Start Up of Consultancy Business

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Helpful in strategic planning
   Allows companies to:
     Develop competitive advantages relative to
     See competitive disadvantages
     Understand competitors’ strategies
What to consider
 Who are our competitors?
 What is their strategy?
 What are their strengths/weaknesses?
 How do they compare to us?
 How do they operate? (products, pricing,
  promotion, production, facilities, etc.)
What would you like to know in the
Where to find data
   Annual reports             Talking with ex-
   Industry publications       employees
   Market research            Patent applications
   Speeches                   Press releases
   Newspaper articles         Government reports
   Promotional material        or data
   Trade shows
SWOT Analysis
 SWOT analysis is a tool to analyze a
  company’s current performance and
  position in a marketplace
 It can be used for decision making at a
  variety of levels
SWOT stands for:
 S: Strengths
 W: Weaknesses
 O: Opportunities
 T: Threats
 What advantages do you have?
 What do you do well?
 What relevant resources do you have
  access to?
 What do other people see as your
   To discover strengths, look at:
     major sources of revenue and profit
     market share of company in its various
      product lines
     strong brands
     marketing/advertising effectiveness
     availability of skilled employees
     morale of employees
 What   is the cost of capital?
 What is the stock price?
 Does the company harness information
  technology effectively?
 Does the company manage its inventories
 Has the company demonstrated the ability to
  adapt and change?
 Is the company able to innovate?
 How has the company withstood international
 What could you improve?
 What do you do badly?
 What should you avoid?
   To discover weaknesses, look at:
    least profitable product lines
    weak brands
    marketing/advertising effectiveness
    Lack of focus
    Ability to attract talent
    biggest expenditures of the company
    Ability to raise money
 stock price history
 Has the company been able to bring new
  ideas and products to the market place?
 Employee morale
 Do employees have faith in management?
 Competition
   Where are the good opportunities facing you?
   What are the interesting trends you are aware
   Useful opportunities can come from such things
     Changes    in technology and markets
     Changes in government policy related to your field
     Changes in social patterns, population profiles,
      lifestyle changes, etc.
     Local Events
   To discover opportunities, look at:
     Competitive  position of the company
     New technologies that innovate or lower costs
     Inexpensive acquisition opportunities
     Use of internet
     Possible incentive plans to boost employee
     International opportunities
 Is there an opportunity to demand better
  prices from suppliers?
 Are there opportunities to cooperate with non-
  competitive businesses for mutual benefit?
 Can dead-wood work-force or product lines
  be reduced to boost profitability?
 Can the company get more predictable cash
  flows by establishing better relations with
   What obstacles do you face?
   What is your competition doing?
   Are the required specifications for your job,
    products or services changing?
   Is changing technology threatening your
   Do you have bad debt or cash-flow problems?
   Could any of your weaknesses seriously
    threaten your business?
   To find threats, look at:
     level of reserves needed to withstand sudden
      changes in the environment
     level of regulation in industry
     trade union activity that could have an
      adverse effect
     international competitors
     amount of trained and motivated employees
 Financial  soundness
 Ability of company to keep up with
  technological changes
 Pressure on margins
 Size of transactions
 Competition in cyberspace
A start-up small consultancy business might carry
out the following SWOT analysis:
   Strengths:
   respond very quickly (no red tape, no need for higher
    management approval, etc.)
   really good customer care, as the current small amount of
    work means we have plenty of time to devote to
   lead consultant has strong reputation within the market
   change direction quickly if marketing is not working
   little overhead means good value to customers
   Weaknesses:
   Our company has no market presence or
   We have a small staff with a shallow skill base in
    many areas
   We are vulnerable to vital staff being sick,
    leaving, etc.
   Our cash flow will be unreliable in the early
 Opportunities:
 Our business sector is expanding, with
  many future opportunities for success
 Our local council wants to encourage local
  businesses with work where possible
 Our competitors may be slow to adopt new
 Threats:
 Will developments in technology change
  this market beyond our ability to adapt?
 A small change in focus of a large
  competitor might wipe out any market
  position we achieve
   The consultancy might therefore decide to
    specialize in rapid response, good value
    services to local businesses. Marketing
    would be in selected local publications, to
    get the greatest possible market presence
    for a set advertising budget. The
    consultancy should keep up-to-date with
    changes in technology where possible.

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