MANAGEMENT

Management in all business and human organization activity is the act of getting people together to accomplish
desired goals and objectives. Management comprises planning, organizing, staffing, leading or directing, and
controlling an organization (a group of one or more people or entities) or effort for the purpose of
accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial
resources, technological resources, and natural resources.

Theoretical scope

Mary Parker Follett (1868–1933), who wrote on the topic in the early twentieth century, defined management
as "the art of getting things done through people". She also described management as philosophy.[2] One can
also think of management functionally, as the action of measuring a quantity on a regular basis and of adjusting
some initial plan; or as the actions taken to reach one's intended goal. This applies even in situations where
planning does not take place. From this perspective, Frenchman Henri Fayol[3] considers management to consist
of seven functions:

1. planning
2. organizing
3. leading
4. co-ordinating
5. controlling
6. staffing
7. motivating

Some people, however, find this definition, while useful, far too narrow. The phrase "management is what
managers do" occurs widely, suggesting the difficulty of defining management, the shifting nature of
definitions, and the connection of managerial practices with the existence of a managerial cadre or class.

One habit of thought regards management as equivalent to "business administration" and thus excludes
management in places outside commerce, as for example in charities and in the public sector. More
realistically, however, every organization must manage its work, people, processes, technology, etc. in order to
maximize its effectiveness. Nonetheless, many people refer to university departments which teach management
as "business schools." Some institutions (such as the Harvard Business School) use that name while others
(such as the Yale School of Management) employ the more inclusive term "management."

English speakers may also use the term "management" or "the management" as a collective word describing the
managers of an organization, for example of a corporation. Historically this use of the term was often
contrasted with the term "Labor" referring to those being managed.

Basic functions of management

Management operates through various functions, often classified as planning, organizing, leading/directing, and
controlling/monitoring.

• Planning: Deciding what needs to happen in the future (today, next week, next month, next year, over
the next 5 years, etc.) and generating plans for action.
• Organizing: (Implementation) making optimum use of the resources required to enable the successful
carrying out of plans.
• Staffing: Job Analyzing, recruitment, and hiring individuals for appropriate jobs.
• Leading/directing: Determining what needs to be done in a situation and getting people to do it.
• Controlling/Monitoring, checking progress against plans, which may need modification based on
feedback.
Formation of the business policy

• The mission of the business is its most obvious purpose -- which may be, for example, to make soap.
• The vision of the business reflects its aspirations and specifies its intended direction or future
destination.
• The objectives of the business refer to the ends or activity at which a certain task is aimed.
• The business's policy is a guide that stipulates rules, regulations and objectives, and may be used in the
managers' decision-making. It must be flexible and easily interpreted and understood by all employees.
• The business's strategy refers to the coordinated plan of action that it is going to take, as well as the
resources that it will use, to realize its vision and long-term objectives. It is a guideline to managers,
stipulating how they ought to allocate and utilize the factors of production to the business's advantage.
Initially, it could help the managers decide on what type of business they want to form.

How to implement policies and strategies

• All policies and strategies must be discussed with all managerial personnel and staff.
• Managers must understand where and how they can implement their policies and strategies.
• A plan of action must be devised for each department.
• Policies and strategies must be reviewed regularly.
• Contingency plans must be devised in case the environment changes.
• Assessments of progress ought to be carried out regularly by top-level managers.
• A good environment and team spirit is required within the business.
• The missions, objectives, strengths and weaknesses of each department must be analysed to determine
their roles in achieving the business's mission.
• The forecasting method develops a reliable picture of the business's future environment.
• A planning unit must be created to ensure that all plans are consistent and that policies and strategies
are aimed at achieving the same mission and objectives.
• Contingency plans must be developed, just in case.

All policies must be discussed with all managerial personnel and staff that is required in the execution of any
departmental policy.

• Organizational change is strategically achieved through the implementation of the eight-step plan of
action established by John P. Kotter: Increase urgency, get the vision right, communicate the buy-in,
empower action, create short-term wins, don't let up, and make change stick.

Where policies and strategies fit into the planning process

• They give mid- and lower-level managers a good idea of the future plans for each department in an
organization.
• A framework is created whereby plans and decisions are made.
• Mid- and lower-level management may add their own plans to the business's strategic ones.

