It is in fact a challenge to
survive and grow your business in this highly volatile digital market. Before
you plan your objectives and strategies, it is mandatory for you to identify
where you stand right now when considering your internal and external factors.
If you know where you are, then you will be able to come up with practical
objectives and strategies to achieve your digital vision.
We all know about SWOT analysis
and yet we really do not know how well we can use it to shape our organizations
as well as ourselves. First you need to know about your strengths. We all have
strengths. Then, the question comes to our mind is what are my major strengths?
You should focus on you major strengths rather than counting on other minor
strengths.
To be a major strength it should
create value for your organization and to your target market. Value in terms of what? This should add value
to its value chain activities which enable you to earn higher margins compared
to your competitors. For an instance it can add value to human resource,
infrastructure, systems etc. Value creation for customers or increasing customer
value proposition. The strength should give a reason for your stakeholders to
choose you or your origination over other competing offers.
Moreover, to be a strength it has
to be unique. Why it has to be unique? Because, the strength has to
differentiate your organization. For an example, how many digital platforms are
available to make payments online? But we are using only a very few reputed
platform to do it. One of the reasons could
be the trust the brand has built over
time in online payments. Further, it has
to be lasting. If you cannot sustain your strength it cannot be a major
strength. For an example, Apple has sustained their ability in digital
transformation in the perspective of digital innovation. Again, you can see it
is all interlinked. If it can create value, of course it will drive you to be
unique in the market place. Amazon is
another example who has sustained their strength across all digital platforms.
Furthermore, your major strength
cannot be copied by any one easily. For an example Google holds more than 90%
of the market share in SERPs. Why it is only Google? It’s because of their
unique crawling & indexing mechanisms. Next, it is very complex for someone
to identify their formation of search engine algorithms. Have you ever thought a
strength itself can be used to analyze a substantial part of your capabilities?
But, above proves how complex it is to identify your super powers and it cannot
be analyzed over a short period of time.
Next internal factor is
weaknesses. Again you need to analyze this internal aspect critically. If you
really do not know your major weaknesses, it will be very hard for you to face
market competition and other external challenges in the macro environment. There
can be weaknesses which are not that critical and there are weaknesses which
are critical. However, it is hard for you and your organization to identify and
prioritize your weaknesses. To be a weakness it has to pass through following
test.
First it has to be meaningful to
your target audience. That means customer knows what your weakness is. You may
have heard what outsiders talk about your company. May be complex and low user
friendly processes can be a major weakness where it will be known by your
consumer through negative past experience coupled with negative word of mouth.
Next, it has to be unique to yourself. For an instance, if your digital
marketing ability is low, how will it be unique to yourself? You might be good
in digital marketing in the platforms of Facebook and LinkedIn, but not
performing well in other platforms of Instagram and Google ads. On the other
hand your competitors’ weakness in digital marketing will be unique to
themselves.
If it is a major weakness, finally
it is difficult to fix or that will take a long period of time to fix that
issue. In the below video you can see we referred it as Achilles heel. In other
words, if your competitor knows you weakness very well, you are in a major risk.
This weakness maybe caused by a sticky resource which the organization may have
had; previous success stories or investments which have not given expected
returns.
Now let’s take our focus to the
external aspects which are opportunities. We generally talk about
opportunities, but are we capitalizing on the correct opportunities? To know
the correct or suitable opportunity, first it has to be large in general.
Before explaining that, the opportunity which is large for you will not be that
large for your indirect competitors. For an example, you may have started a new
taxi application where you will be considering your local nearby market as your
opportunity, whereas a global player would not consider that market as an
opportunity.
If it is an opportunity it has to
accessible, if it is not accessible or hard to access, it will not be an
opportunity. However, you need to equip with required capabilities and
competencies in order to access your correct opportunity to explore. Further,
this opportunity should last for a time period. However, with technological
revolution, the lasting opportunity will be subjected to incremental changes.
Finally, if you have identified a great opportunity it has to be in accordance
with discussed criterion.
Next external element we discuss is
threats. What facts will cause a negative impact on organization activities? Not
all activities in a macro environment are going to have a negative impact on
the organizational activities. Hence, you should identify what are the threats
which are having critical negative impacts? In order to be a threat, it has be
significant. In other words critical. You will be facing immense competition in
digital marketing which is very critical where your customers are tempted to switch
to a new platform due to increased value proposition. Moreover, threats also have
to be lasting now. If we take the example of competition, it is long lasting.
By knowing your strengths, weaknesses,
opportunities and threats you will have a better understanding about your
current stand. But, it is much meaningful if you can deploy a strategy by the
clearly analyzed elements. You can develop four strategic paths form this
analysis. Those are as follows;
Strengths
to Threat
Maxi-Mini strategic option: managers
should think about which organizational strengths can mitigate or reduce the threats in the environment.
Strengths
to Opportunities
Maxi-Maxi strategic option: the
strategic level of the organization should look at which organizational
strengths can be used to exploit opportunities in the external environment.
Weaknesses
to Opportunities
Mini-Maxi strategic option: the
managers should concentrate which organizational weaknesses need to be
addressed on priority basis in order to grab the external environment
opportunity.
Weaknesses
to Threats
Mini-Mini strategic option: organizations
need to focus on which organizational weaknesses need to be addressed and which
threats are to be mitigated. In other words, when you focus on minimizing your
major weakness over long time period, that will enable the organization to face
the challenges as the thereat is mitigated.
Identifying your strengths,
weaknesses, threats and opportunities cannot be done overnight. This is a
continuous journey. Hence organization should have good monitoring and
controlling system to be on the edge and ride on the wave of competition.
Further this analysis can be developed in to the concepts of blue and red ocean
strategies.
Chamara Ekanayake, ARCTube | @echamara
