Session 3 The Business Review- Internal Analysis- SWOT

1. Session 3The Business Review- Internal Analysis- SWOT

2. STEP 1: The Business Review/Internal Analysis Very often when we consider developing an Export Marketing Plan we have a natural tendency to look forward, and dream of how we want our products to look, and how and where we want them to be positioned and sold. This is a good start, and is indeed part of the process, but firstly we need to look at where we are now to ensure that we are making the right choices. The ‘Business Review’ or ‘Internal Analysis’ is the first step of the EMP process, and has a number of different components…… Centre for the Promotion of Imports from developing countries | May 27, 2010

3. The Components of the Business Review/Internal Analysis: 1.1: Defining your Mission 1.2: Defining Your Style 1.3: Defining the components of your Brand 1.4: Assessing your Current Business Position 1.5: Assessing Your ‘Sustainability’ 1.6: Identifying Your Strengths and Weaknesses from your Internal Analysis (The SW of SWOT) Centre for the Promotion of Imports from developing countries | May 27, 2010

4. 1.1 Defining your Mission Mission Statements need not be extensive or ‘wordy’, in fact some of the best aren’t! They should be a simple paragraph stating who you are, what you do or make, why you do it (your values, your ideals or your raison d’etre) and what overall aims you aspire to achieve. Also known as the ‘The Four What’s’: what you are, what you make/sell/do, what you stand for, and what (where) you want to be. Centre for the Promotion of Imports from developing countries | May 27, 2010

5. Mission Statement Examples The following represent a list of mission statements for a number of well known companies. Low cost airline easyjet’s mission statement is: “To provide our customers with safe, good value, point-to-point air services. To effect and to offer a consistent and reliable product and fares appealing to leisure and business markets on a range of European routes. To achieve this we will develop our people and establish lasting relationships with our suppliers.” Google‘s mission is ‘to organize the world’s information and make it universally accessible and useful’. Starbucks’ mission statement is to “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.” eBay’s mission statement is to “provide a global trading platform where practically anyone can trade practically anything.“ Amazon’s mission statement is – “to build a place where people can come to find and discover anything they might want to buy online.” Centre for the Promotion of Imports from developing countries | May 27, 2010

6. THE ELEVATOR PITCH An effective mission statement should be concise enough for you to describe your company‘s purpose and ideals in less than 60 seconds. You may already have a ‘Mission Statement’, or an ‘About us’ section in your website. Practical: ‘The Elevator Pitch’ DESCRIBE YOUR BUSINESS IN 60 SECS TO YOUR NEIGHBOUR USING THE FOLLOWING QUESTIONS AS PROMPTS: Centre for the Promotion of Imports from developing countries | May 27, 2010

7. Mission Statement What is the name of your Business and where are you based? What does your Business do/make/sell? Why do you do it, and what are your business values? What do you aspire to do? What does the future hold for you and your business?

8. AND NOW…. Enter your rough or draft Mission Statement in your EMP Log Book and work on it for completion by the next workshop. (Ideally an effective mission statement is best developed with input from all the members of an organization. It should be an inclusive process) Centre for the Promotion of Imports from developing countries | May 27, 2010

9. 1.2 Defining Your Style You may have also already clearly defined your overall ‘signature’ style or it may be an area on which you have not previously focused or have taken for granted…..Or you don’t have a clear ‘style’. However, it is important to consider and clearly define, as it will not only help direct your product development but it will also help you in targeting certain markets. Whether you see yourself as having a strong identity yourself, or more as a manufacturer of customized product, promoting a clear style will support the decision of customers with this ‘style preference’ to buy from you. It will also indicate to customers that you have a specific design/style ‘signature’, which in turn will assist with the perception of your prices. Centre for the Promotion of Imports from developing countries | May 27, 2010

10. We can conjure up a description of style in a painting We can conjure up a description of style in a painting

11. What do we mean by ‘Style’ Styles can generally be defined by considering distinctive common aspects that appear in all your products: A thread that connects the products to each other. These are usually determined by the raw materials and production techniques used and or the inspiration behind products. Within your range you may have the opportunity to market a number of ‘styles’, however these generally need to be each very clearly defined. Mixing of many different styles is possible, but this eclectic approach can be very difficult to execute well and has to be developed as a style in itself. The overall aim is for you to have/develop a unique recognisable style Centre for the Promotion of Imports from developing countries | May 27, 2010

12. Example ‘Style’ / Taste Groups Centre for the Promotion of Imports from developing countries | October 2012

13. Examples of ‘Styles’ Traditional – products that have a historic cultural reference, a heritage, and are either genuinely produced using traditional techniques and decoration or are reproduced to appear traditional. Traditional in the context of Europe would mean products typical of a particular region or period of time. E.g. Liberty of London: http://www.liberty.co.uk Centre for the Promotion of Imports from developing countries | May 27, 2010

