With the evolving health and economic crisis flowing from COVID-19, there is a need for organisations to reassess and reanalyse their market – since it has likely changed through the course of 2020.
As well as understanding your customers, competitors, internal issues, market size and trends, it is useful to use a robust tool to analyse the market context. Analysis of these issues forms the market assessment which should make up a significant part of the overall strategic plan. How much has the COVID-19 health and economic crisis changed these dynamics in your market?
This analysis will help you to translate in to what is realistic and necessary to achieve in your strategy.
We wrote last month about the SWOT and SOAR models. SOAR stands for Strengths, Opportunities, Aspirations and Results, and is a more contemporary future-focused version of a SWOT.
One of the most common business tools that is used to understand market context is a PESTEL analysis. It is taught in business schools all over the world. PESTEL looks at trends and issues from politics, economy, social trends, technology, environment and legal. For most organisations there are probably a couple of these areas that have a major effect, some a minor, and some might not be relevant at all.
PESTEL provides a framework to think about both the requirements and issues that are changing in your business environment. When used in conjunction with a SWOT/SOAR analysis, some issues may overlap, but each tool will highlight different issues.
A broader and more comprehensive tool that can be used instead of the PESTEL analysis is the Context Canvas, which is a more contemporary model. Designed by Designabetterbusiness, this model encompasses the elements of PESTEL, along with some new ones: customer needs, competition and uncertainties.
Tools like PESTEL and SOAR are about the Board and executives thinking big picture about the issues and dynamics that will impact the operating environment in the short, medium and long term. As well as thinking about the direct and obvious (how many times will the NDIA change the price guide this year…), organisations should be thinking about the megatrends. What will be the impact of demographic shifts, digitisation, etc on customers, competitors and the workforce? Where might the possible disruptors come from?
It is easy for organisations to become too dependent on looking at government as the key stakeholder and miss other external perspectives and issues. The risk is that your miss the other sources of influence on your organisation – so using tools like this in the strategy process is an opportunity to look up, look out and look more broadly.
Here’s an example of the Context Canvas used with a regional sole trader providing therapy services to NDIS and non-NDIS clients.
We trust that this article has got you thinking more about the benefits of using a Context Canvas or PESTEL model.
To make the learnings from this article more real, why not delay whatever you were planning on doing next just for 15 minutes and have a think about where your business is now. If you are like me, then pick up a pen and paper and put the headings of this model across a page or open up a Word document and create a table. Then take some time to write some points about the trends and issues within each category that impact on your organisation.
We’ve heard from many organisations at the moment that they are needing to review their current strategy as a result of the continually changing environment we find ourselves in with COVID-19. How have the dynamics changed since COVID-19 hit? Are some issues becoming more or less important as a result? What new issues are emerging?
There’s never been a better time to stop for a few minutes and think about your strategy. I guarantee that the time spent writing this down now will provide some greater clarity for you on the priorities for coming weeks and months.
CBB has a number of consultants with experience in using different business modelling tools as part of the strategy development process. We could help you with the whole strategic planning process, or just to workshop one or a few elements like this.
If you’d like any assistance with reviewing or developing elements of your strategic plan, please contact 1300 763 505 for an obligation free consultation with one of our Business Consultants.