Business Plan Tips : Business Situation Analysis


The key to any business successful plan is
the situation analysis. It doesn’t sound very sexy, but, think of it as wearing a “you were
here” sign, this is where you start. If you don’t do the situation analysis effectively,
there’s no way you can come up with effective strategy. And in fact, this is the most neglected
part. We don’t do our homework before we get started. The good news is the homework is
not that hard. It has four basic parts. The first is, the background. Look at where we
come from so that we get perspective on where we’re going. It has four basic parts. The
first is the background. Look at where we come from so that we get perspective on where
we’re going. Looking at where we’ve been, would give us a better perspective on where
we’re going and help us avoid mistakes in the future. The second part is mission. Understanding
who we are, what do we do and who do we serve. Internal analysis is a review in detail of
our internal assets and this isn’t just physical assets. It includes leadership, marketing,
finance, operations, HR, how we do these functions and how well they serve strategy. The last
part is external analysis. Understanding industry attractiveness competition and what is going
to take to be successful. Peter Drucker refers to the meaningful outside and that’s important
for that in order for a company to do well, it must understand the outside first. According
to Drucker, this is the no. 1 job of the CEO, in fact, inside or only cost.

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