14. Traditional Ethnic – products may relate to genuine antiquities which are traditional to a particular ethnic race, region or culture Centre for the Promotion of Imports from developing countries | May 27, 2010

15. Classic products are generally simple, harmonious, well proportioned and finished to a high quality, with no particular reference to a culture orperiod of time. They are also enduring in terms of their aesthetic appeal Centre for the Promotion of Imports from developing countries | May 27, 2010

16. Contemporary– products are ‘modern’ representing the lifestyle of present or recent times, simple lines often combining function and style Furniture: Jan Feb 2014

17. Contemporary Ethnic – products may still relate to an ethnic culture or heritage but are developed to have a modern living contemporary twist, or are contemporary products designedwith an ethnic twist. Centre for the Promotion of Imports from developing countries | May 27, 2010

18. Examples‘Eco-Chic’ recycled natural materials Centre for the Promotion of Imports from developing countries | October 2012

19. Examples ‘Funky’ Centre for the Promotion of Imports from developing countries | October 2012

20. DEFINE YOUR STYLE….. Assignment: As part of the Business Review Process, focusing on your raw materials and production techniques available and the inspiration behind your products, consider the following questions to define your style. Enter your summary in your Log Book. Use visuals and the workshop materials to help you. Prompts: What are the distinctive features that form a thread through your product ranges? How would you define your product ‘style’? Do you have ‘signature’ pieces/collections? If you don’t have a ‘style’, what ‘style’ do you admire or aspire to emulate? Centre for the Promotion of Imports from developing countries | May 27, 2010

21. 1.3: Defining the components of your Brand Your ‘brand’ is more than just a name or a logo. A brand has substance, and value! Your brand is your ‘identity’. Whether you are a ‘design house’ creating and marketing products, a marketing organisation promoting a hand made collection, or a manufacturer or ‘maker’, producing and selling products, your branding needs to reflect who and what your business is about. Remember that your brand has to have integrity and authenticity. Centre for the Promotion of Imports from developing countries | May 27, 2010

22. The Building Blocks of your Brand The building blocks of your ‘identity’ or your ‘brand’ are your ‘values’, your ‘experience’, your ‘story’ (the who, what, why and how) and your ‘style’, your ‘quality’, and your ‘service’. Your brand should reflect the combination of these elements to enable you to position your product/business to your target market, or from the other way around, allow your target market to identify (see) you. Your ‘brand’ should connect with and be attractive to your market and/or target end consumer. It may be that you have not intentionally developed a strong design style, and that your focus is on ‘manufacturing’. If this is your strategy, your ‘brand’ still needs to reflect some of the above elements, concerning, quality, experience, reliability, price, lead times etc. The words you use and the style in which you use them need to reflect your intended positioning. But remember…be authentic.

23. ‘BRAND’ Building (There are Rands in your Brand!) Assignment: As part of the Business Review process, after clearly defining your mission, and your style, consider the following questions to review your ‘branding’ to ensure that it reflects what you want to project about your business- your USP’S, the things about your business that set you apart. Do you promote your product under a ‘brand’ name? Are you focused on being a ‘manufacturer’, i.e. a supplier of customised or ‘sourced’ products, or are you focused on promoting your own brand? Does your ‘brand’ name connect with your ‘mission’? (‘Values, ‘experience’‘story’ and ‘Style’ (design style, quality, your service) Does your brand communicate well what you stand for? Centre for the Promotion of Imports from developing countries | May 27, 2010

24. 1.4 Assessing your Current Business Position Whilst reviewing your business, and whilst you are planning expansion, it is important to understand how your business has reached its current position. This provides the starting point or the platform on which to build. If you are a successful business you will be offering a product that the market wants, at a price that your target market will accept, bringing it to the attention of the market with successful promotion and putting it in place in the market though effective distribution. Most businesses get some of these ‘things’ right to some degree, but all businesses should be aiming to get most of these right most of the time. Centre for the Promotion of Imports from developing countries | May 27, 2010

25. Assessing your Current Business Position, Or ‘Time to look in the mirror’ Assignment: The CBI Business Audit has enabled you to thoroughly evaluate your Current Business Position. Use the audit report and your own observations to summarise your Current Business Position using the following 5 ‘P’ s. (you can add a couple more P’s if you like?): Start plus Post Workshop Assignment PRODUCT: What products do you produce and sell? What is your production process? What is your supply chain? PLACE: What market do you currently sell to? What distribution channel do you currently use? PRICE: What is your general costing and pricing structure? Do you have different pricing policies for different distribution channels? Centre for the Promotion of Imports from developing countries | May 27, 2010

26. Continued PROMOTION: What promotional tools do you currently employ? Do you promote your product under a ‘brand’ name? How is this communicated in your promotional tools? Does your ‘brand’ name connect with your ‘mission’, ‘values’ and ‘Style’? PROFIT: What was the financial position (turnover/profitability) of the business during the last 3 years? What is the projected financial position of the business for the current trading year? (turnover/profitability)?

