Explore - Experience - Excel

Comprehensive analysis to evaluate the attractiveness and viability of a prospective new and existing business

Strategic Analysis

“Comprehensive analysis to evaluate the attractiveness and viability of a prospective new and existing business”

The Business attractiveness model is a useful framework to analyze the feasibility and viability of a prospective new and existing venture.

The Strategic Analysis framework is a strategic tool and contains 9 elements. These elements are broadly classified in three areas,

Geographic location– national competitiveness, external environment

Industry characteristics– industry life cycle, industry structure, market trends

Product characteristics– Differentiation possibilities, cyclicality of product/service, value perception, profit margin.

Analysis of all 9 forces can help to generate an in-depth knowledge about the possible success of the new venture and an existing business.

1] National competitiveness will help identify the competitiveness of the country where the business is wished to be established. The factors to analyze national competitiveness are natural and artificial resources available, government support, presence of related and supportive industry, availability of skilled and unskilled human resources, & appropriate infrastructure. In-depth analysis of these factors will provide useful information about the attractiveness of the country.

2] External Environment check will provide a thorough analysis of political, economical, legal, social, technological systems of the target market.

3] Industry structure
analysis will provide a clear picture of industry competitiveness and its current players; competitors, customers, suppliers, consumers, substitutes and alternatives

4] Similar to mankind, business industries pass through different life cycle. Each stage poses different challenges and opportunities for the existing and new players in the industry. Industry life cycle analysis can help in segmentation, positioning and targeting your customers with appropriate marketing mix.

5] Market trends identification is key research for every business. Identifying positive and negative trends towards your products/services helps you to customize them to meet the demands of your target customers.

6] Cyclicality of product/service is term used to measure the quantity of your product /service can be sold in a given timeframe. Some products/services are consumed more often than others. Depending upon the characteristics of the products/services and their importance in daily life, its cyclicality can be measured.

7] Differentiation possibilities of your products/services depends upon several factors such as price of your product/service, number of competitors, customers readiness, available resources & costing, and life cycle of the industry. Analyzing these factors will help understand the dynamism of the industry.

8] Value perception is the sense of knowledge about your products/services and mainly its importance to customer’s life. Higher possibilities of creating value through process or products/services can increase the growth potential of the business.

9] Profit margin/ROI is the bottom-line every business expects to generate. Preparing a well-defined business plan with all minute details will help to figure potential profit margin and also ROI.

Conclusion:Careful investigation of market with the help of above forces will provide valuable insights, particularly to start-ups, entrepreneurs and SME’s to decide on the prospect of their idea.

The author of the article is Prof. Samir Randive, faculty – Marketing at International School of Management Excellence, Navi Mumbai. Prof. Samir has international experience in Sales and Marketing in FMCG, Hospitality and Education industry. Prof. Samir completed his BSc. form Mumbai University and MBA in International Management with specialization from University of Ballarat, Melbourne, Australia. He was the recipient of the director’s award and scholarship during his MBA program at University of Ballarat.