger organizations. The pressure put on them by the opposition can eventually determine the response of governments toward progressive taxation measures. A major increase in taxation for foreign brands can also scare a number of brands away from the local market.

Employee Protection and Coverage

Businesses expanding operations across the globe have to keep an eye on the individual employee protection and coverage requirements that are in place by ruling parties in different countries. Different countries have different regulations on minimum wage, health benefits and other instances of employee protection and coverage. A detailed look at these legal factors should clear complications away.

International Business Impact

No business can succeed within a bubble. Sure, an organization can operate on a local level and have customers from within the local region or community, but almost all company owners and investors dream for their organization to go big and have a global impact on proceedings around us.
Political tensions on a global level can impact local businesses as well, since countries’ economies today are all connected in a certain way.

For instance, the departure of the United Kingdom from the European Union negatively impacted a number of local businesses, which although operated on a local scale, had to look at new ways to do business.

Business and politics have an incredible connection, which is something that we will take a look at in greater detail through the length of this manual. The business world can collide with the world of politics in a number of scenarios to create economic openings for the society at large.

3. Legal Environment

The regulatory environment or the legal framework in most countries is decided by the political party in power within the upper house. The government, hence, has the power to legislate on and discuss matters like managerial remuneration, wage fixation, location of plants, safety and health at work, price control, location of plants, licensing policy, entry of multinationals and export policy.

Most mixed economies with a certain level of control exercised by the government follow the same characteristics – the government puts down the rules of the game, while businesses in the industry are required to follow them to the letter.

Companies that want to operate on a global level should study the law of the land in detail and adapt to the requirements it puts on them. The legal framework of all international countries should be respected for the right results.

4. Technological Factors

New technology can be utilized in a number of ways to counter both, recession and inflation. New machines come with capabilities to reduce production costs and can help businesses succeed in what they do. Current advances in information technology have made it possible for global supply chain players to plan for the future and have also enabled them to distribute their products economically in better quantities than before.

Technology is the means by which a business converts all input, including raw materials, into output in the form of finished goods. By this definition, technology can refer to anything that helps in the production process including machinery, tools, work procedures, equipment and employee skills and knowledge.

In the competitive world of today, breakthroughs in the field of technology can significantly influence the efficiency of an organization itself and the stakeholders that it is associated with. Technology can impact the efficiency of the service market a business is trading in, the suppliers, distributers, customers, competitors, manufacturing processes and marketing processes.

During the last few decades, we have seen a greater focus on technology that promotes communication within and outside of organizations. Optic fibers have facilitated technology in communication, robots have completely changed the face of manufacturing processes, digitalization has enhanced the delivery of sound and image output, lasers have come up as the perfect alternative for scalpels in a number of surgical procedures and computers have helped in the processing and structuring of enormous amounts of data.

Technological advances help open up a number of new markets as well. Since technology is an ever involving concept, organizations have to keep a stringent eye on it. Failure to monitor tech trends and evolve according to the requirements can lead to your products becoming old and obsolete. Keeping an eye on technological trends and advancing with the world as it proceeds forward can help organizations flourish in a competitive market. Organizations can also create new competitive advantages through the use of tech sources.

It is technology that helped Dell implement a new inventory management system and flourish in global markets without inventory in hand. It is technology that has helped banks and financial institutes place a number of ATMs across convenient locations to make transactions easier for everyone involved.

5. International Environment

The international business environment can significantly impact the ability of a business to operate on a global level. Fluctuations of the local currency against those of the foreign country can reduce the assets of the company.

Additionally, the emergence of competitors in the international business environment can also shake the grounds that you stand on. Your local market will most definitely opt for that competitor as well, sooner or later, which is why businesses have to keep giving their best, regardless of whether they have a local competitor or not.

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Chapter 3: How to Set Objectives for Your Business

A business can never succeed in a competitive market, without knowing what it wants. Most entrepreneurs and managers today fail at setting objectives for your business. Sure, they start well with a solid business idea and plan of implementation, but without a clear idea of where you’re headed or what your objectives are, businesses can stall before they even get running.

Regardless of the industry a business is in, business objectives and goals are necessary to find success. Objective setting and planning is one thing that remains constant or increases in importance with the passage of time. You can’t let go of the process or your objectives as you grow over time. In fact, these objectives become even more important as your business grows because there is more room for you to fail.

What Is a Business Objective?

In the literal sense of the word, a business objective means something you aim for. It is a goal or an end result that businesses today endeavor to achieve. While goals can be defined as short-term endeavors, objectives last for a longer time and set a long-term aspiration for businesses to follow. Goals could include weekly productivity expectations, monthly sales total or some other short-term objective based on instant results. Goals are essential for businesses, because they help with micro-management and form the roadmap that businesses can follow for success with objectives.

On the flip side, an objective means a long term path for business success over an extended period of time. Objectives are defined as what an organization aspires to achieve over a year of operations. The year itself is broken down into innumerable goals that lay the building blocks to achieve the objectives that businesses have.

Business objectives set a destination for organizations today. As individuals, we usually don’t hop into the car unless we know where we have to go. The same principle applies to business objectives. These objectives act as your destination, the place you want your business to reach. Individuals on executive levels can break down business objectives on a personal level as well to plan their own routine and activities in a way that helps the business achieve objectives. Every objective is unique to every organization, and managers can break them down to achieve an enhanced level of synergy across all sectors and hierarchies of the organization.

Classification of Business Objectives

According to William F. Glueck, “Objectives are those ends which the organization seeks to achieve through its existence and operations.” It is generally assumed that businesses operate with only one objective, which is to make as much money as possible. However, this does not hold true in the business environment of today. Businesses today operate with a number of objectives focused on ensuring the interests of all stakeholders involved with the business. No business unit can solely focus on profits without appreciating the interest of their employees, community, customers and the society around them as a whole.

For instance, no business can prosper in any given market for the long term without providing fair wages to all employees and ensuring customer satisfaction through quality. A business unit prospers only through the goodwill of customers and employees. Business objectives also contribute to national aspiration and goals, as well as toward the international wellness of our planet.

The objectives set by organizations today can hence be classified as:

1. Economic Objectives
2. Social Objectives
3. Human Objectives
4. Global Objectives
5. National Objectives

We now discuss these objectives in greater detail.

Economic Objectives

Economic objectives refer to the objective of profit generation and increasing revenue with time. All other objectives which are tied down to the generation of profit are also covered under economic objectives. The objectives businesses set as part of their economic growth include:

Profit Generation

Profit is the lifeblood of all businesses today. No business can survive in a competitive market without a free flowing stream of profit. In fact, most business entities today operate with the primary objective of profit generation – this is why they were brought into existence in the first place. Profit is earned to ensure the survival of businesses in a tough economy and to ensure positive expansion and growth over time.

Profits help businesses not only establish a positive income stream, but also expand their business and give stakeholders the returns they require. Businesses set other objectives as well that come under economic objectives in order to increase their profits.

Creation of Customers

Creation of new customers is another strategic economic objective that businesses have in mind today. A business unit cannot survive today unless they have new customers to buy their products and services. A business unit can only generate revenue and earn profits when it provides quality goods and services at prices that are reasonable. This can only be done through marketing efforts that attract new customers and sell more to the existing ones as well. Product quality, customer service quality and marketing activities play an important role in this objective.

Constant Innovations

Innovations are improvements that update the service or product standard offered to customers. Innovations can even be related to the production process or to the distribution of goods to customers. The ultimate aim of an innovation should be toreduce wastage and reduce costs for better results. Business units can work on innovation to reduce costs and adopt better production methods for better results. Businesses are eventually able to increase their sales and revenue by attracting a lot more customers than usual.

Regular innovations and efficiency optimization can help achieve a number of objectives for businesses today. Reduction in cost, achieved through innovations, can help increase profit for the business. There are numerous cases of innovations in the business world today, which were achieved through the drive to optimize productivity and become more efficient.

Optimized Use of Resources

A business can only be run when managers have sufficient funds or capital. The amount of capital invested in the business can be used to procure machinery, employ labor, buy raw materials and generate cash to meet the daily operating expenses. Thus, business activities are a result of numerous resources like materials, machines, money and labor.

The availability of these resources, however, is usually limited. Thus, every entrepreneur should learn how to take calculated risks directed toward the best possible use of these resources.

Social Objectives

Social objectives are all objectives meant to be achieved for the benefit of society in general. Businesses operate with multiple objectives, and need to keep an eye out on the communities around them. Since businesses utilize the scarce resources of society to operate, the community at large expects returns from them. Besides cutting out activities that damage the environment or trouble the society, businesses should keep society welfare and benefit in mind.

If the activities conducted by the business lead to harmful effects, there will be public reaction. Social objectives cut down on harmful practices and allow businesses to operate efficiently without a negative footprint.

Supply of Quality Goods

Since businesses utilize a number of scarce resources from society, society expects to get quality services and goods in return from the business. Hence, one objective for the business should be to not only produce efficient goods, but to also supply them to the right people at the right time at the right prices. It doesn’t look right on a business to supply faulty or adulterated goods, which can cause harm to customers consuming them.

Adopting Fair Trade Practices

In almost every country and society, activities such as over-charging, hoarding and black-marketing are considered undesirable by the public. Misleading advertisements also give a negative impression about a product’s quality. Such advertisements tend to deceive customers and are frowned upon by communities.

Contribution to General Welfare

Business entities should work for the general upliftment and welfare of society. This can be made possible through the provision and funding of schools and colleges that offer better education to people from less privileged classes. These training and vocational centers can help people earn their livelihood and improve the standard of living across communities.

Furthermore, businesses can also provide a number of recreational facilities to the general public like sports complexes, parks etc.

Human Objectives

Human objectives relate to the objectives in place for the well-being and satisfaction of employees in the workplace as well as people in the community who are handicapped, disabled, deprived of training or proper education. Human objectives hence include the economic well-being and satisfaction of all employees and the development of human resources.

Economic Well-being of Employees

Employees in an organization should be paid fairly and in time for the services they provide. They should also be provided a solid remuneration and incentive plan to help develop their economic status. Incentives that should be offered include provident funds, pensions, medical facilities and housing facilities where need be. Facilities like this help uplift employee morale and improve their contribution to work.

Psychological Satisfaction of Employees

A business should set objectives to fully satisfy their employees. This can be made possible by improving interest in the job and adding the right person to the right job. Monotony in the workplace is one thing that can kill the satisfaction that employees derive from work, which is why tactics like job rotation should be implemented.

National Objectives

Businesses today are an important part of every country’s economy. Keeping their budding stature in mind, businesses have to fulfill the national goals and aspirations that rest on their shoulders.

Goals of a country could be to provide employment opportunities to all citizens, to earn revenue for the exchequer, to promote standards of social justice and to become self-sufficient in the production of goods and services across the country.

Creation of Employment

One of the most important national objectives for organizations is to create employment opportunities for the employable people of a country. This can be achieved by widening distribution channels, by expanding markets and by establishing new business units. The ultimate objective should be to improve the business and ensure that there are opportunities for people to work at different positions in the organization.

Promotion of Social Justice

As responsible citizens, businesspeople are expected to provide equal opportunities to all people they deal with. All employees in the business should be given true standards of justice and should be allowed to express themselves in the best manner possible.

Global Objectives

Today, because of globalization, the whole world has become a big economy or market. Goods produced in one market are readily available to sell in other countries. So, every business has certain objectives in mind when it comes to facing competition in the global market. These global objectives include:

Rising Standards of Living

The growth of business activities across national borders can help ensure the availability of quality goods at reasonable prices all over the globe. People from one country can gain access to a number of goods in other markets that other countries are using. This significantly influences the standard of living in countries across the globe, due to access to quality goods.

Reducing Disparities between Nations

Businesses should work to reduce the disparities and social cases of inequality between the rich and poor nations of the world by expanding their operations and ensuring that the products and services they offer are the same across the globe. Through capital investments in developing and underdeveloped countries, businesses can signal a growth in their industrial and economic markets.

Making Globally Competitive Goods and Services

Businesses can set objectives to produce goods and services that are competitive in the global market as well. Such goods signal huge demand in global markets and can also help earn more foreign exchange for the nation.

How to Set Actionable Business Goals and Objectives

Many business owners have trouble hitting the bull’s eye with their business targets and performance. There are times when a business knows exactly what they want – a bigger business structure, more leads, added revenue to your income stream, higher profits, better employee morale –but still fails to meet the objectives that are in mind.

Entrepreneurs looking to take their business to the next level have to start their plans by setting the right goals. While creating these right goals can be a challenge, the process can make or break your future progress.

Obviously, businesses and entrepreneurs are required to invest a lot of hard work and money into their businesses to help them succeed. But they also require direction to help guide them. Business objectives act as the perfect starting point, as they define a pathway that businesses and the managers setting sail can follow.

Some of the tips you can follow for effortless objectives are:

Be Clear on What You Want to Prioritize

One of the biggest challenges for startups today is that everything needs to be done at the same time. Entrepreneurs are responsible for guiding this change and progress forward. They need to find new clients, manage finances, keep existing clients happy, motivate current employees and streamline the processes on their list. All of this has been to be done at the same time.

The conundrums faced across these departments can often confuse entrepreneurs as to which department deserves their full attention. In order to set the big company goal for the year, businesses should be able to tell what their top priorities are. Priorities determine just what the business should focus on.

A SWOT analysis is the perfect way to begin this process and to be crystal clear on what should be addressed first and the glaring errors that should be removed. We look at the SWOT analysis in even greater detail later in this course manual. The analysis studies the strengths, weaknesses, opportunities and threats of an organization.

The SWOT analysis is the perfect way for organizations to recognize the problems they should address first. The analysis does a perfect job at assessing your strengths, opportunities, weaknesses and threats. The SWOT analysis can also give organizations an idea of what they should prioritize and the goals they should set for their brand. An understanding of the current strengths and weaknesses with future threats and opportunities can help businesses evaluate their current standing and also set their objectives in a detailed manner.

