Which Of The Following Is A Useful Tool For Identifying Growth Opportunities?

When developing, refining or reviewing a business strategy there are a huge range of tools, models and frameworks that can help you lot organize your thinking and give you a process by which to conduct analysis and go the necessary insight to make the right strategic decisions for your business.

Knowing what to exercise to grow your business organisation and drive your success is hard and yous're unlikely to merely be struck with a brainwave and suddenly have all the answers. Simply don't panic, hundreds of academics and business concern theorists, also as leading practitioners and concern thinkers take devised numerous frameworks to help leaders ask the correct questions, to get the right insight and uncover the best course of activeness for their business.

So, it'due south merely a case of working through all these strategy tools and coming out with a programme. Correct?

Well…the problem is, there are quite literally loads of possible tools to choose from. Yous tin't apply them all or you lot would be analysing and strategizing for all of time, rather than getting on with the execution and achieving your goals.

So, which tools should you selection? And in what club should you work through them? With and so many strategy tools and frameworks in existence it'southward difficult to know what tool does what or when you should use them. That's why we've pulled together this initial listing of our favourite tools to get you started.

All of these tools will help y'all with the showtime 3 stages of your strategic analysis – namely, understanding your market, external environment, competitors and your own business.

Keep an eye out for our forthcoming strategy tool lists covering the rest of the strategic planning process!

The stages of strategic analysis

If you utilize the right strategy tools, then devising a strategic plan tin can exist a procedure. We certainly believe that here at Lucidity, afterwards all, that'due south what our strategy software does! We guide our customers through the process of conducting assay and making strategic decisions to build a solid plan to drive their growth. It can exist a simple, pace-by-footstep process if you have the right tools.

Hither are the stages of analyse you lot need to do in society to build an informed and effective strategy.

Understand your marketplace and the external surroundings you are operating in
Understand your competitors
Analyse your own concern
Understand the different strategic options you lot have
Evaluate the different strategic options and make the right decisions to set your strategy
Structure your strategy plan so it'due south piece of cake to understand
Exam that strategy and refine accordingly

Today nosotros're going to focus on the starting time three stages and have y'all through our favourite strategy tools to get the task washed, with links to find out exactly how to apply each tool once you're set to become started.

We would e'er recommend y'all employ these strategy tools equally the ground for workshops with a various range of people from across the business concern. Although you can work through these tools on your ain, working and collaborating with your teams will nearly always produce a better result. Different people will take unlike perspectives and that will lead to different ideas and observations.

Since this early part of your strategic planning efforts are all nigh information gathering and noesis building, the more than feel you have in the room and the greater the spread of departments and roles, the more than insight y'all will exist able to capture when it comes to both your external and internal analysis.

You should also try and bring this process to life as much every bit you lot can. If you lot can finer get anybody engaged in the process early on, you'll ultimately take a more successful strategy and better execution success.

So, don't just retrieve about which tools you lot'll use, but also consider how you will complete them. You'll find a lot of these tools and frameworks within Lucidity meaning you can piece of work through them together on-screen (remotely or in-person), filling them out pace-past-pace and have all your work saved together in i place and looking cracking.

PESTLE Analysis
PESTLE is both simple to use and sympathize, and comprehensive. It'south a tool that gets you to listing out all the external factors that could impact your business. The sections of the model are Political, Economic, Societal, Legal and Environs.

LoNGPESTLE
This is an extension of PESTLE which overlays location equally a consideration across all of the PESTLE categories. Y'all're asked to consider how the impacts differ when you lot look at the Local, National and Global contexts.

DESTEP
This is an alternative to PESTLE which has more emphasis on demographics. Here you will consider the profile of the population and recollect about how that will impact your business organisation – age, education, gender, geographies, family statuses etc. The categories in DESTEP are Demographics, Economic, Sociocultural, Technological, Ecological and Political/Legal.

Porter'southward 5 Forces
The 5 Forces strategic tool will assistance you analyse your industry (or, indeed any manufacture or market, say if you're considering a new venture or a move into a new space). The tool helps you consider all the forces at play in a competitive market place and see what things volition touch on growth potential. It's a swell tool for determining the potential profitability of a market place.