Multi-divisional management hierarchy

The management of a large organization may have three levels:

1. Senior management (or "top management" or "upper management")

2. Middle management
3. Low-level management, such as supervisors or team-leaders
4. Foreman
5. Rank and File

Top-level management

• Require an extensive knowledge of management roles and skills.

 • They have to be very aware of external factors such as markets.
• Their decisions are generally of a long-term nature
• Their decisions are made using analytic, directive, conceptual and/or behavioral/participative processes
• They are responsible for strategic decisions.
• They have to chalk out the plan and see that plan may be effective in the future.
• They are executive in nature.

Middle management

• Mid-level managers have a specialized understanding of certain managerial tasks.

• They are responsible for carrying out the decisions made by top-level management.

Lower management

• This level of management ensures that the decisions and plans taken by the other two are carried out.
• Lower-level managers' decisions are generally short-term ones.

Foreman / lead hand

• They are people who have direct supervision over the working force in office factory, sales field or
other workgroup or areas of activity.

Rank and File

• The responsibilities of the persons belonging to this group are even more restricted and more specific
than those of the foreman.

Strategic management

Strategic or institutional management is the conduct of drafting, implementing and evaluating cross-
functional decisions that will enable an organization to achieve its long-term objectives.[1] It is the process of
specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of
projects and programs, which are designed to achieve these objectives, and then allocating resources to
implement the policies and plans, projects and programs. A balanced scorecard is often used to evaluate the
overall performance of the business and its progress towards objectives.

Strategic management is a level of managerial activity under setting goals and over Tactics. Strategic
management provides overall direction to the enterprise and is closely related to the field of Organization
Studies. In the field of business administration it is useful to talk about "strategic alignment" between the
organization and its environment or "strategic consistency". According to Arieu (2007), "there is strategic
consistency when the actions of an organization are consistent with the expectations of management, and these
in turn are with the market and the context."

“Strategic management is an ongoing process that evaluates and controls the business and the industries in
which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and
potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how
it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed
circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or
political environment.” (Lamb, 1984:ix)[2]
Strategy formulation

Strategic formulation is a combination of three main processes which are as follows:

• Performing a situation analysis, self-evaluation and competitor analysis: both internal and external; both
micro-environmental and macro-environmental.
• Concurrent with this assessment, objectives are set. These objectives should be parallel to a time-line;
some are in the short-term and others on the long-term. This involves crafting vision statements (long
term view of a possible future), mission statements (the role that the organization gives itself in society),
overall corporate objectives (both financial and strategic), strategic business unit objectives (both
financial and strategic), and tactical objectives.
• These objectives should, in the light of the situation analysis, suggest a strategic plan. The plan provides
the details of how to achieve these objectives.

Marketing action plan

• Placement and execution of required resources are financial, manpower, operational support, time,
technology support
• Operating with a change in methods or with alteration in structure
• Distributing the specific tasks with responsibility or moulding specific jobs to individuals or teams.
• The process should be managed by a responsible team. This is to keep direct watch on result,comparison
for betterment and best practices, cultivating the effectiveness of processes, calibrating and reducing the
variations and setting the process as required.
• Introducing certain programs involves acquiring the requisition of resources: a necessity for developing
the process, training documentation, process testing, and imalgation with (and/or conversion from)
difficult processes.

As and when the strategy implementation processes, there have been so many problems arising such as human
relations, the employee-communication. Such a time , marketing strategy is the biggest implementation
problem usually involves , with emphasis on the appropriate timing of new products. An organization, with an
effective management, should try to implement its plans without signaling this fact to its competitors.[3]

In order for a policy to work, there must be a level of consistency from every person in an organization,
specially management. This is what needs to occur on both the tactical and strategic levels of management.

Strategy evaluation

• Measuring the effectiveness of the organizational strategy, it's extremely important to conduct a SWOT
analysis to figure out the strengths, weaknesses, opportunities and threats (both internal and external) of
the entity in question. This may require to take certain precautionary measures or even to change the
entire strategy.

In corporate strategy, Johnson and Scholes present a model in which strategic options are evaluated against
three key success criteria:

• Suitability (would it work?)

• Feasibility (can it be made to work?)
• Acceptability (will they work it?)

Suitability

Suitability deals with the overall rationale of the strategy. The key point to consider is whether the strategy
would address the key strategic issues underlined by the organisation's strategic position.

• Does it make economic sense?