Review Objectives with Team

Every successful entrepreneur and business owner realizes that the people who work for them are their most valuable asset. Your business objectives and goals should hence be run through them so that you have their nod of approval.

Your team is working on new products and talking to clients on a daily basis. They are possibly the ones who know the most about areas where the business can improve. They can also significantly pinpoint areas that need your attention, so that you can focus on them and significantly improve output. Once you have compiled your SWOT analysis and selected the top goals for your business, you should sit down with all employees and get their feedback on the subject matter. Since they’re on the field most of the days, their useful insights can help you improve your output as well.

Also, as Dale Carnegie pointed out, “People support a world they help create.” Keeping this in mind, you should also give your employees the chance to be a part of what you’re creating in the workplace.

Make Goals SMART

The SMART acronym is expansively used by people in the business world today. Once you have decided how to coin your business objectives and the importance of including employees in the decision making process, it is time that you create objectives that meet the SMART acronym:

• Specific: What exactly are you going to do with this objective?
• Measurable: How will you recognize that you’re succeeding?
• Achievable: How do you plan to implement the goal?
• Relevant: Does the goal you have in mind connect to your overall objectives?
• Timely: When can you realistically achieve the goal?

The SMART acronym is a clever way for organizations to grow their business and to follow a clear strategy while at it.

Set KPIs

Now that you have built your goals and worked with your team to convert them into SMART goals, it is time that you sit down and come up with ways to measure your goals and to set timelines to achieve it. You definitely cannot manage what you cannot measure, which is why it is necessary that you measure the progress you make and take it forward from there.

The most common way of measuring your success toward objectives is through KPIs. Key performance indicators are numbers that you track to identify the progress made toward achieving an objective. For instance, if your objective is to experience growth with time, then the number of new customers coming into your business would be a good KPI to measure progress and to identifying just how much more you need to do. You can also set different KPIs for the business as a whole, based on what works or doesn’t.

This is something we look at in greater detail within the next chapter.

Build Good Business Practices

Just like you would build good individual habits while achieving and fulfilling personal goals, you should live by the same principles while achieving your business objectives. The actions that achieve the KPIs you selected above can be honed through decent business practices.

Automate the process as much as you can and start by making a calendar for both, you and your staff. You can also add reminders on the calendar to help you keep tabs on just what you need to do. Also, you need to regularly analyze and review your progress, and resolve whatever issues you feel are restricting your move forward. Review if you have highlighted the right KPIs and what could be done to improve them even further. Measuring progress is necessary to meet objectives, and we explore the concepts further in the next chapter.

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Chapter 4: Metrics for Measuring Business Success

Metrics and KPIs are important parts of measuring business success. Businesses can only evaluate their performance and measure the progress they have made in regard to achieving objectives if they duly monitor their metrics in time.

Before we start, metrics and KPIs are best defined as:

Metrics are measures that are used to monitor and evaluate all the different parts of your business. I believe for our purposes Metrics are broader than KPIs.

KPIs (Key Performance Indicators) are a subset of metrics, and let you measure specific, highly critical areas of your business. Specifically, you should be looking at how KPIs are trending, looking for improvements, and determining how you can improve overall performance.

Tracking metrics and KPIs related to your business can help you not only improve your overall results, but also align your people and processes together in a unified manner. It gives you a series of benefits that eventually help you improve your operations.

The importance of metrics can be determined through the benefits you can derive through them. These benefits include:

• Metrics and KPIs help you measure financial performance. They are also extremely vital for managing your cash flow and ensuring a healthy stream of income.

• Metrics and KPIs can reveal the truth about your business. They help you understand the progress your business is making from the highest level, right down to every individual employee.

• Metrics and KPIs also give top management executives and employees a fair idea of what’s important for the business. Once employees and top managerial employees see what is being measured, they are able to tell what matters to the business and what they should be focusing on.

• Metrics also provide an actionable way for businesses to track their progress and ensure that they are on the right track and aren’t missing out on anything that can determine future profitability or success.

• Metrics and KPIs also highlight issues that otherwise go unnoticed in the organization. Due to these metrics, efficiency and productivity within an organization are given an additional boost.

Choosing the Right Metrics

Of course, reading through the benefits of metrics and KPIs for your business does not help you much, if you aren’t aware of the process for choosing them.

Most organizations fall into the random trap of setting KPIs and metrics without checking their suitability and relevance to them. Organizations that set metrics just for the sake of having them aren’t able to achieve the kind of results they require. The metrics and the KPIs you choose for your business should ultimately help you achieve your objective. Completely unrelated metrics can give you a false sense of security, while your business diverts from the actual objectives it has set out for itself.

Start the progress by studying high level metrics that are crucial to the success of your business. Such metrics include net income or days to close. These metrics can then be followed up with a series of KPIs that help your team improve performance and become a more potent workforce. Successful KPIs help businesses track progress and monitor efficiency.

Think About Employees

Do not just think about data when you’re setting your metrics inside your organization. Instead, think about your employees as well. Your people are probably the most important for your organization, and how they feel about certain metrics and KPIs should matter to you.

KPIs set the tone in your organization and should be achievable yet challenging. Think about it – KPIs that are too easy for your employees can turn them complacent, without focus on improvements, whereas KPIs that are too challenging and not achievable will burn your employees out and make them feel demotivated and frustrated. Organizations face difficulties in finding the right balance between the two, but ultimately have to come up with a strategy that can help them maintain a balance. It is important that organizations keep raising the bar when it comes to KPIs. Strategic improvements can help clear backlogs and stop employees from becoming complacent.

Metrics That Every Organization Should Track

What’s the best way to measure your business’s performance? Well, while there are multiple correct approaches and metrics for the job- one way not to do it is by following your gut. Running a business requires thorough understanding of the sales and financial results your business is able to achieve and an in-depth look at what can be done to better them.

This process of improvement cannot be implemented without the incorporation of relevant metrics that help in the tracking process. Your metrics should make tracking easier for you, and ensure that you are able to not only monitor, but also work on your performance.

In this section we explore a number of business metrics that are popularly used by businesses to explore company performance and to track your output.

Sales Revenue

Sales Revenue is an important performance metric and is by far the one you should always have your eyes on. We choose to have this metric mentioned right at the top, because it tells a lot about your company and the progress you’ve made or are capable of making.

Your sales results from specific business periods give you insights into just how interested customers are in buying your products or services. These results can help tell you whether your marketing efforts are paying off and whether you are still in the running against your competition, with much more.

When evaluating their sales revenue, it is necessary that organizations remember that sales output or revenue in general is impacted by multiple factors. The person tracking this metric should be aware of all recent changes in the market and the cyclical buying behavior shown by employees along with competitive actions and marketing campaigns run by you.

Sales revenue is measured by summing your income from all client purchases, minus the cost of returned or faulty goods. The most obvious way for businesses to improve their sales revenue is by marketing more. Hire new salespeople and market discounts that are hard to resist for your target market. Focus on a long-term strategy for sales than on a quick and temporary fix.

Net Profit Margin

The net profit margin basically helps indicate just how efficient your company is currently at generating profits in comparison to the revenue generated. Most business owners evaluate their performance based on the revenue figure alone, without computing for net profit. Even when they do consider net profit, they look at both these figures in their individuality, without contemplating the impact they can have with regards to one another.

Basically, the net profit margin gives you an idea of the percentage of your total revenue that translates into profits. Many startups do have encouraging revenue figures, but are unable to translate the income into profits, due to their free flowing expenses. Expenses need to be contained, and the best idea to find out more about them is through the net profit margin.

The net profit margin can be calculated by summing up your monthly total revenue and reducing all sales expenses from the total figure you get. You can also calculate your net profit margin by finding the percentage of your net profit against sales. For instance, if a business records a net profit of $40,000 against revenue of $100,000, the net profit margin would be recorded at 40 percent. The net profit margin also gives businesses an indication of their operating expenses and whether they should work on minimizing them.

The best way to improve your net profit margin is by working on your revenue and limiting unnecessary expenses. You should run a cost audit to determine all sales and production costs that don’t add value to your business. These costs should be minimized, since they reduce profit and eat up your sales revenue. However, focus should always be on product quality to ensure you don’t go for a cookie cutter approach over innovation and design quality in production.

Gross Profit Margin

The gross profit margin further simplifies this process and makes it easier to understand. The higher your gross profit margin, the more your company earns on each sales dollar. Where net profit is computed by subtracting all related operational expenses and overheads from your total revenue, the gross profit is calculated by only subtracting the cost of goods sold from your sales.

The cost of goods sold is the direct manufacturing or merchandising cost of all goods that you sell to retailers or end customers. This figure will help you understand the direct efficiency of your sales and whether you need to increase prices or cut down on merchandising costs.

The gross profit margin is computed in a similar manner to that of the net profit margin, with the only difference being in the values of the profit considered. Taking the example we mentioned above forward, let’s say the manufacturer has a gross profit of $60,000 against the $100,000 of sales. The gross profit would be calculated by dividing it by the total sales revenue and multiplying by 100 if you want the answer in percentage. Your gross profit margin can be improved by adding efficiency to your production and sale processes. The more efficient you are in these two processes, the more profitable your business will be.

Sales Growth Year-to-Date

All business owners and managers today would love to be able to track their company’s growth on a month-to-month basis. Since sales are entirely dependent on the mood and buying behavior of customers, the sales growth year-to-date metric can help identify the pace at which a business is growing. The metric will help identify the speed at which the business is increasing or decreasing revenue. Businesses should make it a goal to accelerate their sales growth every month, or should try to keep it at the same rate during cyclical demand periods across seasons of high and low demand.

Monitoring growth in revenue generating across periodic time intervalscan help give you a better understanding of where your company currently stands. The metric will help identify the pace at which you should develop your business.

This can be measured by evaluating your sales revenue and the number of new customers or deals you have made in a period. If your sales team is distributed across multiple departments, you can track this metric across every team. This will help you get a better understanding of how efficiently different sales departments and teams are performing in your organization.

Similar to other profitability metrics, you can improve how you perform on this metric by working on your marketing and sales activities. Sales growth can also be boosted through marketing efforts that help give you the coverage you need across different platforms.

Cost of Customer Acquisition

There are a number of things that contribute to the cost of acquiring a new customer. The cost of customer acquisition, or CAC as it is called, is calculated by dividing all the costs you have spent on acquiring a new customer during a given period with the number of new clients you have acquired in a period.

For instance, if you acquire 40 new customers in the period of one month and spend $8000 on marketing for the same period, your CAC will come up at $200 per customer acquired. Customers matter to businesses and new customers bring new revenue generation opportunities. When a customer is acquired, the next step in the process is to build loyalty and improve service performance.

The cost of customer acquisition can be improved by working on product or service quality and ensuring positive reviews and word of mouth marketing from current customers. This will help market your product or service naturally and will further help bring in new customers without spending lavishly on marketing processes. Also, referrals and recommendation processes can be implemented here.

Customer Loyalty and Retention

Having loyal customers can prove to be beneficial in a number of ways. All major businesses today have succeeded on the basis of their customer loyalty and the trust they have shown in them. The trust put by your customers in your performance can eventually help you grow your sales and can also help spread positive word of mouth related to your business.

Customer loyalty and retention is measured through a metric or KPI known as retention rate. This KPI gives businesses an idea of the number of customers that use their products and the extended time period they use it for.

The retention rate can be calculated through the following formula:

Retention Rate = ((CE-CN)/CS)) X 100

CE = number of customers at the end of a certain time period (1 year, for example)

CN = number of new customers acquired during the same time period

CS = number of clients at the start of the time period

The results you get through this formula will help determine the number of customers that are loyal to you. The customer loyalty or retention ratio can be significantly improved through excellent customer care services and by delivering the highest quality of services to your customers. Consistent quality complemented with good customer service can help give your customers the motivation they require to stick with you.

Net Promoter Content

The net promoter content is a metric that deals entirely with the quality of the product or service and the level of customer satisfaction given to employees. The metric shows just how many people are likely to recommend your services or products to their friends and family.

As per the different tiers of Net Promoter Network, there are three different levels of customer advocacy for brands. These tiers include:

1. The first tier includes all loyal enthusiasts and promoters that praise your company in front of others and play a major role in driving your new sales forward. These promoters are responsible for a bulk of the new sales opportunities and orders you receive.

2. The second tier includes passive customers who are satisfied with the services you offer but are often unenthusiastic about promoting them to others or even maintaining their loyalty for long. These are customers who will leave you as soon as they get a better offer or option somewhere else.

3. The third or last tier consists of detractors. Detractors are all customers who damage your brand’s reputation and spread negative information about your company. Detractors can inflict a lot of damage on your firm’s reputation.

This metric is related to marketing and can be measured on a ten-point scale by conducting interviews and customer surveys. All customers with a rating of 8 or more can be considered promoters. Those coming in between 5 to 7 can be considered passive and those below 5 can be considered detractors. The data or substance for this ranking system is gathered through emails or customer surveys. The evaluation and data structuring process will take some time, but it will eventually give you enough leverage to rank your customers in a manner that you want. The net promoter score can eventually be found out by subtracting the percentage of detractors from the total percentage of promoters.

Your customer loyalty and net promoter score can be improved by enhancing your customer services and by delivering the quality standard that your customers expect from your brand.

Qualified Leads per Month

As your company grows by leaps and bounds, you will be able to invest more in sales and marketing. Soon, you will open up hundreds of avenues that lead to new sales opportunities and growth potential every month. Butnot all the leads that you conjure up have the potential to become customers for you in the near future.

This is exactly why businesses and managers should be tracking the number of qualified leads they rope in every month. The business metrics you show here will eventually influence the qualified leads you develop in the future.

