Articles
Competitor Analysis
Analysis of the competitive environment is one of the key stages of strategic planning. It is the competitive environment that allows obtaining necessary information about the state of the market, identifying possible threats, and determining probable prospects. This stage is extremely important when launching a new project, deciding to expand the geography of business, or launching a new product.
At the same time, analysing competitors is an important procedure even without an aggressive stage of business development. Studying competitors, identifying their weaknesses and strengths allows you to develop the most effective strategic solutions that will ensure high competitiveness of the company or product. Analysing competitors' activities is necessary for making a forecast of your own development, identifying the risks present in the market. At the same time, a qualitative and professional approach to the study of competing companies and competitive products is the basis for determining the company's own potential and the capabilities of its own product. Analysing the competitive environment consists of several stages:
- identification of the company's competitors;
- determination of competitors' objectives;
- determination of competitors' strategies;
- identification of competitors' weaknesses and strengths;
- forecasting the development of the market situation.
The first stage is fundamental to the implementation of the entire competitive analysis procedure. In addition to identifying existing competitors, it is necessary to determine the likelihood of the emergence of new competitors and build a forecast of the market reaction to changes in the competitive environment. This allows to prepare the company for sharp market changes, which is an essential condition for an effective strategy of company or product development.
At the second stage, competitors' objectives are identified. The objectives are not always on the surface. For example, a competitor may be a company that uses dumping policy in one of the market segments in order to gain the loyalty of customers or consumers to sell its products in another segment. It is in the hidden objectives that competitors' vulnerabilities are usually found.
The strategy of competitors is determined on the basis of their objectives. Analysing competitors' strategies allows you to predict the development of the market situation and prepare your own strategy, taking into account possible changes. Qualitative performance of this stage of competitor analysis provides the company's management with the necessary information to prepare proactive manoeuvres in the competitive struggle.
The analysis of competitors' strengths and weaknesses is necessary for planning the company's own development strategy, i.e. choosing the most promising options for influencing competitors in order to realise its own goals.
The last stage of competitor analysis is the forecasting of competitors' reaction to changes in market conditions. This is the most complex and responsible stage of competitive analysis. The forecast includes the variability of the Company's actions in this or that situation, which allows minimising risks from the activities of the main competitors.
The procedure of competitive analysis is necessary for minimising investment risks and making reasonable managerial decisions. In many respects, the analysis procedure is based on forecasting the development of the market situation. Therefore, competitive analysis should be performed by professional and competent consultants with practical experience.
Finding, maintaining and retaining customers
The customer base is the main factor that determines the profitability of a business. A stable client base enables accurate forecasting of the organisation's financial performance and customer loyalty, which is the most important asset of a business
The customer base is the main factor that determines the profitability of a business. A stable client base makes it possible to accurately predict the financial performance of the organisation and customer loyalty, which is the most important business asset.
Attracting new customers allows you to significantly expand the company's activities, increase its turnover, as well as popularity in the market. It is no secret that the so-called ‘word of mouth’ is the most effective channel of communication with potential customers. At the same time, the process of such communication cannot be launched independently, it is necessary to use traditional marketing tools. Only over time, if traditional channels have been applied at a high professional level, customers will recommend the product to their neighbourhood.
Of course, this applies to quality products with high competitive characteristics, while price may not be such a characteristic - many consumers are willing to pay for prestige and exclusivity in addition to quality and reliability. In order for the sales system, especially at the start-up stage, to work most successfully, it is necessary to prepare a highly accurate marketing strategy. Before that it is necessary to study the market, its conjuncture, market leaders and potentially successful players, the distribution of market shares between them, the dynamics of distribution in recent years, the impact of foreign economic factors on the distribution of the market. The product itself, its place in the market product line, the availability of modernisation opportunities according to market needs are also subject to analysis. Only after a comprehensive market analysis is the marketing strategy to be developed. It includes branding, visualisation and basic information messages to the target audience. Positioning strategy, mission and vision are developed, communication and sales channels are formed.