 • Would the organization obtain economies of scale, economies of scope or experience economy?
• Would it be suitable in terms of environment and capabilities?

Tools that can be used to evaluate suitability include:

• Ranking strategic options

• Decision trees
• What-if analysis

Feasibility

Feasibility is concerned with whether the resources required to implement the strategy are available, can be
developed or obtained. Resources include funding, people, time and information.

Tools that can be used to evaluate feasibility include:

• cash flow analysis and forecasting

• break-even analysis
• resource deployment analysis

Acceptability

Acceptability is concerned with the expectations of the identified stakeholders (mainly shareholders, employees
and customers) with the expected performance outcomes, which can be return, risk and stakeholder reactions.

• Return deals with the benefits expected by the stakeholders (financial and non-financial). For example,
shareholders would expect the increase of their wealth, employees would expect improvement in their
careers and customers would expect better value for money.
• Risk deals with the probability and consequences of failure of a strategy (financial and non-financial).
• Stakeholder reactions deals with anticipating the likely reaction of stakeholders. Shareholders could
oppose the issuing of new shares, employees and unions could oppose outsourcing for fear of losing
their jobs, customers could have concerns over a merger with regards to quality and support.

Tools that can be used to evaluate acceptability include:

• what-if analysis
• stakeholder mapping

General approaches

In general terms, there are two main approaches, which are opposite but complement each other in some ways,
to strategic management:

• The Industrial Organizational Approach

o based on economic theory — deals with issues like competitive rivalry, resource allocation,
economies of scale
o assumptions — rationality, self discipline behaviour, profit maximization
• The Sociological Approach
o deals primarily with human interactions
o assumptions — bounded rationality, satisfying behaviour, profit sub-optimality. An example of a
company that currently operates this way is Google

Strategic management techniques can be viewed as bottom-up, top-down, or collaborative processes. In the
bottom-up approach, employees submit proposals to their managers who, in turn, funnel the best ideas further
up the organization. This is often accomplished by a capital budgeting process. Proposals are assessed using
financial criteria such as return on investment or cost-benefit analysis. Cost underestimation and benefit
overestimation are major sources of error. The proposals that are approved form the substance of a new
strategy, all of which is done without a grand strategic design or a strategic architect. The top-down approach is
the most common by far. In it, the CEO, possibly with the assistance of a strategic planning team, decides on
the overall direction the company should take. Some organizations are starting to experiment with collaborative
strategic planning techniques that recognize the emergent nature of strategic decisions.

The strategy hierarchy

In most (large) corporations there are several levels of management. Strategic management is the highest of
these levels in the sense that it is the broadest - applying to all parts of the firm - while also incorporating the
longest time horizon. It gives direction to corporate values, corporate culture, corporate goals, and corporate
missions. Under this broad corporate strategy there are typically business-level competitive strategies and
functional unit strategies.

Corporate strategy refers to the overarching strategy of the diversified firm. Such a corporate strategy answers
the questions of "which businesses should we be in?" and "how does being in these businesses create synergy
and/or add to the competitive advantage of the corporation as a whole?"

Business strategy refers to the aggregated strategies of single business firm or a strategic business unit (SBU)
in a diversified corporation. According to Michael Porter, a firm must formulate a business strategy that
incorporates either cost leadership, differentiation or focus in order to achieve a sustainable competitive
advantage and long-term success in its chosen areas or industries.

Functional strategies include marketing strategies, new product development strategies, human resource
strategies, financial strategies, legal strategies, supply-chain strategies, and information technology
management strategies. The emphasis is on short and medium term plans and is limited to the domain of each
department’s functional responsibility. Each functional department attempts to do its part in meeting overall
corporate objectives, and hence to some extent their strategies are derived from broader corporate strategies.

Many companies feel that a functional organizational structure is not an efficient way to organize activities so
they have reengineered according to processes or SBUs. A strategic business unit is a semi-autonomous unit
that is usually responsible for its own budgeting, new product decisions, hiring decisions, and price setting. An
SBU is treated as an internal profit centre by corporate headquarters. A technology strategy, for example,
although it is focused on technology as a means of achieving an organization's overall objective(s), may include
dimensions that are beyond the scope of a single business unit, engineering organization or IT department.