All of your new leads can be categorized on the basis of three distinct groups:

• Marketing qualified leads: MQL comprises of all leads that are qualified by the marketing team on the premises of your workplace. These leads match your potential requirements set on the basis of your company size and the expectations you have from the organization.

• Sales-accepted leads: Sales accepted leads or SAL are all leads that the marketing team forwards to the sales team. The sales team takes up these leads to begin work on them based on their own schedule.

• Sales qualified leads: These are leads that are considered qualified by the sales team. These leads have the highest potential of becoming customers in the future, since they are considered qualified and final by the sales team within an organization.

Lead generation measures can improve if the organization decides to build a niche market instead of targeting thousands and millions of people. This niche audience will be interested in the products and will help improve your lead generation and qualification measures.

Monthly Digital Traffic

With the growing focus on digital marketing, it is necessary that businesses add their monthly website traffic to the mix as well. Digital is the way forward currently, as it educates people about what you’re offering and can also help them get a better understanding of your products and services.

The more people hear about your product and services, the more likely they are to use them. Marketing KPIs for digital marketing can be divided between the following heads:

Marketing KPIs can be divided into five main categories:

• Lead generation
• Website & traffic metrics
• SEO optimization
• Paid advertising
• Social media tracking

The way to go about this process is to start by using a free marketing tool such as Google Analytics. A tool like Google Analytics will help you track the monthly traffic on your website and will also help you discover the behavioral instincts ofpeople who use your website and what they use it for.

The easiest way to improve your digital KPIs is to work on your advertising budget. An increase in the budget, along with the right employees and tactics, can definitely take your digital marketing results forward.

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Chapter 5: Evaluating Business Performance in the Modern Economy

Once their business is well set and running well, many entrepreneurs may feel inclined to let things continue in the same manner as before, without changing much about the processes that are performed at the core of the business.

However, initial success and customer traffic shouldn’t be taken as an indication to slack off. As soon as your business finds its initial footing, you should start planning again and reviewing your progress. After the crucial initial period has passed, you should regularly review the progress you make as a business and identify opportunities that can help you make the most of the position you find yourself in in the market. Entrepreneurs need to constantly evaluate their business and find new areas where they can take their business. As part of this strategy, entrepreneurs will even have to go back to their business plan and update it to match their current requirements. All developments you’ve noted should be strategically overseen and plans ready to counter threats.

This chapter takes you through the very important process of planning for your business’s success. Progress is a constant part of operations for all businesses by all means today and shouldn’t be compromised on at all. This guide takes you through the evaluation process and also suggests actions and processes that can help you through it.

Importance of Evaluating Business Progress

It is easy for entrepreneurs and managers to get overwhelmed by the day to day operations of their business and focus only on the current operations, without worrying about what the future holds. Once a business is up and running, it can pay dividends for entrepreneurs to think about strategic plans for the long-term. The importance of evaluation and progress becomes even more important as you take in more staff, appoint managers, create departments within the organization and become distanced from the usual everyday running of your business.

Reviewing your business’s progress can be particularly helpful if you feel:

• Uncertain about just how your business is performing and aren’t sure about what to do. This uncertainty can more often than not land businesses in hot waters.

• Unsure whether or not you’re getting the best possible output from the resources you have invested in your business. The possibilities here are endless and you should ensure you get the most out of your opportunities.

• Your business plan is out of data and needs serious updates. This can be true if you’ve been in business for over a year and still haven’t touched or considered your business plan in full.

• Your business is headed in the right direction. This question comes to mind when you’re sure of which direction you want your business to go in, especially with regards to a few metrics. You should always track business progress and determine whether it is in line or contrary to the direction you had set.

• The business is not responding to market demands in a manner that it should.
Evaluating progress can also come in handy if you have decided to take your business to the next level as far as output and operational efficiency are concerned.

Strategizing as Part of Business Evaluation

Strategizing is an important part of business evaluation as it gives you an opportunity to determine what’s right for you in the long run. Questions you can ask yourself while setting the strategy for your business include:

• What is the direction I want for my business? To determine the right answer to this question, you need to look at where you currently stand, where you see yourself over the period of the next three to five years, and how you plan to reach the end goal you have in mind for yourself.

• What are the recommended markets for your business now and in the future? Which markets should you step into, how will they change what you do and what your business needs to do to be involved in these multiple sectors?

• How can you gain market advantage? How can your business perform better than the competitors you currently have in the market of your choice, identified in the question above?

• What resources do you require to succeed in the modern economy? What skills, technical knowledge, relationships, finance, assets and managerial facilities and competence do you require to compete in the global market? Have these requirements changed since you started?

• What is the business environment that you’re currently part of? What external factors have a role to play in affecting your business’s ability to grow and compete?

• How can you measure the success of your organization? Remember that all measures of performance will change as your business matures and grows in stature.

It is doubtful for entrepreneurs to be able to answer these questions on their own, which is why they can involve their advisors and other trusted personnel to come up with reasonable answers.

Assess Core Activities

A good starting point for your review is to determine what you actually do – your core activities as they are called, the services or the products that you provide to the market. Start by asking yourself about the efficiency of these products and services, and what could be done to improve or launch new or complementary services in your package.

When it comes to core activities, it is useful to understand and answer these questions in light of the global economy:

• How effective are you at matching the standards and quality of your goods and services to the requirements of your customers? If you aren’t sure of these needs, you can proceed and carry out an additional market or customer analysis. Customer and market analyses are often the need of the hour in confusing times.

• Which of the products and services that you offer currently are succeeding in the market? Which of the products or services aren’t performing well? Determine the results you get from different products and see which ones offer good returns, and which don’t.

• What is the reason behind the failure of products and services that aren’t really performing well? Consider all areas such as pricing, after sales services, marketing, design, systems and packaging during your review process. Find areas you can improve, realistically.

• Are you reviewing the costs and pricing of products on a frequent basis? Do you keep a close eye on all direct costs related to operations and indirect costs related to overheads? Are there any other ways you could follow to reduce the costs you incur on a monthly basis? Consider ways which you can follow to reach better deals with all suppliers and distributors.

Answering these questions will give you the solid base you need to improve your profitability and performance in the long run.

Assess Business Efficiency

Many new businesses adopt a reactive approach to cases of inefficiency in the business. A reactive approach might look better than a proactive approach in the moment, as it can save you costs and time in the short-term, but it eventually backfires and gives you more to fret about than rejoice over. The best option for all businesses today is to balance their overall strategy through clarity and a proactive approach.

A proactive approach to production, distribution and all other facets related to your business will help you decide what can be done about improvements in efficiency. At this point, entrepreneurs should ask themselves if there are any related internal factors holding their business back. Once these factors are brought on paper, they should find out exactly what can be done about them.

All related aspects of the business should be considered here for better analysis:

Premises

• What are your long term plans and commitments with regards to your business property and location?

• What are the current advantages and disadvantages of the location you operate from?

• Do you have room to grow your business further? Do you have a growing workforce and the current premises aren’t enough to accommodate them? Also consider the flip side of this question; do you have enough employees for your current premises? Can you afford your current premises, especially when there is vacant space?

• If you upgrade your premises option, what will be the cost of the move? Will there be any long-term improvements or cost savings involved in the process? How will the move impact your efficiency and other related factors?

Facilities

• If you are a manufacturer, how modern is the equipment in your factory? The age and efficiency of the equipment matters, because most downtime in an organization is suffered when businesses fail to maintain quality equipment standards.

• What is the current capacity of your facility, and how does that compare to the existing and forecast demand for your premises?

• How will you fund improvements within your facilities? Do you have savings to invest here?

• How do your facilities compare to those of your competition?

Information Technology

• What are the information technology and management systems that you have in place currently?

• Will the systems you have in place currently cater to the proposed expansion plans you have for later? This is important toanalyze your future growth plans and to find out your efficiency in relation to them.

• Do your current IT systems really make a difference to the end product you’re providing to the masses? If they don’t then are you ready to implement the changes that are required from your side?

• Are you utilizing the full potential of new technologies such as wireless networking and flexible work schedules?

People and Skills

• Do you have the right people for the right job to help you achieve the objectives you have set for your organization?

• Do your employees know what is expected of them? Management by objectives helps inculcate the importance of individual objectives in employees in the longer run. They can help employees become a lot more proficient at what they do.

• Do you have a training and development plan in place to help your employees?

• Do you pay as well as your competition does? The wage rate or the monthly payout plays an important role in determining the success ratio of your employees.

• Does your firm suffer from high staff turnover? High turnover is often a result of metrics related to motivation and satisfaction. Study whether your staff is motivated by the work they do.

Professional Skills

• Do you have the right management team working for you currently? Is the management team capable of handling operations even during times of growth that will be experienced in the future?

• Do you have the skills required to excel in areas such as human resources, IT and sales? Employees with specific skill sets need to be working in these areas.

• Do you need to develop the skill set of your staff members? What should you do to retain staff?

All of these questions will help you assess business efficiency and determine just how ready you are to step into the modern environment of change and rapid progression.

Review Financial Position

Businesses in the modern era often fail because the management does not oversee financial management in a manner that they should. This exerts a lot of additional pressure on the business. Lack of planning, budgeting and proper financial management can lead most businesses towardfailure. The business plan that most startups and organizations create to raise funds and finance the initial growth plans is kept on a shelf to gather dust. The business plan isn’t included in plans or budgets and none of the instrumental information mentioned in it is utilized for the financial and operational management of all operations.

When it comes to the overall success and assessment of a business, financial management systems play a vital role. Developing and implementing a sound financial management system or paying someone else with more expertise to do it can help businesses become a lot sounder, financially and integrally.

The first place to start this ground work is from the original business plan that has been left to gather dust in store rooms. When reviewing and analyzing finances, businesses would like to consider the following aspects:

1. Cash Flow: The first factor to consider in financial management analysis is cash flow. The profits and revenue generated by an organization do not matter as much as cash does. Why is it so? Because cash is actualized and can help organizations update resources and fund capital expenditures. The cash flow maintains a balance of all the money that is flowing in and going out of the business. Most businesses prepare cash flow forecasts as well, as part of their cash flow management process. Make sure that these forecasts are regularly reviewed and updated.

2. Working Capital: The working capital is the amount of money readily available to your business for operational and capital expenses. The working capital is usually used as a measure to determine the financial strength of an organization. Working capital is studied in depth when the requirements related to a business change. If the working capital changes, businesses should be able to explain the reasons behind this sudden movement. Working capital bases should always be compared to the industry standard and steps be taken to source capital from other sources if the existing work capital falls short.

3. Cost Base: The costs incurred by your organization as part of operational expenditures and other routine overheads should be kept under constant review under your financial management measures. Make sure that the costs you incur are covered in the sales price you set for your business. However, it is very unrealistic for businesses to expect that customers will pay for their inefficiencies. Customers will only pay what it genuinely took you to create this product. Hence, don’t expect them to pay more for your financial inefficiencies and inability to maintain a stringent check on your cash flow.

4. Borrowing: Borrowing and financing are important parts of the financial management process. Businesses should consider the position of any/all lines of credit or loans they have. Once these lines of credit are analyzed and considered in detail, businesses would be able to determine if there are cheaper forms of credit available to them. If there are cheaper alternatives available to users, then businesses should be able to borrow them at reduced rates.

5. Growth: Growth is a major objective for all businesses, and financial management plays a major role in determining whether it is on the cards or not. As part of your financial management measures, you should determine the financial feasibility of growth in the near future and also determine whether it is something you can positively embark on in the near future.

Run a Competitor Analysis

With the financial and efficiency analysis out of the way, it is time for you to move over to the broader spectrum of competitor analysis. If you’ve been in business for a significant period of time, you would know most of everything there is to know about your competition and the strategies they are following for growth and success. Gathering more information about your competitors and their practices may take some time, cost and effort, but there are innumerable benefits to this. Knowing more about your competitors cannot only help you benchmark standards, but also helps you determine the right strategy for future growth.

What Do You Need to Know?

The type of information you should have on your competitors depends on the industry you are in, and the kind of market you are currently operating in. Competitor information required by businesses can vary from market to market and from industry to industry.

Questions you should have related to your competitors include:

• Who are your competitors?

• What do they offer? Try to find out what they offer that you don’t

• How they price the products that they sell in the market. What is their pricing strategy?

• What are the competitive advantages and disadvantages of your competitor in relation to you?

• What is their current profile and how many customers are they currently dealing with? Compare this with what you’re currently dealing with to determine their advantage.

• What is their reaction to your entry in the market? Also, find out how they feel about the product/price changes you bring to the industry.

A SWOT or strengths, weaknesses, opportunities and threats, analysis can come in handy here as it gives you just the kind of information you need to know more about to further your opportunities and growth potential. This analysis will also show you just how you’re performing in relation to the market and what can be done to mitigate threats that you currently face from other competitors in the industry.

How to Find This Information

There are three main strategies that can be followed to unearth information related to your competitors. These strategies include:

• What do your competitors have to say about themselves?: This can be unearthed from exhibitions, websites, competitor visits, sales literature, press releases, shared suppliers, advertisements, and company accounts.

• What do other people say about them: Your customers, sales, people, the internet, local directories, newspapers, market research companies, and local directories are good sources for this information.

• Commissioned market research: Finally, you can run commissioned market research to unearth detailed information. This research does cost money, but is detailed and informative.

Customer and Market Analysis

When most firms start their business or first initiate operations, they probably have a marketing plan on paper, within the overall business plan. This business plan defines the market that you intend to target, and the marketing tactics that you will be adopting as part of this.

The business plan and the research done for it can help marketers and entrepreneurs come up with a marketing plan to help fulfill their objectives. When you finally start your business and have been in operations for long enough, you will need to assess your market positioning and customer base as a key part of that process. The business evaluation process isn’t over without assessing your marketing strategies and what can be done to improve your overall impact on customers. Businesses should look to update and maintain their marketing plan just as much as they look after their business plan.

