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How To Analysis A Great Business and

Techniques

Written :
Willy ST.MM
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What We must to know About Business?

Business Strategy and Objectives
There is 4 area for Business Strategy :
 Strategy Analysis
 Strategy Definition
 Strategy Implementation
 Performance Measurement
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What We must to know About Business?

• The GREAT ones are concise and
and crystal clear. They explain:
– WHAT your value-proposition is
– WHY you will win
– HOW you will execute your
Business
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What We must to know About Business?

STRATEGY ANALYSIS - EXTERNAL BUSINESS ENVIRONMENT
Technique 1:
PESTLE analysis
There are several similar approaches used to investigate the global business
environment within which an organisation operates. The most commonly used
approaches to external environment analysis are:
• PEST (political, economic, socio-cultural, technological);
• PESTEL (political, economic, socio-cultural, technological, environmental
(or ecological), legal)
• PESTLIED (political, economic, socio-cultural, technological, legal,
international, environmental (or ecological), demographic);
• STEEPLE (socio-cultural, technological, environmental (or ecological),
economic, political, legal, ethical).
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STRATEGY ANALYSIS - EXTERNAL BUSINESS ENVIRONMENT
Description of the technique 1 :
PESTLE analysis provides a framework for investigating and analysing the
external environment for an organisation. The framework identifies six key areas
that should be considered when attempting to identify the sources of change.

These six areas are:

Political:
Examples of political factors could be a potential change of government, with the
corresponding changes to policies and priorities, or the introduction of a new government
initiative. These may be limited to the home country within which the
organisation operates, but this tends to be rare these days since many changes have an
effect in several countries. The development of bodies such as the European Union and
the growth of global trade and multinational organisations have changed the scope of
political activity. This has increased the possibility of political issues arising that may
impact upon the organisation and how it operates.
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STRATEGY ANALYSIS - EXTERNAL BUSINESS ENVIRONMENT
Economic:
Economic factors may also be limited to the home country, but as global
trade continues to grow, economic difficulties in one nation tend to have a
broad, often worldwide, impact. Examples of economic factors could be
the level of growth within an economy, or market confidence in the
economies within which the organisation operates. The 2008 sub-prime
mortgage crisis in the USA, with its subsequent worldwide impact, is a
good example of an economic situation that affected many organisations.
Socio-cultural:
Socio-cultural factors are those arising from customers or potential
customers. These changes can often be subtle, and they can be difficult to
predict or identify until there is a major impact. Examples could be
demographic issues such as an increase in the number of working
mothers, or consumer behaviour patterns such as the rise of disposable
fashion.
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STRATEGY ANALYSIS - EXTERNAL BUSINESS ENVIRONMENT
Technological:
This area covers factors arising from the development of technology.
There are two types of technological change: there can be developments
in IT, and there can be developments in technology specific to an industry
or market, for example enhancements to manufacturing technology. IT
developments can instigate extensive business impacts, often across
industries or business domains and on a range of organisations. It is often
the case that there is a failure to recognise the potential use of the
technology – at least until a competitor emerges with a new or enhanced
offering. For example, increased functionality of mobile technology or
extended bandwidth for internet transactions can present opportunities to
many organisations. However, the identification of such technological
advances is critical if an organisation is to recognise the potential they
offer.

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STRATEGY ANALYSIS - EXTERNAL BUSINESS ENVIRONMENT
Legal: It is vital to consider factors arising from changes to the law, since
the last decade has seen a significant rise in the breadth and depth of the
legal regulations within which organisations have to operate. Legal
compliance has become such an important issue during this period that
many business analysis assignments have been carried out for the purpose
of ensuring compliance with particular laws or regulations. Some legal
issues may originate from the national government but others, for
example EU laws or global accounting regulations, may operate across a
broader spectrum. One key issue when considering the legal element of
the PESTLE analysis is to recognise laws that have an impact upon the
organisation even though they originate from countries other than that in
which the organisation is based. This situation may occur where an
organisation is operating within the originating country or working with
other organisations based in that country. Recent examples of this have
concerned changes to international financial compliance regulations, such
as the Sarbanes–Oxley Act in the USA and the Basel II Accord.
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STRATEGY ANALYSIS - EXTERNAL BUSINESS ENVIRONMENT

Environmental Examples of factors arising from

concerns about the natural (or Ecological):
environment, in other words the ‘green’ issues,
include increasing concerns about packaging and
the increase of pollution.

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Technique 2:
Porter’s Five Forces
framework
Description of the technique 2
Porter’s Five Forces analysis is
also used to consider the
external business environment,
but it has a different focus from
that of the PESTLE analysis

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Technique 3: Technique 3:
MOST analysis A MOST provides a statement of intent for the
organisation, and is usually created following
Variants/Aliases some strategic analysis activity. It is also used
A variant is VMOST (vision, mission, during the strategic analysis, since it can
demonstrate strength within the organisation
objectives, strategy, tactics). or expose inherent weaknesses.
Description of the technique
MOST analysis is used to analyse MOST stands for:
what an organisation has set out Mission: the rationale and direction for the
to achieve (the mission and organisation.
objectives) and how it aims to Objectives: the goals that the organisation aims to
achieve this (the strategy and achieve.
Strategy: the medium- to long-term plans and
tactics) actions that will enable the
organisation to achieve its objectives.
Tactics: the detailed, short-term plans and actions
that will deliver thestrategy.