An additional level of strategy called operational strategy was encouraged by Peter Drucker in his theory of
management by objectives (MBO). It is very narrow in focus and deals with day-to-day operational activities
such as scheduling criteria. It must operate within a budget but is not at liberty to adjust or create that budget.
Operational level strategies are informed by business level strategies which, in turn, are informed by corporate
level strategies.

Since the turn of the millennium, some firms have reverted to a simpler strategic structure driven by advances
in information technology. It is felt that knowledge management systems should be used to share information
and create common goals. Strategic divisions are thought to hamper this process. This notion of strategy has
been captured under the rubric of dynamic strategy, popularized by Carpenter and Sanders's textbook [1]. This
work builds on that of Brown and Eisenhart as well as Christensen and portrays firm strategy, both business and
corporate, as necessarily embracing ongoing strategic change, and the seamless integration of strategy
formulation and implementation. Such change and implementation are usually built into the strategy through
the staging and pacing facets.
Reasons why strategic plans fail

There are many reasons why strategic plans fail, especially:

• Failure to understand the customer

o Why do they buy
o Is there a real need for the product
o inadequate or incorrect marketing research
• Inability to predict environmental reaction
o What will competitors do
 Fighting brands
 Price wars
o Will government intervene
• Over-estimation of resource competence
o Can the staff, equipment, and processes handle the new strategy
o Failure to develop new employee and management skills
• Failure to coordinate
o Reporting and control relationships not adequate
o Organizational structure not flexible enough
• Failure to obtain senior management commitment
o Failure to get management involved right from the start
o Failure to obtain sufficient company resources to accomplish task
• Failure to obtain employee commitment
o New strategy not well explained to employees
o No incentives given to workers to embrace the new strategy
• Under-estimation of time requirements
o No critical path analysis done
• Failure to follow the plan
o No follow through after initial planning
o No tracking of progress against plan
o No consequences for above
• Failure to manage change
o Inadequate understanding of the internal resistance to change
o Lack of vision on the relationships between processes, technology and organization
• Poor communications
o Insufficient information sharing among stakeholders
o Exclusion of stakeholders and delegates

Limitations of strategic management

Although a sense of direction is important, it can also stifle creativity, especially if it is rigidly enforced. In an
uncertain and ambiguous world, fluidity can be more important than a finely tuned strategic compass. When a
strategy becomes internalized into a corporate culture, it can lead to group think. It can also cause an
organization to define itself too narrowly. An example of this is marketing myopia.

Many theories of strategic management tend to undergo only brief periods of popularity. A summary of these
theories thus inevitably exhibits survivorship bias (itself an area of research in strategic management). Many
theories tend either to be too narrow in focus to build a complete corporate strategy on, or too general and
abstract to be applicable to specific situations. Populism or faddishness can have an impact on a particular
theory's life cycle and may see application in inappropriate circumstances. See business philosophies and
popular management theories for a more critical view of management theories.

In 2000, Gary Hamel coined the term strategic convergence to explain the limited scope of the strategies being
used by rivals in greatly differing circumstances. He lamented that strategies converge more than they should,
because the more successful ones are imitated by firms that do not understand that the strategic process
involves designing a custom strategy for the specifics of each situation.[51]

Ram Charan, aligning with a popular marketing tagline, believes that strategic planning must not dominate
action. "Just do it!", while not quite what he meant, is a phrase that nevertheless comes to mind when
combatting analysis paralysis.

The linearity trap

It is tempting to think that the elements of strategic management – (i) reaching consensus on corporate
objectives; (ii) developing a plan for achieving the objectives; and (iii) marshalling and allocating the resources
required to implement the plan – can be approached sequentially. It would be convenient, in other words, if one
could deal first with the noble question of ends, and then address the mundane question of means.

But in the world in which strategies have to be implemented, the three elements are interdependent. Means are
as likely to determine ends as ends are to determine means.[96] The objectives that an organization might wish to
pursue are limited by the range of feasible approaches to implementation. (There will usually be only a small
number of approaches that will not only be technically and administratively possible, but also satisfactory to the
full range of organizational stakeholders.) In turn, the range of feasible implementation approaches is
determined by the availability of resources.

And so, although participants in a typical “strategy session” may be asked to do “blue sky” thinking where they
pretend that the usual constraints – resources, acceptability to stakeholders , administrative feasibility – have
been lifted, the fact is that it rarely makes sense to divorce oneself from the environment in which a strategy
will have to be implemented. It’s probably impossible to think in any meaningful way about strategy in an
unconstrained environment. Our brains can’t process “boundless possibilities”, and the very idea of strategy
only has meaning in the context of challenges or obstacles to be overcome. It’s at least as plausible to argue that
acute awareness of constraints is the very thing that stimulates creativity by forcing us to constantly reassess
both means and ends in light of circumstances.