Revisit Your Markets

A business review of your marketing plan and customer base gives you an opportunity to stand back from planned activities and look at a number of interesting factors such as:

• New and emerging services

• The changes that you have witnessed in your market

• The changing customer needs and preferences

• External preferences such as new technology, imports and other substitutes and how they impact your performance

• Changes in the competitive activity in and around your environment
Asking for feedback from your customers can help you identify where you need improvements in your products or services. You can also identify whether you need to update your business procedures or staffing levels moving forward.

At the same time, it is equally important for you to highlight that while reviews of such nature can be effective, they require a proper discussion over the implications of changes in your business strategy.

Use Results from Reviews to Redefine Business Goals

To succeed in the tough business environment of today, it is highly necessary that businesses regularly set time aside to ask key strategic questions, including:

• Where is the business now?
• Where is it going?
• How is it going to get there?

Many times, businesses and the managers leading them are able to work out where they want to take their business but aren’t able to develop a roadmap on just how they want the processes to phase out. Without the presence of a road map, businesses will lack the purpose and direction needed to turn all their carefully laid plans into the reality of today.

At the end of every review and evaluation process, it is highly necessary that all businesses follow up on the progress that has been achieved and put the new ideas into place. Regular monitoring of the new plan, along with an eye on standard objectives can help businesses improve their strategizing processes and maintain business success.

A simple planning cycle can greatly enhance the ability of most businesses to update their business routine. Also, strategizing and reviewing regularly can help determine whether your business needs external help to help you with the changes you have to make in your organization. If this is the case, then an entrepreneur can consider:

• Employing skilled consultants in all areas where they cannot afford to develop in-house employees
• Appointing a non-executive director with command to provide a regular assessment of the work being done
• Using a management consultant to further strengthen the organizational setup in your firm and help with growth

There are a number of business models that can help you take the business analysis process forward and think more strategically about your business’s future. We will now proceed to these models in the upcoming chapters, and look at them in greater detail.

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Chapter 6: Porter’s Five Forces

Porter’s Five Forces is a framework used to analyze the level of competition within an industry and determine just how that competition impacts you and your business. The five forces can prove to be especially useful when businesses are starting fresh, or are thinking of joining a new business.

According to Porter and his five forces, the competition in a certain industry comes through a number of factors, other than just the competitors themselves. Porter believed that the state of competition in an industry is dependent on a number of factors, including the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the existing industry rivalries and the threat of substitute products or services.

The collective strength of all these forces together helps determine the profit potential of an industry and what it means to the average business. If all of these five forces are intense, as is the case with the airline industry, then almost no company in the industry will be able to earn attractive returns on their investment. However, if the forces are mild, like is the case in the soft drink industry, then there is significant room for higher returns and interest rates.

We will elaborate on each force in this chapter, with a concurrent example of the airline industry to build concepts further. The airline industry gives a helpful blue print to understand all forces of the analysis and will help better understand and comprehend the situation.

We start our analysis by discussing a few factors affecting each force outlined by Porter along with a guide on how businesses can use this analysis. With this done, we will move on to discuss each force in detail and illustrate it further through an example from the airline industry.

Full List of Porter’s Five Forces Factors:

Threat of New Entrants

• Economies of scale
• Product differentiation
• Capital requirements
• Access to latest technology
• Access to necessary inputs
• Absolute cost advantages
• Experience and learning effects
• Government policies
• Switching costs
• Brand identity/loyalty
• Access to distribution channels
• Expected retaliation from existing players

Bargaining Power of Suppliers

• Number of suppliers
• Switching cost for supplier’s products
• Supplier’s threat of forward integration
• Size of suppliers
• Supplier concentration
• Availability of substitutes for the supplier’s products
• Uniqueness of supplier’s products or services (differentiation)
• Total industry cost contributed by suppliers
• Industry threat of backward integration
• Supplier’s contribution to quality or service of the industry products
• Importance of volume to supplier
• Importance of the industry to supplier’s profit

Bargaining Power of Buyers

• Buyer volume (number of customers)
• Size of each buyer’s order
• Buyer concentration
• Industry threat of forward integration
• Price sensitivity
• Buyer’s ability to substitute
• Buyer’s switching costs
• Buyer’s information availability
• Buyer’s threat of backward integration

Threat of Substitute Products or Services

• Relative price performance of substitutes
• Perceived level of product differentiation
• Switching costs
• Number of substitute products available
• Buyer’s propensity to substitute
• Substitute producer’s profitability & aggressiveness

Rivalry among Existing Competitors

• Intermittent overcapacity
• Informational complexity
• Barriers to exit
• Number of competitors
• Diversity of competitors
• Industry life cycle
• Quality differences
• Product differentiation
• Brand identity/loyalty
• Industry concentration and balance
• Industry growth
• Switching costs

How to Use Porter’s Five Forces Analysis

Porter’s five force analysis can take multiple shapes and forms, all coming down to the scale of your operations and the industry you are operating in. Additionally, the analysis can also vary in shape and form based on the time and money you are ready to devote to the process. However, the basic steps of the analysis remain the same for each organization, regardless of how long they want to work on it, and the resources they’re willing to utilize.

Brainstorm

The very first thing you should do before starting on the five force analysis is to take your time and create lists for each of the categories we have mentioned in the five forces. To make things easier for you, we have already mentioned a list of all factors that should be considered within each force. These factors will help you brainstorm as you come up with industry and company specific ideas for each force.

The brainstorming process shouldn’t be limited to just your general frame of reference. For instance, when you’re looking at competitors and suppliers, you might only think of a few direct suppliers and competitors that you have links with in the market, but it is necessary that you consider all suppliers and competitors in the market, so that you understand what is at stake here. Consider your entire industry in full and consider each and every stakeholder that you feel has an impact on organizations within your industry.

Research Exhaustively

One mistake many organizations end up making during the five force analysis is to skip on major details. Do not skip over details that you think are part of the industry, but do not directly impact you or are just a bit unimportant to you in the process. However, the very purpose of the five forces analysis is to give you an in-depth and exhaustive picture of how your industry functions and the competitive advantage that you enjoy within that industry. To compute your fair market share and competitive advantage, it is highly necessary that you enter all details and don’t miss out on anything specific.

Porter’s five force analysis shouldn’t simply be confused as a place to list down things you already know about your industry, without studying new items and adding things that you’re relatively unaware of. This process should be able to uncover new information and give you a perspective that you were previously unaware of. The new information uncovered in this section can possibly affect your company’s future growth and progress.

Evaluate the Data

Data evaluation is an important part of Porter’s five force analysis. You should make sure that your entire analysis is based on hard numbers and solid facts. Some parts of the analysis require you to rely on industry insight and conventional wisdom you acquire from experiencebut your evaluations should still be based on solid data than on assumptions and other thought processes. The threat of other products and the bargaining power of customers are two instances that can be based on historical data present in your organizational records.

Conduct Regular Analyses

Michael Porter came up with an analysis that takes five of the most important forces shaping competitive strategy into perspective. Porter, however, never postulated that these factors will remain static across a length of time. The Porter’s five force analyses should be conducted on a regular basis to keep a track on the changes within your industry. The analyses can also help you improve the efficiency of your business from time to time and benchmark progress within the industry.

Ways Porter’s Five Forces Can Help You Succeed in Business

Most business owners and managers spend their whole careers thinking of competitive forces that can shape strategy. The competitive forces in most industries aren’t static, which is why routine analyses of your industry are vital for success.

Porter’s five forces help in this analysis by adding value in the following stages:

When You Start a Business

Before you take the leap of faith into an unfamiliar industry without prior knowledge of what works and does not work in the industry, it is necessary that you run and understand Porter’s five forces analysis in full to get the lay of the land. Understanding the factors covered in the five force analysis can be necessary for success later in your business life. Be realistic about the stability in the market and also determine how new entrants can influence your market share.

When You’re Evaluating Profit Potential

Porter’s five forces can be the go-to solution to evaluate the profit potential of your organization and find where you stand with regards to profitability and success. The five force analysis can be an excellent way to get an accurate picture of what the future holds for you. As a business owner, it is necessary that you stay up to date with how the industry is changing and implement the dynamic solution of Porter’s Five Forces. Make sure that all decisions are based on accurate information.

When You’re Determining the Efficacy of a Strategy

Porter’s five forces analysis can help you determine the effectiveness of a strategy after it is completed. The analysis will help give you results and updates on whether the strategy worked or not and will also help guide you forward in your future endeavors.

Understanding the Five Forces

Having studied the business benefits of Porter’s five forces analysis, we now move on to discussing each force in detail, along with providing a relevant example of the airline industry.

Threat of New Entrants

New entrants in every relevant industry bring the desire to gain market share and defeat new competition in the industry. The seriousness of all such threats of new entrants is based on the competitive barriers to entry in every industry. The stricter these barriers to entry are, the more difficult it is for new players to enter the market and pose a threat to the existing operators.

Examples of barriers to entry include the need for economies of scale, high customer loyalty for existing organizations within the industry, the need for cumulative experience in the industry to succeed, stringent government policies, limited access to the common distribution channels in the industry and large capital requirements (which include huge spending on marketing and R&D for product development).

Threat of New Entrants in the Airline Industry

The threat of new entrants for the airline industry is said to be low to medium. New entrants have to go through a number of competitive financing and licensing requirements before they can set up their operations. It takes quite some time for new entrants to generate the upfront investment required for starting an airline company – just the process of purchasing or leasing aircrafts can be a significant dent in the pockets. Moreover, new entrants in the airline industry need to invest both, time and money in insurances, licenses, distribution channels and other policies that can be difficult to obtain permission for when you’re new in an industry – for instance, access to different flight routes.

Moreover, the existing players in every market have built customer loyalty and experience over time to not only offer better service levels, but also cut down on costs. Any new entrant in the airline industry will definitely lack these characteristics and expertise. This hence creates a divide or competitive disadvantage right from the start. A few factors like the liberalization of market access and the availability of external finance options and leasing deals from investors, banks and aircraft manufacturers have opened a few new doors to entry for newcomers.

Bargaining Power of Suppliers

This force specifically analyzes the bargaining power suppliers enjoy in a particular industry. The bargaining power of suppliers is measured through the ability and potential of suppliers to impact prices and quality in any given industry, which would eventually end up impacting the profitability of the industry.

Supplier power is determined through the concentration of suppliers in an industry, and the availability of alternative suppliers with the same expertise, quality and pricing methods. The fewer the number of suppliers, the more power they’re bound to have.

Businesses in any particular industry find themselves in a better position when there are a number of suppliers operating in the industry. Sources that influence supplier power also include the presence of substitutes in the market, the cost of switching suppliers, the strength of distribution channels adopted by suppliers and the uniqueness and value that a supplier creates through the products they supply.

Supplier Power in the Airline Industry

The bargaining power of suppliers in the airline industry is on the higher side. The airline industry isn’t based on the provisions of raw materials, but requires input in the form of fuel and aircrafts. Both these inputs are typically dictated by external factors that are out of the influence of operators in the airline industry. Aviation companies do not have control over these external factors.

The price of aviation fuel is subject to a number of fluctuations in the global oil market, which in turn is dictated by a number of geopolitical and other factors. The market for aircrafts, on the other hand, is dictated by only two major suppliers: Airbus and Boeing. Both Boeing and Airbus, hence, enjoy significant bargaining power and can dictate the prices and leasing agreement based on feasibility.

Bargaining Power of Buyers

The bargaining power of buyers is known as the market of outputs. The power of buyers analyzes the extent to which customers can put pressure on operators within an industry. This also impacts customer sensitivity to changes in price.

The customers usually enjoy a lot of bargaining power in two circumstances – firstly, when there aren’t many of them present and secondly, when they have plenty of alternatives to deal with. In the latter, it is easier for them to jump from one provider to another, without significant contemplation.

Buying power is considered to be low when customers in an industry purchase products in small quantities, when the products of one seller are different than those of the competitors’ and when customers act independently. The internet has given customers the ability to access relevant information, and has hence, made them more empowered and powerful. Customers can use the world of internet to compare prices online and to get access to a number of offers from other competitors and providers. Companies can reduce buyer power in the industry through loyalty programs and by differentiating their products and services from those in the market.

Buyer Power in Airline Industry

Bargaining power of buyers in the airline industry is considered to be on the higher side. Customers can check the prices of different providers and aviation companies online, through websites such as Expedia and Skyscanner. In addition, customers can easily switch between aviation companies, without incurring any switching costs.

Customers are also likely to choose different carriers while flying to and from their destination, as that can lower costs and output. Brand loyalty isn’t that high. Companies in the aviation industry are, however, trying to change this through flyer programs that reward customers for their loyalty. These programs can bring in customer loyalty and improve satisfaction from time to time.

Threat of Substitute Products

The existence of substitute products in an industry can increase the chances of customers switching from one alternative to another. These alternatives can conveniently be discovered by going beyond the similar products offered to operators in the industry. Organizations should consider every product that satisfies the same need of customers as competition to their services. Coffee brands such as Nespresso and Starbucks do not consider Redbulla direct competitor for their brands, however since customers satisfy the same need by drinking both,Redbull and coffee, the former can be considered a substitute product for coffee brands. Consumers can switch from one to another, if they feel that the prices in the other product are better, or if the experience of the other product is an upgrade on what they experience currently. The presence of substitute products can eventually hinder the profitability of an industry and diminish the attractiveness.

Threat of Substitute Products in the Airline Industry

With regards to the airline industry, it can easily be said that there are multiple substitutes available to customers looking to fulfill their general need to travel. Depending on the urgency and distance of their traveling journeys, customers can also go by car or train. This is a common concept in Asia, where more and more people are opting for Bullet and Maglev Trains, since they have cut down on the total time of traveling. Firms in the aviation industry might even consider Elon Musk’s Hyperloop concept as a close competitor as it will be able to take customers through a vacuum tube, reaching speeds of over 1200 km/h. The threat of substitutes within the airline industry is hence considered to be medium to high.