Attracting customers is a long-term and resource-intensive process, the results of which form the sustainability of the business. The most important task of any company is not only to attract customers, but also to retain them. A permanent customer base ensures stabilisation of business turnover and simplifies the forecasting process, which accompanies management decision-making. There are a lot of methods to form customer loyalty, adherence to a product or brand, the correct use of which gives a high result. As practice shows, the cost of customer support pays for itself in full. However, for the effective operation of this business process, at the start-up stage it is always necessary to engage highly qualified specialists. The implementation of such projects begins with a comprehensive audit of the company's activities.
The study of the market strategy of competitors and market conditions provides the choice of optimal tools for the formation of a positive image of the company, support and retention of customers. Special attention in the work is paid to fixing the competitive advantages of the product and brand, creating a coherent and convincing image to ensure the stability of the business in the medium and long term.
Creating a Sustainable Development Programme
Business success depends on many factors, but creating a sustainability programme is at the top of the list. The company's market positioning strategy, methodology of working in a competitive environment and mission determine its stability in the long term.
Baseline development strategies are usually used to identify one or more elements, based on changes in which the degree of business sustainability is determined. These elements are product, technology, industry, and the company's position in the market. Each of the elements can be in several states: permanently static, temporarily static and dynamic.
Such an approach to creating sustainability programmes has existed for quite a long time. In the last decade, corporate governance experts have been using it only as a primary tool for defining strategy, which in each individual case is determined on the basis of an individual approach that in some cases takes into account up to several hundred parameters. In addition, the basic approach is suitable only for defining strategy in the short term, which does not allow us to talk about the real sustainability of the business.
Medium-term and long-term planning forms should take into account business expansion and the creation or joining of new structures, change of suppliers and logistics channels, changes in sales channels, expansion of the product line, development of new markets, etc. It is also necessary to take into account the possibility of applying scenarios of business reduction, its preparation for sale at the peak stage of development, the onset of which is determined by analytical tools.
An integrated approach allows to ensure business predictability, prepare for various market scenarios, stabilise and fix profits. The creation of a sustainable development programme takes place in several stages:
- conducting a comprehensive audit of the enterprise;
- analysing the competitive environment;
- formation of a marketing strategy;
- feasibility study of projects;
- attraction of investments;
- organisation of control measures;
- provision of consulting services on a subscription or ad hoc basis.
Attracting financing and lending
Attracting financing and organising lending is a necessary component of any business development. If a company is planning to implement a new project, buy assets, modernise or restructure production, then very often in these cases the company needs debt financing, as in most cases it does not have enough funds to perform such large-scale tasks.
The financial services market in Russia is gradually developing, and the opportunities for choosing optimal financing methods are increasing from year to year. On the other hand, there are also limiting factors - instability in the economy, tougher requirements of financial institutions to the borrower. Nevertheless, an experienced consultant can successfully solve all these problems and choose the optimal form of project financing.
The tools for attracting financing are currently diverse - debt financing, IPO, secondary placement of shares, project financing, financing on the terms of public-private partnership, etc. The choice of a suitable instrument depends on the specifics of the company and the project to be implemented, on the scope of activity, scale and credit history of the company, its reputation and time of work in the market.
A key factor in attracting financing and organising lending is the company's financial transparency. It is important for financial and credit organisations to know information not only about financial results, but also about owners, share capital and corporate governance. Each financial institution may impose its own specific requirements to the information provided by the borrower. Often specific requirements are imposed on companies applying for budget financing.
Finding the best use of the property
Nowadays, the right choice of productive use of real estate objects is the main factor affecting the market value of a property. A detailed analysis of the concept of ‘development’ gives a clear picture of the volume of construction, type, format and class of real estate.