The key question, then, is, "How can individuals, organizations and societies cope as well as possible with ...
issues too complex to be fully understood, given the fact that actions initiated on the basis of inadequate
understanding may lead to significant regret?"[97]

The answer is that the process of developing organizational strategy must be iterative. It involves toggling back
and forth between questions about objectives, implementation planning and resources. An initial idea about
corporate objectives may have to be altered if there is no feasible implementation plan that will meet with a
sufficient level of acceptance among the full range of stakeholders, or because the necessary resources are not
available, or both.

Even the most talented manager would no doubt agree that "comprehensive analysis is impossible" for complex
problems[98]. Formulation and implementation of strategy must thus occur side-by-side rather than sequentially,
because strategies are built on assumptions which, in the absence of perfect knowledge, will never be perfectly
correct. Strategic management is necessarily a "repetitive learning cycle [rather than] a linear progression
towards a clearly defined final destination."[99] While assumptions can and should be tested in advance, the
ultimate test is implementation. You will inevitably need to adjust corporate objectives and/or your approach to
pursuing outcomes and/or assumptions about required resources. Thus a strategy will get remade during
implementation because "humans rarely can proceed satisfactorily except by learning from experience; and
modest probes, serially modified on the basis of feedback, usually are the best method for such learning."[100]

It serves little purpose (other than to provide a false aura of certainty sometimes demanded by corporate
strategists and planners) to pretend to anticipate every possible consequence of a corporate decision, every
possible constraining or enabling factor, and every possible point of view. At the end of the day, what matters
for the purposes of strategic management is having a clear view – based on the best available evidence and on
defensible assumptions – of what it seems possible to accomplish within the constraints of a given set of
circumstances. As the situation changes, some opportunities for pursuing objectives will disappear and others
arise. Some implementation approaches will become impossible, while others, previously impossible or
unimagined, will become viable.

The essence of being “strategic” thus lies in a capacity for "intelligent trial-and error" [101] rather than linear
adherence to finally honed and detailed strategic plans. Strategic management will add little value -- indeed, it
may well do harm -- if organizational strategies are designed to be used as a detailed blueprints for managers.
Strategy should be seen, rather, as laying out the general path - but not the precise steps - by which an
organization intends to create value.[102]Strategic management is a question of interpreting, and continuously
reinterpreting, the possibilities presented by shifting circumstances for advancing an organization's objectives.
Doing so requires strategists to think simultaneously about desired objectives, the best approach for achieving
them, and the resources implied by the chosen approach. It requires a frame of mind that admits of no boundary
between means and ends.

Operations management
Operations management is an area of business concerned with the production of goods and services, and
involves the responsibility of ensuring that business operations are efficient in terms of using as little resource
as needed, and effective in terms of meeting customer requirements. It is concerned with managing the process
that converts inputs (in the forms of materials, labour and energy) into outputs (in the form of goods and
services).

Operations traditionally refers to the production of goods and services separately, although the distinction
between these two main types of operations is increasingly difficult to make as manufacturers tend to merge
product and service offerings. More generally, Operations Management aims to increase the content of value-
added activities in any given process. Fundamentally, these value-adding creative activities should be aligned
with market opportunity for optimal enterprise performance.

According to the U.S. Department of Education, Operations Management [is the field concerned with managing
and directing] the physical and/or technical functions of a firm or organization, particularly those relating to
development, production, and manufacturing. [Operations Management programs typically include] instruction
in principles of general management, manufacturing and production systems, plant management, equipment
maintenance management, production control, industrial labor relations and skilled trades supervision, strategic
manufacturing policy, systems analysis, productivity analysis and cost control, and materials planning.[1][2]

Business operations are those ongoing recurring activities involved in the running of a business for the
purpose of producing value for the stakeholders. They are contrasted with project management, and consist of
business processes.

The outcome of business operations is the harvesting of value from assets owned by a business. Assets can be
either physical or intangible. An example of value derived from a physical asset like a building is rent. An
example of value derived from an intangible asset like an idea is a royalty. The effort involved in "harvesting"
this value is what constitutes business operations.