Rivalry Between Existing Brands

The last force discussed by Porter in his Five Forces is the rivalry between existing competitors in the industry. The intensity of the current competition in the marketplace is determined by the number of existing competitors currently operating in the market and what each competitor is capable of doing.

Rivalry between competitors is usually on the higher side when there are a number of competitors equal in both, size and power. Other factors influencing and increasing rivalry include slow growth in the industry and when customers can change brands without any cost repercussions.

The concentration ratio of an industry is a good way to determine the amount of competition in it. The lower this ratio is, the more intense the rivalry is bound to be within competitors. High competition, more often than not, signals toward price wars and other battles of the nature between competing brands. High barriers to exit make the rivalries even more competitive, as organizations remain in the industry and compete with each other, even when their profit margins are declining.

Rivalry Between Existing Brands in the Airline Industry

A single look at the airline industry in the United States can determine that rivalry between competitors is on the higher side. The industry is extremely competitive, because of a number of reasons including tight regulation of the industry, the paramount importance of safety leading to an increase in fixed costs, higher barriers to exit, the stagnant growth potential and the entry of low cost carriers to the industry.

Customers also have to incur no costs when switching airlines, as many players in this industry are known to be similar in size. The competition between these equally matched firms can be fierce at times, leading to a highly competitive environment.

Porter’s five forces act as the guiding principle toanalyzr the competitive
environment of any industry and determine where your business currently stands and what can be done to improve its position in the nearby future.

The collective strength of all these forces together helps determine the profit potential of an industry and what it means to the average business. If all of these five forces are intense, as is the case with the airline industry, then almost no company in the industry will be able to earn attractive returns on their investment. However, if the forces are mild, like is the case of the soft drink industry, then there is significant room for higher returns and interest rates.

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Chapter 7: SWOT Analysis

Businesses often want a thorough analysis of their strengths and weaknesses to determine their readability for future moves and growth patterns. Before embarking on future motives, it is highly necessary for businesses to perform an in-depth SWOT analysis that covers all areas impacting your business. No growth plan is possible without a SWOT analysis to make it simpler and more comprehensive.

A SWOT analysis is the first step in the growth process and helps businesses achieve a crystal-clear view on what should be addressed first and the glaring errors that should be removed. We look at the SWOT analysis in greater detail in this chapter. The analysis studies the strengths, weaknesses, opportunities and threats of an organization.

The SWOT analysis is the perfect way for organizations to recognize the problems they should address first. The SWOT analysis can also give organizations an idea of what they should prioritize and the goals they should set for their brand. An understanding of the current strengths and weaknesses with future threats and opportunities can help businesses evaluate their current standing and also set their objectives in a detailed manner.

What Is a SWOT Analysis?

While we already expect you to know the basics, SWOT Analysis is an analysis tool that helps asses four of the key aspects of your business; Strengths, Weaknesses, Opportunities and Threats.

Businesses today can use SWOT Analysis to determine their current standing and to get an idea of future growth potential. Better still, organizations and managers can use the platform to craft actionable strategies for the future that help distinguish them from the competitors in the industry.

Performing a SWOT Analysis

A SWOT analysis can be done by first understanding the acronyms and what they specifically mean, and then drafting up a matrix chart for the analysis. The chart should look as follows:

The figure above shows what the matrix for a SWOT analysis should look like. If you’re performing an analysis in your organization, you can use this template and fill in the boxes to write about the different points you feel go in the separate boxes. The acronyms are studied in greater detail below:

Strengths

Strengths are all the things that your organization does particularly well, or better than the competition in your market. In a way, your strengths should distinguish you from your competition and make you stand out as a quality provider. When you’re thinking of strengths, it is nice to brainstorm and think of all the advantages that your organization has over other organizations in the industry. These advantages can work as factors to motivate your staff forward. The factors can include better staff skill set, better managerial expertise, strong set of manufacturing processes, use of quality supplies and materials among much more.

Your strengths are an integral part of your overall organization, so your focus should be on understanding what helps your organization move forward. What is it that you do better than anyone else in the market? What are the values that drive your business forward? What are the unique strategies and resources you use that others in the industry haven’t yet caught up with? As part of the procedure, it is also recommended to identify and analyze the Unique Selling Proposition or USP of your organization.

It is also nice to turn your perspective around and determine what your competitors or customers might view as your strengths. Looking from the competitor’s perspective can be really handy here, as it helps determine factors that make them think you’re ahead of them.

Remember, that an aspect of your organization can only be marked as a strength if it gives you a clear advantage over the other competing brands in the market. For instance, if your organization uses high-quality manufacturing processes, then it will only be considered a strength if other providers use inferior processes. If your competition uses the same quality production processes, then it isn’t a strength, but a necessity of sorts.

Weaknesses

A SWOT analysis can only be valuable if it is able to gather all the information related to your organization, be it strengths or weaknesses. Most organizations and managers can be biased when jotting down weaknesses, which can ultimately reduce the efficacy of the analysis as a whole. Honesty is required here, as you should mention all weaknesses you feel stand true for your business. Discuss the elephants in the room and talk of all weaknesses that you feel are unpleasant to handle or haven’t been brought up yet.

Weaknesses, similar to strengths, are inherent features found within organizations. As part of these weaknesses, you should focus on the inherent features of your organization and the people, resources, procedures and systems involved in your workplace. Think about all the areas of your workplace that you would like to improve and the sort of practices you should realistically avoid to improve these areas.

Once again, you should try to view your organization from a competitor’s perspective. A competitor’s perspective will help determine the areas that need reworking. Your competitors possibly view weaknesses that you could be blind to. Also, take time to set benchmarks and understand where your competitors are doing better. Areas where you’re underperforming are basically your weaknesses.

Opportunities

Opportunities are all chances and openings that signal some positive event is about to take place. Opportunities are an important part of the SWOT analysis, as they help determine the future feasibility of your organization. Organizations need to monitor opportunities in a consistent manner to gather some fruit for them and to ensure that they reap the results that organizations expect from them.

Opportunities usually come from situations or scenarios outside of your business. They also require managers to consistently keep an eye out for what the future might serve them. Most opportunities come in the form of greater selling opportunities in the market you serve or in the technology that most brands use. The ability to spot and exploit opportunities for results is what really helps businesses stand out in the market today. It can help achieve an organization’s overall competitive advantage and can also help them take the lead within their market.

Start the brainstorming process here by thinking of good opportunities that are easy to spot. These opportunities don’t need to be real game changers. Instead, you can mention small opportunities as well, with potential to significantly improve your competitive advantages in the long run. What interesting market trends are you currently aware of, which can have an impact on your profitability? Other external factors such as changes in population profiles, social patterns and government policies should also be monitored here to determine what your opportunities are.

Threats

Threats operate as the opposite of opportunities, and include almost anything that can negatively impact your business from the outside. This will include problems such as shifts in the market demand curve, problems in the supply chain, shortage of talent in the market and an unfavorable change in government policies among many. It is extremely vital for organizations to anticipate threats before they happen and take whatever evasive action they can to minimize the impact of these threats.

Change is by far the only constant in the world of business, and if you’re not adapting to new technologies and production practices, then your growth will eventually stall and you will fall prey to the innovation in the market. The ever evolving technology standards around us are an ever-present threat, which require organizations to continuously update their processes for the better.

The best way to identify threats is through the evasive action your competitors are taking and the challenges they’re prepared for. However, do realize that the measures they’re taking might not be right or justified for you. Do not directly copy them without understanding the unique requirements of your business and what you’re required to do in a situation of this nature. Always keep an eye on external challenges related to finance, as financial challenges often bring forth the biggest threats and roadblocks organizational progress.

Do you have cash flow or bad-debt problems? These are the most common problems facing organizations today and often lead to financial constraints that are tough to recover from.

Steps to Creating Your Best SWOT

The SW part or the strengths and weaknesses of your SWOT analysis are related to the internal operations of your business, while the OT part or opportunities and threats relate to the external part of your analysis. Hence, populating the list for strengths and weaknesses will require a basic understanding of your resources, processes and products, while listing down opportunities and threats would require an understanding of the wider market, along with changes in legislation, technology, society and competitor practices in general.

Some tips that can help you seamlessly perform your SWOT analysis include:

Always Start with Your Strengths

Always start by brainstorming the strengths and your business and building a complete and detailed list of what you feel are your strengths. In your first draft, place as many strengths as you possibly can. You will be refining this list later down the line. Make sure that you’ve factored in for each and every process and department within your business while mentioning these strengths. Don’t leave anything out.

Example Generic Strength Areas:

• Brand recognition / value
• Supplier relationships
• Product feature set
• Skills
• Experience
• Client relationships

Helpful Questions

Some helpful questions that can help you write down your strengths include:

• What are the backgrounds of your employees?
• How have you responded to market changes?
• What has been particularly successful for you and why?
• What’s your sale USP?
• Why will/do clients pick you over the alternatives?
• What are the owner profiles?

Once you have devised the list for your strengths, it is time to revisit it and refine it further. The refining process should include removing duplicates, ensuring all strengths are an accurate representation of your business and making sure that you are specific with your strengths. A good SWOT analysis will have a decent list of strengths, but wouldn’t be overwhelming with a huge amount of strengths, half of which are generic. Take a step back to evaluate each of your strengths in detail and make sure that you follow the advice we mentioned above. Only include strengths you feel help you stand out in the market or give you a competitive edge over the rest. Processes and other activities that you feel are strengths, and are also being followed by other operators in the industry, aren’t strengths but necessities for your organization.

Focus on Weaknesses

Now that you have your strengths mentioned in detail, it is time you turned your focus toward weaknesses of the business. The process for listing down your weaknesses is a mirror image of the process for listing down your strengths, which is why if you’ve been through the latter, this shouldn’t bother you.

As you did while writing down your strengths, it is necessary that you look at the capabilities of your business, discuss the resources you have at your disposal and study the overall offering to the market. It is necessary that you weave out facts from emotion and keep your SWOT unemotional and factual.

Example Generic Weakness Areas:

• Single point of failures
• Speed of response
• Delivery quality
• Location
• Product lifecycle
• Skill sets

Helpful Questions to Ask Here

• Look at some of your customer complaints – what happened and why?
• Where does it cost money to run the business?
• How many clients have you churned, if so why?
• What is the level of your industry expertise in the business?
• What’s your staff training plan?

Involve Your Employees

You might not recognize, but your employees know more about your business than you do.

Some of the areas where your employees can help you include:

• Latest news in your sector
• Any competitive activity your aware of
• Employee feedback
• Current client relationships
• Example good case studies of sales and service
• Example bad case studies of sales and service

Besides the cases mentioned here, employees are particularly constructive in how they view strengths and weaknesses. To further enhance the neutrality of the process, you can have employees send anonymous responses to what they feel are the strengths and weakness of the firm.

Take Action

Once you have fully drafted your SWOT analysis, it is necessary that you come up with the key points of action to actualize the progress you have made during the analysis. You will be surprised to know just how often organizations spend resources on performing a SWOT analysis, but don’t actually work on the results to get the progress they require.

The following actions should always be done after conducting a SWOT analysis:

Implement Quick Wins

There will always be quick wins that you can note and work on from your SWOT analysis. These quick wins come in the form of weaknesses that can effortlessly be removed from the production processes or could give you opportunities which you can rapidly take advantage of without any additional changes.

Long-Term

While the short-term potential of the SWOT analysis does sound exciting, it is actually the long-term feasibility of the process that lures businesses toward it. The longer term actions will always be focused on mitigating the threats you outlined and on taking advantage of opportunities. Most of what you’ve outlined in your threats and opportunities requires long term attention.

What’s interesting is that you can always reuse your current SWOT analysis for additional analysis as well. The SWOT analysis you have performed currently in your organization can be used in two cases:

• As a foundation for all future SWOT analysis. Whenever you perform another SWOT analysis in the future, you can re-use the template and start over.

• SWOTs can also be useful in your competitor analysis, as they give you a full guide of the processes you follow and how they compare to competitors.

Chapter 8 Root Cause Analysis

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Business analysis methods, as tricky as they may sound, can often be understood through real life examples related to them. The simplest and by far the easiest way to understand root cause analysis is to think of it through the outlook of common everyday problems. Imagine you’re sick and throwing up at your workplace, the best thing to do is head over to a doctor and find out the root cause behind your sickness. If your car stops working all of a sudden or develops a problem, the best course of action would be to head over to a mechanic and have them inspect the vehicle to unearth the root cause of the problem.

In both cases above, an expert with an understanding of problems in the relevant niches will help direct you to the root cause of the problem in your body or in your car. Similarly, if your business is not performing in the manner you want, a root cause analysis will find the primary reason behind the dip in performance and provide solutions to it.

For each of the daily life problems we have outlined above, you can easily find a solution to treat the symptoms and mitigate the impact. When you are continuously throwing up at work, you can take a day off and stay at home with a bucket close to you. For a problematic car, the best alternative would be to find a bus and leave the car at home. These solutions or alternatives, however, only provide a solution to the symptoms of the problem and do not delve deep down into what actually caused the problem, or the underlying reason behind those symptoms – these symptoms could either be a stomach infection because of the new Indian restaurant you tried last night or a broken alternator in your car. A root cause problem goes into the depth of the problem and not only analyzes it, but also finds ways to fix it.

In this chapter we will not only look at what root cause analysis means but will also walk you through common techniques and methodologies for the analysis, along with a few relevant examples where necessary.

What Is Root Cause Analysis?

While the analogies above might have already built your understanding of the subject matter, it is necessary to study what a Root Cause Analysis is in its literal terms. Root Cause Analysis or RCA is the elaborate process of discovering the root causebehind a specific problem in the processes of your organization. The process helps identify appropriate solutions. RCA assumes that it is better and much more effective for businesses to identify and solve underlying issues rather than just treating the symptoms and looking for ad hoc solutions.

