Strategy fundamentals – know your market

Strategy is a fluid and dynamic process. It is about envisioning the future, creating a clear direction for the business, building on current competences and skills, and making choices about actions and priorities in pursuit of creating and developing competitive advantage; not to mention commercial performance.

To succeed, alignment across a business’ leadership team and engagement with its people across the organisation is critical.

Strategy is not rigid or prescriptive, rather it is directional in pursuit of a clear vision and it must flex to adapt and respond to the threats and opportunities that arise from changing market and competitive situations.

Understanding the environment you operate in is a key component of any strategy. It is critical to determine how you fit into the market, to monitor how it is changing and evolving over time, and to decide how you respond. It’s also important to know the different markets, sectors and segments available to you, to choose which ones to target, and then identify how to compete effectively.

Building market awareness includes understanding customers, competition and market trends, and understanding how your internal competences and capabilities align to these. By gathering data and insight across these areas you can build depth and confidence into your strategic and tactical decision making.

Customers

First and foremost, who are your customers? How many of them are there (or could there be), and what trends can be observed? Mapping the market and understanding the segments that exist is a fundamental task. You also need to be clear what your customers want from you, and how this might evolve over time.

Competitors

Who else is serving your customers? You need to be able to answer that question today but also to have an informed view of how the competitive landscape is likely to look in the future. Alarms bells should be ringing if you perceive their offering to be a closer fit with customer needs.

Market

What does your industry / market place look like? Identify the key social, regulatory, economic, political, and technological changes and trends. Once you’ve done that you can establish how you will respond. You may choose not to respond at all, but that’s a decision that can only be made once you’ve evaluated the risks.

Internal

Having understood the external environment, it’s important to also understand internal capabilities and how these help/hinder your strategy. The best known tool is the SWOT analysis, which is one of the most valuable yet under-utilised management tools available.

Once you have an understanding of your market across these four areas, then you can feed this knowledge into your strategy and proposition.

6 key market awareness questions to ask yourself:

Do you have a deep understanding of your market and how it might develop in the next 2-4 years?
Do you have a clear understanding of major external trends and know how they may impact your organisation?
Do you understand your current and future competitors, and know how you’ll outperform them?
Do you have a good understanding of customer needs and how they might develop in future years?
Do you regularly solicit customer and partner feedback to improve products and services?
Do you know what the biggest opportunities and threats facing your organisation are?

These questions are mirrored within our Strategy Survey, a free tool also available on our website.

This blog is based on the first of a set of four in Whitecap’s Strategy Series, published in November/December 2013.

This was posted in Bdaily's Members' News section by Peter Rivers .