Business operations encompasses three fundamental management imperatives that collectively aim to maximize
value harvested from business assets (this has often been referred to as "sweating the assets"):

1. Generate recurring income.

2. Increase the value of the business assets.
3. Secure the income and value of the business.

All three imperatives are mutually dependent. The following basic tenets illustrate this interdependency:
 • The more recurring income an asset generates, the more valuable it becomes. For example, the products
that sell at the highest volumes and prices are usually considered to be the most valuable products in a
business's product portfolio.

• The more valuable a product becomes the more recurring income it generates. For example, a luxury
car can be leased out at a higher rate than a normal car.

• The intrinsic value and income-generating potential of an asset cannot be realized without a way to
secure it. For example, petroleum deposits are worthless unless processes and equipment are developed
and employed to extract, refine, and distribute it profitably.

The business model of a business describes the means by which the three management imperatives are
achieved. In this sense, business operations is the execution of the business model.

Business operations topics

Generating recurring income

This is the most straightforward and well-understood management imperative of business operations. The
primary goal of this imperative is to implement a sustained delivery of goods and services to the business's
customers at a cost that is less than the funds acquired in exchange for said goods and services—in short,
making a profit.

The funds directly acquired by the business in exchange for the goods and services it delivers is the business's
revenue.

The cost of developing, producing, and delivering these goods and services is the business's expenses.

A business whose revenues are greater than its expenses makes a profit. Such a business is profitable.

Increasing the value of the business

The more profitable a business is, the more valuable it is. A business's profitability is measured on the
following bases:

• How much income it generates for the amount of assets its business operations employ—its business
return.
• How much income it generates for the amount of revenue it realizes—its business margin.

Securing the income and value of the business

• Desirability or demand for its goods and services

• Ability of its customers to pay for its goods and services
• Uniqueness and competitiveness of its business model
• Control exerted over the quality and efficiency of production activities
• Public regard for the business as a member of the community

A business that can harvest a significant amount of value from its assets but cannot demonstrate an ability to
sustain this effort cannot be considered a viable business.
 Marketing management
Marketing management is a business discipline which is focused on the practical application of marketing
techniques and the management of a firm's marketing resources and activities. Rapidly emerging forces of
globalization have compelled firms to market beyond the borders of their home country making International
Marketing highly significant and an integral part of a firm's marketing strategy.[1] Marketing managers are often
responsible for influencing the level, timing, and composition of customer demand accepted definition of the
term. In part, this is because the role of a marketing manager can vary significantly based on a business' size,
corporate culture, and industry context. For example, in a large consumer products company, the marketing
manager may act as the overall general manager of his or her assigned product [2]

From this perspect, it consists of 5 steps, beginning with the market & environment research. After fixing the
targets and setting the strategies, they will be realised by the marketing mix in step 4. The last step in the
process is the marketing controlling.Marketing management strategy and design effective, cost-efficient
implementation programs, firms must possess a detailed, objective understanding of their own business and the
market in which they operate.[3] In analyzing these issues, the discipline of marketing management often
overlaps with the related discipline of strategic planning.

Traditionally, marketing analysis was structured into three areas: Customer analysis, Company analysis, and
Competitor analysis (so-called "3Cs" analysis). More recently, it has become fashionable in some marketing
circles to divide these further into certain five "Cs": Customer analysis, Company analysis, Collaborator
analysis, Competitor analysis, and analysis of the industry Context.

Department analysis is to develop a schematic diagram for market segmentation, breaking down the market into
various constituent groups of customers, which are called customer segments or market segmentations.
Marketing managers work to develop detailed profiles of each segment, focusing on any number of variables
that may differ among the segments: demographic, psychographic, geographic, behavioral, needs-benefit, and
other factors may all be examined. Marketers also attempt to track these segments' perceptions of the various
products in the market using tools such as perceptual mapping.

In company analysis, marketers focus on understanding the company's cost structure and cost position relative
to competitors, as well as working to identify a firm's core competencies and other competitively distinct
company resources. Marketing managers may also work with the accounting department to analyze the profits
the firm is generating from various product lines and customer accounts. The company may also conduct
periodic brand audits to assess the strength of its brands and sources of brand equity.[4]

The firm's collaborators may also be profiled, which may include various suppliers, distributors and other
channel partners, joint venture partners, and others. An analysis of complementary products may also be
performed if such products exist.