Root cause analysis is not easy to perform and requires a collection of techniques, methodologies and principles. All of these solutions come together to help in the identification of the root cause behind a problem. RCA allows businesses to go beyond the superficial cause on paper and find the actual reason behind problems in the supply chain.

Goals and Benefits

The first goal of root cause analysis is to discover the real reason behind a problem or an event. Businesses face all kinds of problems in their day-to-day operations, and root cause analysis can help identify the reasons that lead to these problems.

The second goal of root cause analysis is to fully understand the process of fixing the underlying issues or the root cause of the problem. The real reasons behind major issues are often neglected in the immediate relief strategy, which is why it is beneficial for organizations to actually focus on building a mitigating strategy based on actual facts.

The final goal of root cause analysis is to apply the information gained from this experience to put an end to all future issues of a similar nature. Root cause analysis can point out significant problems in different processes and the real reason behind them. This helps organizations putan end to whatever problems they might face in the future, which can limit their performance.

The root cause analysis can only be as good as what you do with it. All of these three goals are extremely important as they build the foundation for not only current success, but also future success without any significant downtime. The results of a root cause analysis can also be used to modify all current processes in such a way that future problems are averted or limited. Instead of just treating workers who suffer injuries in complicated manufacturing processes, a root cause analysis might suggest wearing precautionary equipment to reduce further injuries and concussions in the future.

Take individual problems one step at a time and solve them for issues. Solving a large number of problems might look effective, but without a real diagnosis in place, the process will be as ineffective as can be. The same problem will pop up again and lead to additional downtime time and time again. For instance, an editor can teach all her writers how to use the Oxford comma in future assignments, rather than fixing every single instance of an omitted Oxford comma.

Core Principles

An effective and successful root cause analysis is guided by a number of core principles. Some of these principles are already apparent; whereas others will help you perform the analysis in a more effective manner.

Not only do these principles host the potential to boost the quality of analysisbut will also help gather trust from partners, clients and other stakeholders. These principles include:

• Focusing on correcting and remedying the root cause of the problem rather than just the symptoms causing it.

• Not ignoring the importance of treating symptoms in the moment for short term relief. Organizations perform a root cause analysis without treating immediate symptoms. This can lead to a lack of effective results and a significant increase in the downtime suffered during the process.

• Realizing that the issues witnessed by your organization can have multiple root causes, and not just one single root cause. Issues that come with multiple root causes require expert mitigation and diligence of the highest order.

• Focusing on the how and why of the problem, rather than just onwho was responsible for it. The how and why will help you find out the actual cause rather than just running a blame game without any legitimate proof.

• Being methodical in the approach that you follow and finding a concrete cause for the issue and not just the first cause that pops up in your mind. The cause you find should come with effective evidence to back up the claims that you have in mind.

• Providing enough evidence and information to inform and plan a corrective course of action for the future. This is an important part of the process and shouldn’t be neglected.

• Considering how the root cause popped up and coming up with a prevention strategy for the future. Work on the impact of the root cause and ensure that you are taking steps to minimize the damage of the root cause on current work processes and also the damage it can inflict on your resources if it pops up anytime in the foreseeable future.

As is evident with the principles we have illustrated above, it is important that you take a comprehensive and holistic approach to the process when analyzing deep causes and issues. In addition to just discovering the root cause behind an event, organizations should also look to form a strategy for future remediation.

Cause and Effect Fishbone Diagram

A good way to approach the root cause analysis is through a cause and effect fishbone diagram or an Ishikawa diagram as it is also called. The process can help visually map out the issues you face in your organization and can help come up with the root causes behind those issues.

Typically, you will start by drawing the basic skeleton of a fish and starting from the middle of the diagram. Write down the problem you’re facing in the middle of the diagram and then place off-shooting branches from the rib bones of the skeleton. The off-shooting branches should contain the most common processes deemed responsible for the issues. The categories and processes outlined in the initiating branches are then broken down into smaller parts. For instance, if you identified ‘People’ as a problematic category, you could further break it down into ‘Training’, ‘Staffing’ or ‘Leadership’.

As you dig deeper into the problems facing the organization, you will slowly and gradually get closer to the actual source of the problem you’re facing and the problem that was initially highlighted in the statement. You can use the fishbone diagram to cancel out unrelated categories and reach the root cause easily. To make the fishbone diagram even simpler, it is necessary that you consider your categories and have a brief idea in mind, before you actually put your thoughts on paper. Without a definite idea of the categories to use, you will end up creating a mess on the diagram, without any direction. Some common categories you should consider in your fishbone diagram are outlined in the section below.

Common Categories to Consider in a Fishbone Diagram:

• Machine (equipment, technology)

• Method (process)

• Material (includes raw material, consumables, and information)

• Human/mind power (physical or knowledge work)

• Measurement (inspection)

• Mission (purpose, expectation)

• Management / money power (leadership)

• Maintenance

• Product (or service)

• Price

• Promotion (marketing)

• Processes (systems)

• People (personnel)

• Physical evidence

• Performance

• Surroundings (place, environment)

• Suppliers

• Skills of the employees in the workplace

Tips to Effectively Perform a Root Cause Analysis

The root cause analysis or RCA process is all about asking questions and getting as close as you possibly can to the root cause of a given problem. The more you can drill down your options, the more likely you are to find the root cause of the problem. Once you are sure you’ve identified the root cause of the problem and not just another symptom that is caused by the root cause, you can go on to finalizing processes for future mitigation.

Work with a Team and Have Fresh Eyes On-Board

Whether it is a whole team of colleagues or just a partner to help you through the project, any extra pair of eyes will help you get to the solution faster than the time it will take if you’re working alone. An extra pair of eyes will also work as a check against biases and will kill the biased nature you might add to the analysis. Getting input from other team members can also help challenge whatever assumptions we have and look at things from a unique perspective.

Running our conclusions through a team can also ensure that we’re well aware of the solutions that need to be implemented and have multiple people chipping in with what they find best.

Plan for Future Root Cause Analysis

This is highly necessary to put an end to future delays in the RCA process. When performing a root cause analysis, it is important to be aware of how the process pans out. Take notes during the process, ask questions related to the process itself and answer them for other workers in your organization to be aware of in the future. Also, try to find the benefits and techniques that work best for your organization in the future.

Find Root Cause of Successes As Well

Root cause analysis can be a good way to findthe processes that played an integral role in the business’s success as well. Perform root cause analysis when you’ve had a successful growth period as well and find the reasons that eventually led to it.

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Chapter 9 VMOST Analysis

V-MOST analysis is based on a tool of sorts that helps you determine whether all your business activities and objectives are aligned with your business’s growth strategy. Alignment is a key factor in determining the success of a business and the achievement of strategic growth objectives set for the future. Most businesses work hard to achieve their objectives and strategies, but are unable to do so due to a lack of alignment in processes and their other objectives.

What Is VMOST Analysis?

V-MOST analysis is based on a tool of sorts that helps you determine whether all your business activities and objectives are aligned with your business’s growth strategy. The main benefit of this analysis is breaking down the core components of a strategy into an easily readable format for everyone to understand. The new format is easy to consume for everyone involved.

VMOST stands for:

• Vision

• Mission

• Objectives

• Strategy

• Tactics

Presenting a strategy in the simple format of a VMOST analysis can help businesses understand and identify areas in the organization that aren’t aligned in a format that they would like for future growth. The process also determines where future objectives fit in the organization and the role they play in strategic planning and growth.

What Is the Difference Between VMOST Analysis and MOST Analysis?

The VMOST analysis is an upgrade on the MOST Analysis, which is another tool used by businesses to evaluate the alignment of their strategies and objectives. The difference can easily be understood through the acronyms for both these analyses. VMOST is an upgrade on MOST because it incorporates the Vision statement within the analysis process as well, while MOST does not. Apart from this minor difference, both these analysis are almost the same.

What Is VMOST Analysis Used For?

VMOST Analysis is used to:

• Communicate a strategy

• Get feedback on strategic plans

• Check the alignment of business units

• Structure a strategic plan

A VMOST analysis is also used to devise and strategize new objectives for the future. The analysis can also be used to:

• Define new strategies

• Test out new strategies

How to Perform a VMOST Analysis

The process for performing and completing a VMOST Analysis is simple and does not contain any unnecessary hassle or regulations. If done without any delays, the analysis will not take you much time. VMOST analyses can be incorporated at multiple levels of the organization and the analysis is broken down into the following steps:

Prepare and Research

The very first step in the analysis process is to prepare and research. It is necessary for the team to be fully aware of the impact this strategy can have on you. Start with a SWOT Analysis or a Five Forces analysis to get a wider view.

Develop a Vision

You need to start with the V to develop a Vision statement for your organization. Your Vision statement is a sentence that inspires your team, engages your stakeholders, describes the future of your organization and spearheads your very existence. You can look at your competitor’s vision statement for direction and guidance.

Develop a Mission Statement

The second acronym or M in VMOST stands for Mission. Hence, the next logical step is to devise a mission statement. The mission statement explains the processes and steps you plan to follow to achieve the vision. These are both connected.

Develop Objectives

With the vision and mission done, you move to the more daunting and specific task of setting objectives. These are large items you wish to achieve, related to growth or other business categories. Objectives are usually big and bold and should have a definitive timeline.

Develop Strategies

As far as naming conventions go, this process can be confusing. The S in VMOST stands for Strategies, but aren’t you already working on strategies to begin with? It is best to consider your strategies as the smaller decisions and objectives you set in order to achieve your overall objectives.

So, if you have a strategic vision of reaching more markets, you can set minor strategies of adding new customers by a certain date. This could be done by developing new partner channels or by offering seasonal promotions to customers. Both of these techniques can come in handy to support the customer growth objective you have in mind. To clear your naming conventions, you can even refer to these strategies as initiatives.

Develop Tactics

This is the last process in the VMOST analysis and includes a detailed implementation of the strategies or initiatives you set earlier. Begin the process of developing tactics by listing down all your strategies and going through each one of them in detail. Identify what you need to do to turn that strategy into a reality. This process should also include details that you might have missed out on earlier.

For instance, we can consider the example of a software company which has set international growth as a strategy for future Financial Growth. To achieve this initiative or strategy, the software company can set the following tactics:

• Develop a new language version of their software
• Translate sales collateral
• Develop new case studies
• Open office in a selected country
• Hire teams

Tactics can either be individual tasks or smaller projects. You can prioritize them on the basis of whatever sounds best to you and your team.

Review

Once you conclude your VMOST analysis, it is time you sit and review the process for any minor errors you might have encountered. The review process should include the following:

• Do the tactics at the bottom of the VMOST line up with the ultimate vision at the top?

• Is any part of your current flow broken or missing from the strategy?

• If all of your tactics are completed, will the strategies be finished in time?

• Once you achieve all strategies or initiatives, will you be able to finish the objectives in time as well?

• Can you achieve your mission through your objectives and your vision through the mission itself?

Once your objectives and strategies have been aligned with your business processes, you can consider the alignment done. The VMOST Analysis is best performed for individual strategies to evaluate the alignment of each strategy separately.

Advantages and Disadvantages of VMOST Analysis

The VMOST Analysis comes with a number of advantages and disadvantages that make the process simpler or more complicated.

The advantages of VMOST Analysis are:

• Teams using it all understand the direction and focus

• Misalignment becomes clearer and so can be removed

• A clean and simple structure to follow

• It can be helpful when communicating strategy

On the contrary, there are also a few disadvantages of VMOST Analysis which can create a problem for firms:

• The analysis requires tools and instructions to be considered successful

• There is no formal or accurate scoring method to help organizations determine the right strategy or the right growth approach. Without the right approach, firms are limited in choice.

Tools That Work for V-MOST Analysis

Since the VMOST Analysis is usually used to map out strategies, there are a number of tools that can prove to be handy while using it. The process should start with a strategic discussion of your options based on the Ansoff Matrix for generating ideas. Businesses should also use the SFA Matrix to help score their potential strategic plans for future growth and success.

Regardless of whether you’re using V-MOST for future growth or just a routine checkup, you should run it concurrently with other tools to help you understand the wider business environment and our growth potential. The SWOT Analysis can help you determine both, the internal and external environment of your business, and come up with ways for strategic success with VMOST Analysis. The external market can also be better understood through the use of PESTLE analysis or Porter’s Five Forces.

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Chapter 10: Pareto Principle

The Pareto Principle was originally coined for the Italian market, where it meant to identify how 80 percent of the wealth in Italy was owned by only 20 percent of the population. Ever since this observation was made, the Pareto Principle has become a guiding light for businesses and individuals to increase efficiency and improve operations.

To speak in more general terms, the Pareto Principle is an observation of sorts, not a law, which points out that many things in life are distributed in an uneven manner. This principle can mean any of these things:

• 20 percent of the input in your organization is responsible for 80 percent of the output

• 20 percent of your employees work to produce 80 percent of the results

• 20 percent of all customers are responsible for 80 percent of the revenue

• 20 percent of the bugs in your systems cause 80 percent of the crashes

• 20 percent of the features in your web app are responsible for 80 percent of usage
And so on…

The first common misconception about the Pareto Principle is that the numbers 20 and 80 should total to be 100. This isn’t a must. 20 percent of the workers could create 50 percent of the result or 60 percent or even 100 percent of the results. Imagine a workplace where 20 percent of the employees do all the hard work, while the others goof off. In that case, the 20 percent would be responsible for generating 100 percent of the result.

The numbers do not have to be exactly 20 percent or 80 percent. However, the Pareto Principle is all about identifying that most things in life aren’t distributed or balanced equally – some factors contribute more than others and business analysts can benefit from factors that do, which can eventually increase their understanding of the business.

