Use An Industry Analysis To Discover Your Key Success Factors

And Develop A Strategic Management Model For Your Business

A definition marketing strategy includes an industry analysis and identifies key success factors. Understand your industry strategies through online strategy guides or a strategic management model.

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Conducting an analysis of your industry is important for many reasons.

You can use online strategy guides or strategic management models to help you in your analysis.

Definition Marketing Strategy:

A primary reason is that it will help you to identify and track your business key success factors (KSF). Why is that important to your business?

Because knowing what your KSFs are will help you focus on them; and tracking them will help you understand how your business is doing from a strategic management process perspective.

KSFs are most often used in strategic management and strategic planning. You need to identify them for your industry and then develop specific KSFs for your business.

Key success factors are often used in building competitive strategy and in competitive strength analysis for comparing your competitors to each other and to your business.

Once identified, key success factors can become part of your business objectives (e.g. if attracting new customers is a key success factor then your business objective would be to increase the new customer base).

Key success factors are typically those factors that affect your business’ ability to do well in your market. You must be good at analyzing and understanding your industry to determine what your key success factors you need to focus on to succeed in your business. Most industries have between three and five key success factors.

Industry Analysis: Some Key Success Factors:

(not all will be applicable to all businesses or industries)

• Ability to attract new customers

• Ability to retain existing customers

• Ability to attract and retain good employees

• Successful advertising campaigns (success is measured on the increase in sales)

• Managing your service or product

• Managing your human resources

• Managing your cash flow

• Managing your revenue growth and your profit

• Utilization of operating capacity (if industry average is 80%, your goal will be to be higher than average)

• Strong distribution channels

• Low cost production structure (compared to the industry cost structure) – could be through economies of scale or other operational efficiencies

• Strong technology capability

• Location to customers (if close, time to deliver to market will be relatively fast and shipping costs will be low)

• Sustainability of the business

It is critical that you understand what your industry's key success factors are; the only way to discover them is to do a thorough industry analysis.

In your industry analysis, determine the importance of each KSF:

• by determining how customers choose between competitors;

• what product characteristics, and how much product differentiation, do customers feel are most necessary;

• what is the average level of resources (e.g. people, equipment, facilities) and capabilities to operate in the industry – you need to employ/use the average and more, to be successful;

• what are unique differences within the industry and are they valued (do a value chain analysis for key competitors in your industry) – tie that to your unique competitive advantage and ensure that it is a sustainable advantage (many competitors look to copy that advantage and your business will then lose it as a unique point of differentiation; try to build an advantage that is not easily copied).

Conduct your industry analysis, learn which key success factors are most important to your industry (and how they fit in your strategic management model) and to your business, and act on what you've learned by developing action items and an action plan.

Once you have identified them, build your business to deliver recognizably better-than-the-industry standard on one or more of the key success factors.

Once you have conducted your industry analysis you need to deliver on this better-than performance to ensure that your business succeeds within its industry. Your focus then must be on maintaining the advantage and on looking for new advantages.

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