developing business strategy

Helpful Tools for Developing Business Strategy

Here are helpful tools that can help you in developing a business strategy:

1. SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats Analysis

2. SWOT Matrix

3. Porter’s Five Forces

4. Industry Analysis: Porter’s Five Forces Model

5. Business Plan Checklist

6. Business Plan Template 

Let us discuss each of these in detail below:

Helpful Tools for Developing Business Strategy

1. SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats Analysis

Strengths and weaknesses are the internal factors of the business. These are also called internal analyses. Strengths and weaknesses refer to the nature of the business, its resources, and its capability to meet the competition. Opportunities and Threats are the external factors of the business. These are also called external analyses. 

Opportunities and Threats refer to ‘External Factors’, outside of your business that can boost your business growth or otherwise. These include factors like, demographic changes, technological developments, availability of raw materials and labor, etc. 

2. SWOT Matrix

SWOT analysis can be represented as a matrix in which one axis represents the strengths and the other axis represents the weaknesses. The third axis can be also be used to represent opportunities, and the fourth axis can be used to represent threats. This matrix will help you in analyzing the business strategy. 

3. Porter’s Five Forces Model

Porter’s model is a technique to analyze the industry in which you want to start your business. The model assumes that certain key elements affect the business; these elements are called Porters’ Five Forces. 

The five forces are: 

  • Bargaining Power of Suppliers: This refers to the bargaining power of suppliers who can impact costs and quality of inputs required by a business
  • Bargaining Power of Buyers: This refers to the bargaining power of buyers who can impact the prices of goods and services provided by a business.
  • The threat of Substitutes: This refers to the potential threat posed by substitute products or services.
  • The threat of New Entrants: This refers to the threat posed by new entrants into an existing market.
  • Rivalry among Existing Competitors: This refers to rivalry among existing competitors in an existing market

4. Industry Analysis: Porter’s Five Forces Model

In this model, each element is studied individually and then compared with other elements to arrive at a strategic position for your business within an industry. The five forces are studied from both, buyer’s perspective as well as from the supplier’s perspective, also from your perspective i.e., your capability/strength as well as from that of the competitors in the industry. 

5. Business Plan Checklist

This tool provides you with a checklist for preparing your business plan effectively and efficiently so that all important aspects are not missed out while preparing your plan, and hence, you do not have to make any changes afterward. 

Thus, it is a vital tool for developing a business strategy as it helps you to analyze your business extensively, concerning internal and external factors. Also, this model helps you to estimate the revenue and costs of your business and also allows you to assess the strength of the business (strengths, weaknesses, opportunities, and threats analysis), thereby providing you with a clear view of how strong your business is in the industry.

6. Business Plan Template

This template provides you with a basic model for preparing your business plan. Besides, it is just a framework for planning your business strategy; you will also have to fill in the details according to your requirements. 

Click to rate this post!
[Total: 0 Average: 0]

Leave a Reply

Your email address will not be published. Required fields are marked *

why is negotiation important in sales Previous post Why is Negotiation Important in Sales?
how to build business plan Next post How to Build Business Plan for Startups