In Russia, the problem of property development, its principles and significance are increasingly becoming the main topic of discussion among specialists in economics, finance and law. At the same time, from staged works devoted to the description of the process and structure of development, the matter is gradually moving to a more in-depth analysis - identification of the main tools of the ‘developer's’ approach to the implementation of investment and construction projects. Conducting an analysis based on the following factors determining the optimal use of land includes:
- carrying out a general study of the site/project location;
- analysing the potential of the location and transport accessibility;
- analysing the outlook for market demand for the proposed use, types of taxes and other conditions;
Re-engineering of internal processes. Preparation of internal instructions and regulations for employees
Business process re-engineering is carried out to radically redesign business processes in order to achieve the maximum effect of the company's production, financial and economic activities.
Reengineering is formalised by relevant organisational, administrative and regulatory documents. Reengineering of business processes is usually carried out in two stages:
1. determination of the optimal type of business process;
2. determination of the best (in terms of means, time, resources, etc.) way of transferring the existing business process into an optimal one.
Internal documents of the company ensure the solution of tasks in the form of protocols, acts, memos, etc. They are prepared, drawn up and executed within the institution itself.
Internal documents of the organisation are created according to the same scheme as outgoing documents: a draft text of the document is prepared, it is coordinated with the interested officials and finalised according to the comments; the final version of the document is printed and signed by the head. After registration, the document is reproduced in the required number of copies (by the number of executors). Copies of the document are certified and passed for execution to structural subdivisions (responsible executors).
Internal documents are documents that are created within the organisation and used within its walls. According to internal documents, the company's employees are obliged to establish and comply with the rules of internal quality control of work. Internal instructions include:
- a document on the structure and staffing levels (this document fixes the name of structural divisions of organisations and positions, as well as the number of staff units, each position);
- staff schedule (a document that defines the position and number of employees and the salary fund of the organisation as a whole);
- job description (the main organisational and legal document defining the tasks, functions, main duties and responsibilities of employees);
- employment contract (a document that records the parties' agreement to establish labour relations and regulates these relations).
Expertise and cost reduction
Cost management is one of the tools of financial management. Professional cost management contributes to increasing the profitability of production, increasing the competitiveness of products.
Today's growing markets are driving up prices for energy, equipment, labour and capital. All this leads to an increase in production costs. Therefore, in the current economic environment, the problem of cost reduction is the most pressing for large industrial enterprises. Companies are forced to look for opportunities to reduce costs and increase business profitability. Large companies with a multidimensional cost system and voluminous accounting system need a professional approach to cost reduction.
Cost reduction and cost expertise implies:
- A systematic approach to determine the real costs required to maintain production processes;
- analysing the cost structure;
- identification of opportunities to optimise financial costs;
- development and implementation of the company's strategic policy to reduce production costs;
- organising a system for tracking opportunities for optimising production costs;
- carrying out an expert examination of the costs of main production, auxiliary production and service production.
All these processes are controlled by financial management, but in many companies cost reduction management is not allocated as a separate function. As a result, the efficiency of cost management, despite the great potential of this process, is not high at many domestic production enterprises.
Increasing the transparency of management and financial reporting
Management and financial reporting is the main source of information about a company's activities. This information is demanded by its investors, management, shareholders, and government agencies controlling the markets. Transparency of management and financial reporting implies full disclosure of reliable information about all areas of the company's activities. This information is provided to stakeholders for making managerial decisions. That is why reporting should be understandable and easy to read, which implies the application of certain standards of reporting.
Comprehensible management and financial reporting helps to solve a number of strategic tasks facing the company's management. Tom management of the company uses reporting to disclose financial risks, identify additional opportunities for the company, and improve the efficiency of its operations.
Reporting on the company's activities is also a tool for attracting financing. Financial institutions, in view of the global economic turmoil, have sharply tightened requirements to borrowers. In addition to the financial performance of the company, banks and investors pay increased attention to the efficiency of management activities of companies. Therefore, clear and well-structured management reporting is of great importance when preparing investment documentation for the purpose of obtaining financing.
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