27. 1.6 Identifying Your Strengths and Weaknesses from your Internal Analysis As an entrepreneur, business owner and or manager, it is important that you know the strengths and weaknesses of your business,as well as identify what opportunities and threats exist. This can be done by performing a SWOT analysis of your business. A SWOT is simply a tool for examining your business analytically enabling you to make a structured action plan. The process of building on your strengths, addressing your weaknesses, taking advantage of your opportunities and defending your business from threats will result in a detailed Action Plan related to product, pricing, production, distribution, promotional tools, human resources, sustainability/CSR policies, and finances, all of which inform and become part of your Export Marketing Plan. Centre for the Promotion of Imports from developing countries | May 27, 2010

28. SoWOT’s this all about?In this first step, the ‘Business Review’, the ‘S’: Strengths, and ‘W’: Weaknesses relate to your ‘internal analysis’ How can you build on the strengths that you have identified? How can you address the weaknesses that you have identified? How can you take advantages of the opportunities that exist? How can you protect yourself from the threats that exist? Centre for the Promotion of Imports from developing countries | October 2012

29. ‘Swotting’ Your Business You need to S.W.O.T. your business! This means “profiling” it so that you can capitalize on the strengths, improve the weaknesses, grab the opportunities and defend yourself against the threats. This may sound like a complex process, but it is fairly straightforward. It means examining your business analytically. Get into a habit of analyzing the strengths, weaknesses, opportunities, and threats of your business on a regular basis. It’s well worth the effort as it will help you understand where you have come from, where you are aiming for, all with a view to developing and growing your business. Involve your business team in this analysis as they will help you see things in different ways. Centre for the Promotion of Imports from developing countries | May 27, 2010

30. SWOT Prompts STRENGTHS Examples – only as relevant Advantages of proposition? Capabilities? Competitive advantages? USP's (unique selling points/propositions)? Resources, Assets, People? Experience, knowledge, data? Financial reserves, likely returns? Marketing reach, distribution, awareness? Innovative aspects? Location and geographical? Price, value, quality? Accreditations, qualifications, certifications? Processes, systems, IT, communications? Cultural, attitudinal, behavioural? Management cover, succession? Philosophy and values? WEAKNESSES Examples – only as relevant Disadvantages of proposition? Gaps in capabilities? Lack of competitive strength? Reputation, presence and reach? Financials? Own known vulnerabilities? Timescales, deadlines and pressures? Cashflow, start-up cash-drain? Continuity, supply chain robustness? Effects on core activities, distraction? Reliability of data, plan predictability? Morale, commitment, leadership? Accreditations, etc? Processes and systems, etc? Management cover,?

31. Continued OPPORTUNITIES Examples – only as relevant Market developments? Competitors' vulnerabilities? Industry or lifestyle trends? Technology development and innovation? Global influences? New markets, vertical, horizontal? Niche target markets? Geographical, export, import? New USP's? Tactics: e.g., surprise, major contracts? Business and product development? Information and research? Partnerships, agencies, distribution? Volumes, production, economies? Seasonal, weather, fashion influences? THREATS Examples – only as relevant Political effects? Legislative effects? Environmental effects? IT developments? Competitor intentions - various? Market demand? New technologies, services, ideas? Vital contracts and partners? Sustaining internal capabilities? Obstacles faced? Insurmountable weaknesses? Loss of key staff? Sustainable financial backing? Economy - home, abroad? Seasonality, weather effects

32. More Exercises……(We’ll get you fit!) Assignment: Using the techniques explained in the workshop and the above Business Review process, and the action plan already developed in the HBAT (CBI Audit process) use the SWOT analysis framework to summarise your strengths and weaknesses. As the process of internal analysis from the above review, and the CBI business audit has been quite extensive, you could use the 7 P’s headings to structure the analysis of your internal analysis- (Product, Price, Promotion, Place, People, Planet, Profit) Consider how you can create an action plan to build on the strengths and address the weaknesses identified. How can you build on the strengths that you have identified? How can you address the weaknesses that you have identified? Centre for the Promotion of Imports from developing countries | May 27, 2010

33. TABLE

34. Now turn your ANALYSIS into an Action Plan ACTION PLAN TABLE (Suggestion) Action Item By Whom By When How Budget (if applicable) Expected Result/Outcome Comments/Carried Over And Finally… Now you can see how simple and logical a SWOT Analysis is. Use it regularly as a business tool to make both big and small decisions. Keep old SWOT’s as references allowing you to build up an incremental picture or history of your progress. I always like to have my Action Plans up somewhere visual for the relevant team members to have sight of, and remember, an Action Plan is only as good as the follow up and follow through.