In a perfect world, managers and organizations would want everyone to work evenly and contribute equally to the resources of the organization. Every bug would be equally important, every customer would buy the same amount of goods and every feature on the website would be loved. But since this isn’t the case and most things in life are rather unfairly divided, businesses have to come up with alternative strategies for managing and assessing team performance.

How Is This Useful?

The Pareto Principle helps organizations realize that a majority of their results come from a minority of the inputs they have in a process. Continuing the examples from above, if:

• 20 percent of the input in your organization is responsible for 80 percent of the output – then you should focus on the 20 percent that matters and help remove inefficiencies.

• 20 percent of your employees work to produce 80 percent of the results – then you should focus on the 20 percent of all employees that are working hard and remove inefficiencies.

• 20 percent of all customers are responsible for 80 percent of the revenue – In this case you should find customers that buy in bulk and improve the quality of all operations you offer to these customers.

• 20 percent of the bugs in your systems cause 80 percent of the crashes – This again simplifies management as it notifies that 20 percent of the bugs cause 80 percent of all crashes in the workplace.

• 20 percent of the features on your web app are responsible for 80 percent of the usage – Focus on the features your customers like and improve them further for better results.

The examples could go on and on, with the point being that you can focus your efforts on the 20 percent that is actually making a difference rather than focusing too much on the rest of the 80 percent that doesn’t add much. In economic terms, this is known as the diminishing marginal benefit.

How the Pareto Principle Helps Businesses

The Pareto Principle, as we studied earlier, originates from the world of economics in Italy and was named after Vilfredo Pareto, the Italian economist. Pareto observed back in 1906 that 80 percent of all land in the state of Italy was owned by around 20 percent of the total population. Pareto expressed this observation in a mathematical formula that is now known as the 80/20 rule, which is also known as the vital few and trivial many.

The Pareto Principle might appear irrelevant to many businesses at face value, but is an important part of improving efficiency and getting the results you require.

Increased Productivity

The Pareto Principle can be really handy in determining the areas you should focus your efforts on and the resources that you should prioritize in order to achieve the efficiency and results you require.

Companies and managers can utilize the 80/20 rule to focus on the critical 20 percent of all tasks that will produce 80 percent of the results. The percentages, as we mentioned earlier, can change based on the given scenario in different firms, but the fact of the matter is that Pareto’s Principle teaches managers to not waste time on the trivial many, but instead, focus on the vital few that are responsible for producing efficient results.

The Pareto Principle can also be used to recognize signs of unproductiveness in the business. Areas that need improvements can be highlighted here for better results. Common reasons behind a lack of productivity in the workplace today include unskilled workers new to the field, social media distractions and an unsuitable work environment.

Increased Profitability

The sales industry has recognized the idea that 20 percent of their salespeople are responsible for 80 percent of the revenue that is generated. Based on the training level of your staff and the objectives you have for your business, you can identify whether the Pareto Principle should be utilized to influence your efforts and focus on the 20 percent that are working their skin off or on the other 80 percent that are goofing around and not meeting targets. Different techniques will have to be implemented when working on these disparate groups.

The Pareto Principle also highlights that a small group of your customers produce the majority of your sales. Hence, identifying these sales opportunities and the groups responsible for most output can really help improve profitability.

Website Optimization

A standard overview of your business’s website will indicate that 80 percent of all traffic comes on 20 percent of the web pages. 20 percent of all pages attracting most views and user attention are critical pages that should usually be on your radar. This allows your digital endeavors to progress at a faster rate without any interruptions.

A Pareto chart can help organizations not only identify problems, but also come up with outcomes to a given situations. Appropriate action should be taken where the need be, and organizations can put their focus on areas that matter.

The Pareto Principle is not a strategy to eliminate all non-critical processes and factors in a given situation; rather, it should be considered an idea that helps you put focus where it’s due and yield great results from better focus and strategizing.

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Chapter 11: Appraising Future Investments

Most organizations follow up their business evaluation and review process with a thorough investment appraisal that entails a number of detailed steps. Capital investment is a significant activity for most organizations today. Not only is the process of investing in growth or future capabilities really extensive, but it also requires large investments into machinery, building, motor vehicles and IT equipment among a number of things.

These investments are made with the anticipation of future long-term benefits. Businesses recognize that investments made today will reap benefits in the future and help them grow further. There is also a significant element of risk involved in the process, which needs to be countered and analyzed in due time before the investment appraisal process.

To ensure that the best financial decisions are taken and that risk is minimized, businesses usually enter an investment appraisal process. The investment appraisal process acts as a process of due diligence that safeguards the interests of businesses and their owners at the time of the initial review.

Identifying Opportunities

For investment appraisals to be successful, businesses need to identify and set a culture that facilitates the identification of potentially profitable investments in the organization. Businesses should run evaluations regularly, using the techniques we outlined earlier, to develop investment opportunities and to capitalize on opportunities to grow further. Any ideas generated at this stage should fit within the overall strategy of the business or follow the VMOST standards discussed above.

Why Do Organizations Invest?

Generally, businesses invest in different projects and plans to increase their profits, to achieve growth or to signal improvements in their operations. Supply should always match demand, which is why organizations invest in opportunities from time to time. Capital investments in an organization can also be related to reducing manufacturing costs and increasing productivity costs within the organization.

In Not-for-Profit organizations, the investment process is driven by the need to become more efficient and effective in core operations. Investments targeting growth potential help organizations open new doors and become more profitable or efficient.

As part of their due diligence before the investment process, organizations need to know whether the investment process will yield any benefits or not. This is done through proposals and appraisal processes for each investment opportunity.

Investment Proposals

All details related to an investment should be brought together and discussed whenever an investment is proposed. This is something that usually falls under the finance department or the accountant’s role. The amount of information required here varies according to the type and details of the investment. Fewer details are likely to be discussed and brought to the table when discussing more routine investment decisions, like replacing cars for all members of the sales team. These are routine capital investments and the appraisal process for them isn’t as in-depth as it will be for bigger projects.

Other investments signaled toward the growth of the organization will require in-depth appraisals with a focus on providing and mentioning as much information as is possible. Clear objectives should be outlined so that there is a clear understanding within the business of what is required and what should be achieved. It is also necessary for all alternatives to be discussed and documented during the appraisal process for bigger projects. The presence of alternatives can help in a proper appraisal, with the concept of opportunity cost at the core as well. Different projects and alternatives can be put on the table and a conclusion can be reached as to which one works best for the business.

Information related to the risks involved, the assumptions made about future progress, the likely impact this investment will have on cash flows and how the investment fits into the overall strategy of the organization should be discussed in detail. Input from the management related to the managerial aspects of the investment should also be recorded.

Once the organization and management team have gathered all information and evaluated it, the information should be presented to the final decision makers of the organization. It is here that the investment process is modified, approved or rejected by the higher ups. In a small-scale business, the approval process is usually managed by the owner themselves. The process in larger organizations with bigger investment decisions is a bit more detailed and has multiple processes in place for approval. Managers in larger organizations are aware of the level of authority they host and take investment decisions based on approval from higher-ups and the appraisal carried out by the organization. A formal sign-off process can reduce poor proposals from being passed and increase the efficiency businesses experience due to their investment decisions.

Financial Analysis

There are a number of appraisal and financial techniques in place to assess the financial terms of an investment proposal. These methods of evaluation and analysis are based on the projected future cash flows that investments would be able to generate for the organization. The processes and investment appraisal techniques used here include:

• Payback Period: The payback period calculates the number of years it will take for the business to recover the original amount that was invested in the plan.

• Accounting Rate of Return: Accounting Rate of Return or ARR calculates the return from the project as a percentage of the capital that is employed in it.

• Net Present Value: Net Present Value is a discounted technique used to convert all future earnings through the project into current day cash equivalents. The NPV of a project can vary based on predictions related to the discount rate.

• Discounted Payback: Discounted payback is similar to the payback period, only that the cash flows considered in this method are discounted before the actual payback period is found out.

• Internal Rate of Return (IRR): The Internal Rate of Return or IRR of a project is determined by calculating the appropriate discount rate of the product. The IRR is the discount rate at which an NPV of zero will be recorded.

We discuss these techniques of investment appraisal in greater detail within the section below for better inference and comprehension.

Most organizations use multiple methods to appraise their investment decisions and to find the suitability of these investment decisions for future plans. Different methods tend to give different results, which is why managers and financial analysts should carefully go through the numbers and account for results generated through each technique before reaching a conclusion.

Payback Period

The payback period calculates the number of years it will take for the business to recover the original amount that is invested in the plan. This is the simplest of all investment appraisal techniques and works by just calculating the total length of time it will take for the investment to be paid back in full. This can either happen through additional revenue streams or the expenses saved as a result of the savings made. In either case, the cash flow is concerned with the primary purpose of the investment whether it is related to adding profitability or adding efficiency and decreasing production costs.

If you have multiple investment proposals to choose from, then the one with the shortest payback period should definitely be prioritized because of how it earns more in a shorter period of time.

While the payback period is simple and easy to understand for non-financial managers, it also carries a few weaknesses, including:

• The payback period encourages short-term investments that pay back the total invested sum faster than other bigger investments that take longer to pay back the initial amount but are more profitable in the long run.

• This period does not prioritize the time value of money and discount rates.

Accounting Rate of Return

Accounting Rate of Return or ARR calculates the return from the project as a percentage of the capital that is employed in it. In short, the ARR compares the profit generated by the investment to the initial cost.

ARR is calculated through the simple accounting formula below:

ARR = Average Annual Return or Annual Profit from Investment – the Initial cost of Investment

As per the ARR method of investment appraisal, an investment that produces a higher return after subtracting the initial cost of the investment should be preferred. While ARR is simple and can give a good picture of the future, it does carry a few weaknesses as well. These include:

• ARR completely disregards the time value of money and future discount rates.

• Accounting conventions like depreciation are often manipulated here for better results.

• The ARR is purely based on accounting profit and not on cash flow, which is the actual lifeline for most businesses.

Net Present Value

Net Present Value is a discounted technique used to convert all future earnings through the project into current day cash equivalents. The NPV of a project can vary based on predictions related to the discount rate.

NPV or net present value allows businesses the ability to take more informed decisions, while accounting for the concepts of time value of money. The Net Present Value is calculated through cash inflows and outflows. As per the time value of money, $1 gained today is a lot more valuable than $1 gained in the future, because the $1 gained today can be invested elsewhere to earn interest.

The accounting formula for calculating PV or present value is:

PV = Sum of all cash flows over n years – C (1+i) n

Where:

i = interest rate
n = number of years
C = the cost of investment in year 0

Due to this method of appraisal, cash flows are less prone to manipulation and can easily be calculated. Some weaknesses of this method include:

• Cash timings are difficult to predict

• The data provided at the start of the project and the cash flow generated during it can vary

• It is inflexible, as a single rate is used through the life of the project

Discounted Cash flow

Discounted payback or cash flow is similar to the payback period, only that the cash flows considered in this method are discounted before the actual payback period is found out.

The discounted cash flow is used for calculating the NPV as well, which is why it can directly be extracted from it. The results achieved through the discounted cash flow also assist in the calculation of IRR or internal rate of return, which is next on the list.

The discounted cash flow or payback period minimizes the flaws of the simple payback period mechanism we used earlier. Cash flow predictions from the investment are discounted and are calculated in present value before a decision is made.

Internal Rate of Return (IRR)

The Internal Rate of Return or IRR of a project is determined by calculating the appropriate discount rate of the product. The IRR is the discount rate at which an NPV of zero will be recorded.

The Internal Rate of Return is calculated by setting the PV to zero in the formula below:

PV = Sum of all cash flows over n years – C (1+i) n

Where:

i = interest rate
n = number of years
C = the cost of investment in year 0

IRR can be used as a tool for investment appraisal when the rate at which funding for an investment is known. In such cases, the project is considered viable and productive if the rate for the investment or the project at hand exceeds the rate at which the funding for the project is provided.

Implementation and Review

While these investment appraisal techniques have been around for ages, there is some uncertainty in the cash flow predictions used as part of them and the results generated through them. Investments should be timed to unearth their true potential and the appraisal process should evaluate proposals based on these factors. Implementation of the project is necessary to ensure the expected growth curve.

A review after the investment is completed should be carried out to determine the efficiency of the process. This will help organizations determine the efficacy of investment appraisal processes and the techniques that best stood out.

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Chapter 12: Implementing Improvements and Growth Measures

Regardless of the industry a business is in, business objectives and goals are necessary to achieve success. Objective setting and planning is one thing that remains constant or increases in importance with the passage of time. You can’t let go of the process or your objectives as you grow over time. In fact, these objectives become even more important as your business grows because there is greater room for you to fail.

What Is a Business Objective?

In the literal sense of the word, a business objective means something you aim for. It is a goal or an end result that businesses today endeavor to achieve. While goals can be defined as short-term endeavors, objectives last for a longer time and set a long-term aspiration for businesses to follow. Goals could include weekly productivity expectations, monthly sales total or some other short-term objective based on instant results. Goals are essential for businesses, because they help with micro-management and form the roadmap that businesses can follow for success with objectives.

On the flip side, an objective means a long term path for business success over an extended period of time. Objectives are defined as what an organization aspires to achieve over a year of operations. The year itself is broken down into innumerable goals that lay the building blocks to achieve the objectives that businesses have.

Business objectives set a destination for organizations today. As individuals, we usually don’t hop into the car unless we know where we have to go. The same principle applies to business objectives. These objectives act as your destination, the place you want your business to reach. Individuals on executive levels can break down business objectives on a personal level as well to plan their own routine and activities in a way that helps the business achieve objectives. Every objective is unique to every organization, and managers can break them down to achieve an enhanced level of synergy across all sectors and hierarchies of the organization.

