How to evaluate the capabilities of your company?
In business, you have to measure the strength of intentions. Therefore, even before the commencement of operations should well recognize the possibilities of your company. How to do it? The answer can be found in today's article.
How to evaluate the capabilities of your company?
What are the business opportunities?
To assess the capabilities of the company, you first need to know what in general are business opportunities. Basically the possibilities are advantages, so that your company can meet the needs of customers. American author David Sexton in the book Marketing distinguish between the possibilities and benefits. According to Sexton, "the benefits are what customers expect," while the possibility of "produce benefits." This distinction is very important, but we will return to this in a moment.The American author distinguishes three types of opportunities:
- skills or unique abilities, experience or expertise in a particular industry, know-how, etc resources at the disposal of a company;
- These are human resources, material, financial, infrastructure, resources, knowledge and imagination;
- the characteristics of a product or service, eg. speed of the car, the ceiling of the aircraft, the alcohol content of the beverage, the product looks like.
Why identify business opportunities?
Entrepreneurs do not always appreciate the importance of identifying the capabilities of your business. Part novice traders counted because that their passion and enthusiasm immediately provide to their clients. Of course it can happen, but customers do not always share the euphoria of business owners, and then the beginnings of business can be difficult. Identify opportunities helps the company avoid such a situation, because it gives enterprises a number of advantages. Here are the main ones that quote by American author David Sexton:
- Evaluation of the possibilities will allow you to respond to customer needs. Understanding customer needs does not mean that you have them all happen. If customers expect pharmaceutical companies invent a drug that rejuvenation, that does not mean that they have to do it. Recognition of their abilities will allow you to answer the question, however, to what extent you are able to meet the needs of its customers.
- Evaluation of the possibilities will determine the location of your business to the competition. Once you assess the capabilities of your business, you will be able to compare them with the capabilities of competitors. This will tell you, what you do better than the competition, and what should be improved.
- Evaluation of the possibilities will allow you to determine what market share can get. If you evaluate your options realistically, you can estimate if you can achieve the expected market share. If you find that you do not you can think about how to increase the capabilities of the company to increase its market share.
How to evaluate the capabilities of the company?
Evaluation of the possibility of nothing else but to determine its strengths and weaknesses. How to do it? Sexton proposes a four-step model for assessing business opportunities:
- Create a list of business opportunities,
- Define your target competitors,
- Rate the results of each of the possibilities in comparison with the competition. Use a scale from 1 to 5 (1 to result the weakest and 5 the best). Each option marked the result of 4 or 5 is a strength of the company, and the possibility of the result of 1 or 2 weakness. Determine the impact of each option is for the benefit for the customer.
Let us explain this on the example of a car wash on the outskirts of the city of medium size. The list of possibilities such washing may include elements such as the speed of the car wash, the range of services through the wash, the price for a single wash, location, etc..
Competitors such companies will all car washes operating in the same city. If a company car washes much faster than the rest of the car wash is a result of the possibility of "speed car wash" will 5. impact of this option on the benefits for the customer it is that the driver quickly regain cleared auto. The weakness of such a company, however, is the location assessment of this possibility will therefore 2. The location on the outskirts of the city has a small impact on benefits for customers, because customers from the other end of the city would have to spend a lot of time to get to the car wash, which is on the other end of town When assessing the capabilities of your business you should remember a few rules. The most obvious is that to focus only on the capabilities of the company.
This seems trivial, but as rightly observed by Sexton many people entered to the table everything they can think of, and which has little to do with the capabilities of the company. Some confuse it with the possibility of benefits, which and this is the second principle should not be doing. Recall that the benefits are related to the client's expectations, and the possibilities are what you can do to meet those expectations. Wynotowanie itself needs little will tell you, if not you judge the extent to which your company will be able to fulfill them. Also, remember to honestly evaluate the capabilities of your business. Optimism helps a lot in life, but the assessment of business opportunities must be real. Otherwise, the state with a list of wishful thinking, not a thorough analysis.
Competitive advantage and benefit advantage
Evaluation of the possibility of helping to determine what your company has an advantage over the competition. The possibility of the company are in fact only relevant if it so you are able to create value, which does not produce your competitors. Sexton, however, distinguishes between competitive advantage and benefit advantage. According to the US's competitive advantage is the ability, through which the company is able to provide customers with at least one benefit at a higher level of competition. In turn, the advantage of the benefits is that the company provides customers with the most important advantage from their point of view. Relations competitive advantage and benefit advantage therefore rely on the fact that the competitive advantage should lead to the predominance of benefits.
To sum up: good recognition capabilities of your business greatly helps to create effective marketing strategies and prepare a plan to compete with competitors. If you have not already done so, you strongly encourage you to. We hope that the advice from this article will help you recognize good opportunities for your business.