Four Corner Analysis
Four Corners is a great tool for analysing a chosen competitor company and provides y'all with a succinct, single diagram of information and insight on that business. As the proper name suggests, there are four sections to the tool that inquire you lot to certificate the business organisation' motivations and drivers, their current strategy, the management assumptions (how the leadership team perceive their position in the market place) and their capabilities.

Perceptual Map
This is a great tool for mapping out where all of your competitors sit down in the market. Although this won't assist you capture lots of information on each company, it volition requite you an hands understandable and digestible visual representation of the whole competitive mural. The diagram has two axis, typically (but non exclusively) cost and quality, and the job is to position all of your competitors forth those centrality in relation to how consumers perceive them. Yous will also place your ain make on the graph and have a clear view of where you sit in relation to the rest of the players in your market.

SWOT Analysis
Perhaps the most famous of all strategic planning tools, SWOT stands for Strengths, Weaknesses, Opportunities and Threats. There is no improve place to start when it comes to examining your business organization and starting to retrieve about the futurity of your company.

SOAR Analysis
SOAR is another 2 x 2 matrix tool, and while it shares the Strengths and Opportunities quadrants of a SWOT Analysis, it shies abroad from the negative Threats and Weaknesses and instead opts for focusing on Aspirations and Results. So, on one side are the positives about your business that can exist exploited, and the other side has the vision of what you want to reach if you exploit those factors well. If you're running workshops with different groups in the business organisation at unlike times, yous may find the SOAR practise would be better suited to some groups rather than SWOT.

Porter'south Value Concatenation
This is an extremely valuable framework that tin can help yous empathize the value y'all create for your customers and therefore decide your competitive edge. It asks y'all to capture all the activities within the business that go into creating and delivering your product or service, and comparison the cost of those activities to the value you create. This leads y'all to your margin – and the higher the value of your product/service, or the lower your costs of creating that value, the better your margin.

VRIO Framework
This is another strategy tool which will aid your understanding of how your concern works and the strengths that can be exploited for growth. Here yous are mapping out the aspects of your business that give you a competitive advantage. You're asked to list what resources, capabilities, products, partnerships – anything really – that are Valuable, Rare, Inimitable and Organized. Thing of this as a list of your all-time of the all-time – all the groovy stuff you accept going for you.

BCG Growth-Share Matrix
This strategic tool, developed by the Boston Consulting Group, will help if you lot take a number of different products or services. The ii 10 2 matrix has four boxes that describe different statuses based on market share compared to potential market growth. The quadrants are Stars (where you have loftier market share in a marketplace with high growth potential), Cash Cows (where you have high market place share merely it's not a growing market), Pets (low market share in a market place that'south not got a lot of growth potential) and finally Question Marks (where you have low market share in a market with high growth potential). Past understanding the contour of your products/services in this way you lot'll commencement to get a expert idea of what to do with each in lodge to drive the overall growth of your business.

ADL Matrix
Like the BCG Growth-Share Matrix, the ADL Matrix is a tool to help you map out a portfolio of products or services and truly understand each of them and their value to your business organisation. With this matrix yous position each of your products or services in relation to their competitive position (from weak compared to the competition all the manner to ascendant) and the industry lifecycle phase (from an embryonic market to an ageing industry). The model has unlike advice and suggested deportment based on each possible position on the grid. It helps you lot see how much time and attention to spend on which products or services – from large pushes to proceeds marketplace share, to completely abandoning, and everything in between.

Perceptual Map…. again
We've already talked near the perceptual map tool when looking at your competitors. Now y'all're focused on analysing your ain business it's time to pull it out once more and add yourself to the map. Where practice you sit in relation to the residue of the market? This tool is great for giving a fast and easy to empathize visual representation of your competitive positioning – very handy when you're explaining your offering to people, exist in new recruits or even potential customers.

What next?

Whether you've called to piece of work through all of those tools, or picked from the bunch, you'll end up with a solid grounding of analysis to assist you build the right strategy for your business.

Now you fully understand what's going on externally and what'south happening internally, you're fix to consider the different strategic options available to you lot and start to assess each to determine the strategy that'll drive your success. Check out our list of recommended tools to evaluate different strategic options.