Tools to use before starting your OGSM
The BCG Matrix is a key tool for strategic marketing. It works as a growth matrix that analyses which products or services are the most profitable for a company and what their estimated growth potential is. This way, you can determine the best sales strategies. The BCG matrix evaluates products or services by the growth rate of the market and the market share rate. It is composed of 4 different elements:
- Star: Products with high growth, providing the company with a high share of their respective market. They generate good profits.
- Cow: Products that have a high market share, but offer little growth. They are most likely old products, consolidated in their sector. Solid source of income that requires little investment.
- Dog: Products or business units that generate little revenue and have a poor market position and low growth.
- Question mark: Product offering high growth prospects but low market share.
Porter’s five forces
The Five Forces model was created by management theorist Michael Porter in 1979. This model allows companies to measure and analyse their relative level of competitiveness and select the right strategies to take advantage of market opportunities and minimize threats. These 5 forces are:
- Bargaining power of customers: the power that customers have over the company or over a certain sector, e.g. the availability of alternative choices.
- Bargaining power of suppliers: the power of providers and suppliers within a certain sector. The greater the bargaining power of the suppliers, the lower the profitability and attractiveness of the sector.
- Threat of new entrants: threat of new competitors to current companies within an industry.
- Threat of new substitute products: existing or developing products and services that can perform the same functions.
- Rivalry between competitors: competition between the companies that are currently in the market. This is the result of the other four forces.
Based on these five forces, your company can select strategies that help it stand out in the market.
The Ansoff matrix is an analysis tool used to identify how products fit into markets. It focuses on identifying a company’s growth opportunities. This tool is divided into four quadrants:
- Market development: Finding a new channel or target audience to sell the products or services that the company already has.
- Diversification: Launching new products or services. It’s the most challenging strategy but also the one with the fastest growth.
- Market penetration: Increasing the sales of the company with the current markets and products (e.g. through advertising).
- Product development: Developing new products in new categories. The purpose of this is to introduce products or services to the market to expand the portfolio or to make a better version of a previously existing product.
- Political: Government policies at a local, regional, national and international level that directly affect the company, such as trade agreements and political party programmes.
- Economic: Economic developments such as purchasing power, interest rates, inflation, income levels, unemployment rate, among others.
- Social: This concerns factors in terms of culture, educational level, religion, beliefs, and consumption habits that may affect your product’s attractiveness.
- Technology: Factors related to the evolution of technology, such as digitalisation and (disruptive) innovations.
- Environmental: Factors related to environmental conservation, climate adaptation and mitigation, and sustainability requirements.
- Legal: Concerns any legal regulations which may positively or negatively affect your company and its products or services.
A Customer Journey describes the full process a consumer or client goes through to when purchasing a product or service. It should document the full experience of being a customer, from learning about the product to the purchase, as well as the dimensions of customer support and follow-up interaction. The Customer Journey should contain every type of interaction, all the channels and elements through which a potential buyer goes before, while, and after purchasing a certain product or service. The typical Customer Journey has 5 different stages:
- Awareness: How potential customers become aware of a product. This could be through word-of-mouth, or marketing such as TV commercials and online advertisements.
- Consideration: This phase describes the time the potential customers spend considering the purchase of a certain product. Before making a decision, they will research the product and brand. They may, for example, read online reviews and blog posts, and talk to friends.
- Purchase: This phase describes the different options for the customers to obtain your product or service. For example their interactions with your website, physical store or a third-party webshop.
- Retention: After the customers purchase the product, they may choose to build a relationship with the brand, for example by joining a loyalty program, signing up for newsletters, and becoming part of a community.
- Recommendation: If the customers are happy with their purchase, they can recommend it to other people by word of mouth or posting on social media.
The SWOT analysis is a tool to analyze the (internal) strengths and weaknesses, and the (external) opportunities and threats of an organisation relative to its competitors. This helps to overcome challenges and take advantage of new opportunities.
- Strengths: Internal attributes and resources that could make the company successful.
- Weaknesses: Internal attributes that could create disadvantages. These are areas of improvement for your organisation.
- Opportunities: External factors that the company can take advantage of, such as increasing demand for a certain product or service.
- Threats: External circumstances that could hurt your business, such as economic conditions or new competitors.
All of these tools can help you to analyse your business plan and the current situation. But how can you come up with the right strategy to make your business successful?
The next step to strategic success: OGSM
After you’ve conducted your analyses, you’re in the perfect position to make a strategic plan in OGSM format. OGSM is a strategic planning method that helps you concretise your plans, dreams and ideas and make them achievable. OGSM is easy to use, effective, and complete, leading to an executable plan on one page. The method can be used both for organisations or individual life goals. More than simply creating a plan, OGSM also guides you through the steps to make your goals actionable: because realising your dreams is even more fun than dreaming them.