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Technique 4: Resource Audit

The term ‘resource analysis’ is also used. Resources

can be:
 tangible resources – financial and physical;
 intangible resources – technology, reputation and
culture;
 human resources – skills, knowledge,
communication and motivation.

Description of the technique

The Resource Audit is used to analyse key areas of
internal capability in order to identify the
resources that will enable business change and
those that will undermine or prevent such efforts
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Technique 5 : Boston Box

Boston Consulting Group matrix or the BCG matrix
The Boston Box was developed by the Boston
Consulting Group (hence,
BCG matrix) to aid portfolio management. The
box is a 2 x 2 matrix with four quadrants .The
axes represent low to high market growth and
low to high market share. The quadrants
represent the following areas:

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Using the Boston Box
The Boston Box is used to assess an organisation’s products and services
according to their market shares and their market growth prospects. The
portfolio of products and services is examined, and each of them is placed
within the most appropriate quadrant. This helps identify strengths and
weaknesses within the portfolio. For example:

When a product has been identified as a ‘dog’ it may be time to remove it

from the portfolio. Even a limited amount of investment in a ‘dog’ may be
a waste of finance that could generate greater benefits if spent elsewhere.
Alternatively, it may be worth considering whether there is any action that
could the situation – perhaps enhancing the product, or selling it in a
different market in order to generate a higher volume of sales or greater
profitability. Both of these courses of action would require investment, so
the prospects for improvement would need to be assessed carefully.
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Using the Boston Box

For example:
Where a product has been identified as a ‘problem child’, action to rectify the
situation will need to be considered; with careful development it may be
possible to move the product into a ‘star’ position. For example, it may be
possible to change the approach to marketing the product in order to
enhance the market’s perception of it and thus increase sales.

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Technique 6 : SWOT analysis

Variants/Aliases
A variant is TOWS analysis (threats,
opportunities, weaknesses and
strengths).
Description of the technique
SWOT analysis is used to consolidate the
results from the external and internal
business environment analysis. SWOT
(see picture) stands for:

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Strengths : the internal positive capabilities of the organisation,
for example financial resources, motivated staff or good market
reputation;
Weaknesses : the internal negative aspects of the organisation that will
diminish the chances of success, for example out-of-date equipment and
systems, unskilled staff or poor management information;
Opportunities : the external factors that present opportunities for
success,
for example social changes that increase demand for the organisation’s
services, or the development of technology to provide new service delivery
channels;
Threats : the external factors that have the potential to harm the
organisation, for example a technological development that could enable
new competitors to enter the market, or economic difficulties leading to a
reduction in market demand.
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Technique 7 : Ansoff’s Matrix
Variants/Aliases : also known Ansoff’s Box
Ansoff’s matrix provides a set of strategic
alternatives that may be considered by
organisations when defining their business
strategy. The Box map new and exiting markets
against new and exiting products, creating a
2x2 matrix :
Four Quadrans are created :
Market Penetration :
This situation is where exiting markets are
targeted for greater penetration by exiting
products. In this approach , organisations
decide to continue with their exiting products
and markets but to adopt tactics such as
additional promotion, increased sales efforts or
revised pricing approaches in order to generate
increased market share. 18
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Technique 7 : Ansoff’s Matrix
Four Quadrans are created :
Market Development:
In this situation the organisation adopts a strategy of
exploring other markets for its products. This may mean
targeting new markets in other countries, or applying
the products to different markets within the exiting
geographical areas of operation.
Product Development:
This strategy involves developing new products or
services, and trageting exiting markets. Another
approach to it would be to add further, related features
to exiting products and services.
Diversification:
The most radical strategic alternative is to develop new
products or services and target new markets. This is a
risky strategy to adopt, since it does use existig expertise
or leverage the current customer base.
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Type Of Plan Depends On Type Of Business

• Capital intensive
businesses:
– Require abundant
planning and risk
management
– Ex.: mining,
manufacturing, food
services, data centers
• => Create detailed
business
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Type Of Plan Depends On Type Of Business

• Less capital intensive
– Need to be nimble and
adapt strategy
– Excessive planning an
impediment to agility
– Ex.: internet start-ups,
service businesses
• => Create less-detailed
business
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Elevator Pitch
• Concise description of
your value proposition
– What your product does
and why people will want it
– Less than 30 seconds
– If you can’t explain your
value in 30 seconds, you
don’t know what it is
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Your Value Proposition

• What is your product/service and why do people
want it?
• NOT a list of features
• NOT generalities
• An explanation of
– WHAT the product/service is
– WHAT problem it solves, and
– WHY people will choose it over the competition
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Your Value Proposition (Cont.)