Classification of Business Objectives

According to William F. Glueck, “Objectives are those ends which the organization seeks to achieve through its existence and operations.” It is generally assumed that businesses operate with only one objective, which is to make as much money as possible. However, this does not hold true in the business environment of today. Businesses today operate with a number of objectives focused on ensuring the interests of all stakeholders involved with the business. No business unit can solely focus on profits without appreciating the interest of their employees, community, customers and the society around them as a whole.

For instance, no business can prosper in any given market for the long term without providing fair wages to all employees and ensuring customer satisfaction through quality. A business unit prospers only through the goodwill of customers and employees. Business objectives also contribute to national aspiration and goals, as well as toward the international wellness of our planet.

The objectives set by organizations today can hence be classified as:

1. Economic Objectives

2. Social Objectives

3. Human Objectives

4. Global Objectives

5. National Objectives

Measuring Performance through KPIs and Metrics

There are a number of key metrics that can help organizations measure growth strategies and ensure improvements across the board today.
Metrics and KPIs are best defined as:

Metrics are measures that are used to monitor and evaluate all the different parts of your business. I believe for our purposes metrics are broader than KPIs.

KPIs (Key Performance Indicators) are a subset of metrics, and let you measure specific, highly critical areas of your business. Specifically, you should be looking at how KPIs are trending, looking for improvements, and determining how you can improve overall performance.

Tracking metrics and KPIs related to your business can help you not only improve overall results, but also align your people and processes in a unified manner. It gives you a series of benefits that eventually help you improve your operations.

The importance of metrics can be determined through the benefits you can derive through them. These benefits include:

• Metrics and KPIs help you measure financial performance. They are also extremely vital to manage your cash flow and ensure a healthy stream of income.

• Metrics and KPIs can reveal the truth about your business. They help you understand the progress your business is making from the highest level, right down to every individual employee.

• Metrics and KPIs give top management executives and employees a fair idea of what’s important for the business. Once employees and top managerial employees see what is being measured, they are able to tell what matters to the business and what they should be focusing on.

• Metrics also provide an actionable way for businesses to track their progress and ensure that they are on the right track and aren’t missing out on anything that can determine future profitability or success.

• Metrics and KPIs also highlight issues that otherwise go unnoticed in the organization. Due to these metrics, efficiency and productivity within an organization are given an additional boost.

Considerations to Stay Relevant in the Changing Business Environment

The faster you learn, the sooner you can adapt to changes and the more relevant you will remain in the industry. One of the biggest challenges that leaders face today is facilitating organizational adaptability.

Historically, western culture has focused on the concept of a heroic leader. The idea that a charismatic leader will swoop in as the knight in shining armor and save the business in distress has for long been the ideal characteristic that businesses and entrepreneurs have had to live up to. For instance, take a look at the cover of any business magazine and you will see pictures of the successful CEO and the achievements they have had, without a single word on the team that helped them achieve what they did.

As per recent business predictions, businesses that live by the same age-old methodology and don’t broaden their leadership practices will suffer at the hands of the changing business environment of today. Change will upgrade you onto a phase of relevance, be it from customers, competitors or even suppliers.

In this section, we shed light on some of the considerations and practices businesses can follow to remain relevant in this changing business environment:

Update Change Theory

Just like the business environment around us is constantly evolving, so are the leadership and change theories enabling work. Unfortunately, many theories of change are focused on antiquated efforts that don’t hold true anymore. For instance, the trickledown effect does hold value, but the fact that one person at the top can impact almost every aspect of an organization’s style and environment is insane. Every hierarchy in the organization comes with different approaches, environments, cultures and behaviors. Due to the difference in these core processes, the behavior toward change and the acceptance of new technologies will be different across the board. Hence, leaders cannot just impact every level within the organization by cascading goals, directions and values.

Organizations need to take into consideration the emergence of sub-cultures across hierarchies and the different dynamics across different levels. Based on this information, viewing the entire organization as a stable entity with similar characteristics and viewing the leader as the messiah in a white robe is plain farfetched.

Shift from Drastic Change to a Culture of Adaptability

The primary assumption with the change process is that it is something that begins and then ends once it has lived its finite life. A change effort, for instance, connotes a finite effort that is temporary and will not last long. Hence, organizations and employees really aren’t at fault to consider change a temporary effort which will pass when people start suffering change fatigue.

However, change isn’t something that ends, especially in the rapidly changing business environment of today. There is no single change per se, just varying levels of organizational adaptability toward different advancements.

Organizational adaptability can be defined as an organization’s ability to do something in a sustainable manner without interruptions. However, organizational adaptability requires a shift in perspective from top management, who should focus more on short-term management than on long-term management.

Clarify the Purpose of Leadership in Your Organization

With the growing surge in cross-functional teams, the role of the leader in organizations is a lot more prominent. As the business environment changes at a rapid pace, leaders have to act as liaisons and integrators that enable the coordination of disparate functions across the organization. Based on leadership theories from prominent psychologists, we can list down three major types of leadership styles:

• Administrative Leadership: This leadership style is focused on coordinating and structuring organizational activities in a bureaucratic manner.

• Adaptive Leadership: Adaptive leadership is what is seen when a meeting that starts with opposing viewpoints and different arguments ends on a positive note of consensus.

• Enabling Leadership: Enabling leadership refers to the conditions leaders set to enable new behaviors, learning and innovation.

The purpose and type of leadership should shift based on the situation organizations find themselves in, and the steps that should be taken to counter that situation.

Just like you would build good individual habits while achieving and fulfilling personal goals, you should live by the same principles while achieving business objectives. The actions that achieve the KPIs you selected above can be honed through decent business practices.

Automate the process as much as you can and start by making a calendar for both, you and your staff. You can also add reminders on the calendar to help you keep tabs on just what you need to do. Also, you need to regularly analyze and review your progress, and resolve whatever issues you feel are restricting your progress. Review if you have highlighted the right KPIs and what could be done to improve them even further. Measuring progress is necessary to meet objectives, and through the evaluation techniques mentioned in this manual, you will be on the right track.

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Workshop Exercises

Business Evaluation Exercises

01. The changing business environment today: Explain in your own words how this process will directly impact upon your department?

02. Understanding the impact of economic activity on business growth and success: Explain in your own words how this process will directly impact upon your department?

03. How to set objectives for your business?: Explain in your own words how this process will directly impact upon your department?

04. Metrics for measuring business success: Explain in your own words how this process will directly impact upon your department?

05. Evaluating business performance in the modern economy: Explain in your own words how this process will directly impact upon your department?

06. Porter’s Five Forces: Explain in your own words how this process will directly impact upon your department?

07. SWOT analysis: Explain in your own words how this process will directly impact upon your department?

08. Root cause analysis: Explain in your own words how this process will directly impact upon your department?

09. VMOST analysis: Explain in your own words how this process will directly impact upon your department?

10. Pareto principle: Explain in your own words how this process will directly impact upon your department?

11. Appraising future investments: Explain in your own words how this process will directly impact upon your department?

12. Implementing improvement and growth measures: Explain in your own words how this process will directly impact upon your department?

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SWOT & MOST Analysis Exercises

01. Undertake a detailed SWOT Analysis in order to identify your department’s internal strengths and weaknesses and external opportunities and threats in relation to each of the 12 Business Evaluation processes featured above. Undertake this task together with your department’s stakeholders in order to encourage collaborative evaluation.

02. Develop a detailed MOST Analysis in order to establish your department’s: Mission; Objectives; Strategies and Tasks in relation to Business Evaluation. Undertake this task together with all of your department’s stakeholders in order to encourage collaborative evaluation.

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Project Studies

Project Study (Part 1) – Customer Service

The Head of this Department is to provide a detailed report relating to the Business Transitions process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:

01. The changing business environment today
02. Understanding the impact of economic activity on business growth and success
03. How to set objectives for your business
04. Metrics for measuring business success
05. Evaluating business performance in the modern economy
06. Porter’s Five Forces
07. SWOT analysis
08. Root cause analysis
09. VMOST analysis
10. Pareto principle
11. Appraising future investments
12. Implementing improvement and growth measures

Please include the results of the initial evaluation and assessment.

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Project Study (Part 2) – e-Business

The Head of this Department is to provide a detailed report relating to the Business Transitions process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:

01. The changing business environment today
02. Understanding the impact of economic activity on business growth and success
03. How to set objectives for your business
04. Metrics for measuring business success
05. Evaluating business performance in the modern economy
06. Porter’s Five Forces
07. SWOT analysis
08. Root cause analysis
09. VMOST analysis
10. Pareto principle
11. Appraising future investments
12. Implementing improvement and growth measures

Please include the results of the initial evaluation and assessment.

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Project Study (Part 3) – Finance

The Head of this Department is to provide a detailed report relating to the Business Transitions process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:

01. The changing business environment today
02. Understanding the impact of economic activity on business growth and success
03. How to set objectives for your business
04. Metrics for measuring business success
05. Evaluating business performance in the modern economy
06. Porter’s Five Forces
07. SWOT analysis
08. Root cause analysis
09. VMOST analysis
10. Pareto principle
11. Appraising future investments
12. Implementing improvement and growth measures

Please include the results of the initial evaluation and assessment.

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Project Study (Part 4) – Globalization

The Head of this Department is to provide a detailed report relating to the Business Transitions process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:

01. The changing business environment today
02. Understanding the impact of economic activity on business growth and success
03. How to set objectives for your business
04. Metrics for measuring business success
05. Evaluating business performance in the modern economy
06. Porter’s Five Forces
07. SWOT analysis
08. Root cause analysis
09. VMOST analysis
10. Pareto principle
11. Appraising future investments
12. Implementing improvement and growth measures

Please include the results of the initial evaluation and assessment.

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Project Study (Part 5) – Human Resources

The Head of this Department is to provide a detailed report relating to the Business Transitions process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:

01. The changing business environment today
02. Understanding the impact of economic activity on business growth and success
03. How to set objectives for your business
04. Metrics for measuring business success
05. Evaluating business performance in the modern economy
06. Porter’s Five Forces
07. SWOT analysis
08. Root cause analysis
09. VMOST analysis
10. Pareto principle
11. Appraising future investments
12. Implementing improvement and growth measures

Please include the results of the initial evaluation and assessment.

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Project Study (Part 6) – Information Technology

The Head of this Department is to provide a detailed report relating to the Business Transitions process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:

01. The changing business environment today
02. Understanding the impact of economic activity on business growth and success
03. How to set objectives for your business
04. Metrics for measuring business success
05. Evaluating business performance in the modern economy
06. Porter’s Five Forces
07. SWOT analysis
08. Root cause analysis
09. VMOST analysis
10. Pareto principle
11. Appraising future investments
12. Implementing improvement and growth measures

Please include the results of the initial evaluation and assessment.

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Project Study (Part 7) – Legal

The Head of this Department is to provide a detailed report relating to the Business Transitions process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:

01. The changing business environment today
02. Understanding the impact of economic activity on business growth and success
03. How to set objectives for your business
04. Metrics for measuring business success
05. Evaluating business performance in the modern economy
06. Porter’s Five Forces
07. SWOT analysis
08. Root cause analysis
09. VMOST analysis
10. Pareto principle
11. Appraising future investments
12. Implementing improvement and growth measures

Please include the results of the initial evaluation and assessment.

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Project Study (Part 8) – Management

The Head of this Department is to provide a detailed report relating to the Business Transitions process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:

01. The changing business environment today
02. Understanding the impact of economic activity on business growth and success
03. How to set objectives for your business
04. Metrics for measuring business success
05. Evaluating business performance in the modern economy
06. Porter’s Five Forces
07. SWOT analysis
08. Root cause analysis
09. VMOST analysis
10. Pareto principle
11. Appraising future investments
12. Implementing improvement and growth measures

Please include the results of the initial evaluation and assessment.

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Project Study (Part 9) – Marketing

The Head of this Department is to provide a detailed report relating to the Business Transitions process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:

01. The changing business environment today
02. Understanding the impact of economic activity on business growth and success
03. How to set objectives for your business
04. Metrics for measuring business success
05. Evaluating business performance in the modern economy
06. Porter’s Five Forces
07. SWOT analysis
08. Root cause analysis
09. VMOST analysis
10. Pareto principle
11. Appraising future investments
12. Implementing improvement and growth measures

Please include the results of the initial evaluation and assessment.

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Project Study (Part 10) – Production

The Head of this Department is to provide a detailed report relating to the Business Transitions process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:

01. The changing business environment today
02. Understanding the impact of economic activity on business growth and success
03. How to set objectives for your business
04. Metrics for measuring business success
05. Evaluating business performance in the modern economy
06. Porter’s Five Forces
07. SWOT analysis
08. Root cause analysis
09. VMOST analysis
10. Pareto principle
11. Appraising future investments
12. Implementing improvement and growth measures

Please include the results of the initial evaluation and assessment.

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Project Study (Part 11) – Logistics

The Head of this Department is to provide a detailed report relating to the Business Transitions process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:

01. The changing business environment today
02. Understanding the impact of economic activity on business growth and success
03. How to set objectives for your business
04. Metrics for measuring business success
05. Evaluating business performance in the modern economy
06. Porter’s Five Forces
07. SWOT analysis
08. Root cause analysis
09. VMOST analysis
10. Pareto principle
11. Appraising future investments
12. Implementing improvement and growth measures

Please include the results of the initial evaluation and assessment.

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Project Study (Part 12) – Education

The Head of this Department is to provide a detailed report relating to the Business Transitions process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:

01. The changing business environment today
02. Understanding the impact of economic activity on business growth and success
03. How to set objectives for your business
04. Metrics for measuring business success
05. Evaluating business performance in the modern economy
06. Porter’s Five Forces
07. SWOT analysis
08. Root cause analysis
09. VMOST analysis
10. Pareto principle
11. Appraising future investments
12. Implementing improvement and growth measures

Please include the results of the initial evaluation and assessment.

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Program Benefits