• There are only three ways your product/service can
win:
1. It’s better
2. It’s cheaper, simpler, faster
3. You will outsell, out-market, or out-execute your
competition
• You need to know (and say) which your value
proposition is
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Your Market Opportunity

• How much of your product or service will you sell?
– Who are your potential customers?
– How much do they spend?
– How much share can you get?
– Sources include census bureau, associations, syndicated
research, analyst reports
• How much is spent on your product/service and how
fast is this spending growing?
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Your Market Opportunity: Key Trends

• Any major changes that will help or hurt you?
– New technologies, new habits (Britannica vs Wikipedia)

• What forces are driving or slowing down growth?

• If any major risks, ADDRESS THEM

– Why, despite the changes, will you still win?
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Showing Your Market Opportunity

• Use charts, graphs when
they tell the story better
– Easier to digest
– But beware hockey-stick
charts
• Investors will not take you
seriously if you present them
with silly financial graphs
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Use Graphs, Charts To Tell Your Story

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The Competition: Why Will You Win?

• What companies are getting your future revenue?

• Why will people use your product instead?

– Product differentiation (better or cheaper?), marketing,
distribution?

• How, specifically, will you will beat your competitors?

– Likely the first question from many doubters (friends, family,
customers, investors) in the first few years

• How will you keep winning once your competitors adapt?

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How Will You Execute?

• Who are the key members of your team?
• What will they do?
• What are your milestones and when will you achieve
them?
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Why Is Your Team GREAT?

• Describe past accomplishments of senior team
members
– Startup experience is helpful and important

• Your “Management” slide should make reader think,

“Wow, these people really know what they’re doing”
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Example: Business Insider Team

Henry Blodget, co-founder, CEO, and Editor In Chief. Kevin Ryan, co-founder, Chairman. Kevin is
 Prior to co-founding the company in 2007, Henry CEO of AlleyCorp, a network of affiliated
was CEO of Cherry Hill Research, a consulting firm, Internet companies Kevin has co-founded
and a contributor to Slate, Newsweek, New York, in the past two years. Prior to AlleyCorp,
Fortune, NPR, Bloomberg, CNBC, and other Kevin was president and CEO of
publications. Previously, Henry was the top-ranked DoubleClick.
Internet analyst on Wall Street and the head of
Merrill Lynch's global Internet research team.

Julie Hansen, Publisher and COO. Julie has a Dwight Merriman, co-founder, Technology
decade of experience monetizing vertical web Advisor. Dwight co-founded DoubleClick
businesses. Prior to SAI, she launched the new and served as its CTO for ten years. He co-
NCAA.com web site at CBS College Sports. founded Panther Express and ShopWiki and
Previously she ran the magazine-branded web is also a board member of the web
sites at Condé Nast and built the #1 web site photo/video sharing company Phanfare.
for golfers at Time Inc.

Paul van de Kamp, VP, Advertising Sales. Paul Bridget Williams was most recently VP of
previously was Sr. Director, East Coast Sales at Platform Sales at startup ad network
Rockyou, Inc., and prior to that, handled ShortTail Media. Prior to that she handled
business development and digital ad sales at business development for SharedBook and
Wired Digital. was sales manager at New York Times
Digital.

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Financial Projections
• Revenue and expense projections for the next 5 years
– Driven by detailed (but not ridiculously so) assumptions
– Revenue = number of products X price
– Expense = people, rent, stuff, marketing, distribution
• Avoid over-precision
• Choose reasonable (not wildly optimistic)
assumptions
• Include a summary page that lays out assumptions
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How Much Money Will You Need?

• Projections should be tied to capital raising
• Explain how new funds will be used:
– $200,000 to purchase machinery
– $20,000 annual hosting costs
– $40,000 for office computers, furniture, and first year rent
– $100,000 sales and promotion expenses

• Show how long new cash will last for

– How much will you require in the future and when?
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BONUS: Perfecting The Art Of The Elevator Pitch

A convincing elevator pitch

is critical

Don't mess it up
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Elevator Pitch: The Hook

• Goal is to make listener
want to have a real
meeting with you
• Listener will listen for 30
seconds, max
• It may not sound fair,
but that’s all the time
you’re going to get
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Elevator Pitch: What and Why

• What will your
company/product do
and why will it win?
• Be specific
• Avoid extraneous details
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Elevator Pitch: ONLY The Highlights

• Do NOT explain how
your product works on a
technical level
• Do NOT talk about a
huge, growing market
• You can deal with the
specifics after the
listener is interested
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Elevator Pitch: What Makes You Different?

• If your product is new,
explain how it fills an
unmet need.
• If you're improving on
an existing idea or
model, explain how
you're better.
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Elevator Pitch: Back It Up With Data

• Demonstrate your
product's awesomeness
with one or two specific,
relevant data points
• Know the data that
matters to investors and
show it off
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Elevator Pitch: The :30 Rule

Your pitch should be

under 30 seconds!
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Elevator Pitch: Confidence Comes From Practice

• Confidence is one of the
most important secrets
to a killer pitch
• Confidence comes from
practice and refinement
• Adapt pitch based on
experience and
feedback
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Thank You!

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