Marketing management employs various tools from economics and competitive strategy to analyze the industry
context in which the firm operates. These include Porter's five forces, analysis of strategic groups of
competitors, value chain analysis and others.[5] Depending on the industry, the regulatory context may also be
important to examine in detail.

In Competitor analysis, marketers build detailed profiles of each competitor in the market, focusing especially
on their relative competitive strengths and weaknesses using SWOT analysis. Marketing managers will
examine each competitor's cost structure, sources of profits, resources and competencies, competitive
positioning and product differentiation, degree of vertical integration, historical responses to industry
developments, and other factors.

Marketing management often finds it necessary to invest in research to collect the data required to perform
accurate marketing analysis. As such, they often conduct market research (alternately marketing research) to
obtain this information. Marketers employ a variety of techniques to conduct market research, but some of the
more common include:
 • Qualitative marketing research, such as focus groups
• Quantitative marketing research, such as statistical surveys
• Experimental techniques such as test markets
• Observational techniques such as ethnographic (on-site) observation

Marketing managers may also design and oversee various environmental scanning and competitive intelligence
processes to help identify trends and inform the company's marketing analysis.

Marketing strategy

Once the company has obtained an adequate understanding of the customer base and its own competitive
position in the industry, marketing managers are able to make key strategic decisions and develop a marketing
strategy designed to maximize the revenues and profits of the firm. The selected strategy may aim for any of a
variety of specific objectives, including optimizing short-term unit margins, revenue growth, market share,
long-term profitability, or other goals.

To achieve the desired objectives, marketers typically identify one or more target customer segments which
they intend to pursue. Customer segments are often selected as targets because they score highly on two
dimensions: 1) The segment is attractive to serve because it is large, growing, makes frequent purchases, is not
price sensitive (i.e. is willing to pay high prices), or other factors; and 2) The company has the resources and
capabilities to compete for the segment's business, can meet their needs better than the competition, and can do
so profitably.[3] In fact, a commonly cited definition of marketing is simply "meeting needs profitably." [6]

The implication of selecting target segments is that the business will subsequently allocate more resources to
acquire and retain customers in the target segment(s) than it will for other, non-targeted customers. In some
cases, the firm may go so far as to turn away customers that are not in its target segment.The doorman at a
swanky nightclub, for example, may deny entry to unfashionably dressed individuals because the business has
made a strategic decision to target the "high fashion" segment of nightclub patrons.

In conjunction with targeting decisions, marketing managers will identify the desired positioning they want the
company, product, or brand to occupy in the target customer's mind. This positioning is often an encapsulation
of a key benefit the company's product or service offers that is differentiated and superior to the benefits offered
by competitive products.[7] For example, Volvo has traditionally positioned its products in the automobile
market in North America in order to be perceived as the leader in "safety", whereas BMW has traditionally
positioned its brand to be perceived as the leader in "performance."

Ideally, a firm's positioning can be maintained over a long period of time because the company possesses, or
can develop, some form of sustainable competitive advantage.[8] The positioning should also be sufficiently
relevant to the target segment such that it will drive the purchasing behavior of target customers.[7]

Implementation planning

The Marketing Metrics Continuum provides a framework for how to categorize metrics from the tactical to
strategic.

After the firm's strategic objectives have been identified, the target market selected, and the desired positioning
for the company, product or brand has been determined, marketing managers focus on how to best implement
the chosen strategy. Traditionally, this has involved implementation planning across the "4Ps" of marketing:
Product management, Pricing, Place (i.e. sales and distribution channels), and Promotion.

Taken together, the company's implementation choices across the 4Ps are often described as the marketing mix,
meaning the mix of elements the business will employ to "go to market" and execute the marketing strategy.
The overall goal for the marketing mix is to consistently deliver a compelling value proposition that reinforces
the firm's chosen positioning, builds customer loyalty and brand equity among target customers, and achieves
the firm's marketing and financial objectives.
In many cases, marketing management will develop a marketing plan to specify how the company will execute
the chosen strategy and achieve the business' objectives. The content of marketing plans varies from firm to
firm, but commonly includes:

• An executive summary
• Situation analysis to summarize facts and insights gained from market research and marketing analysis
• The company's mission statement or long-term strategic vision
• A statement of the company's key objectives, often subdivided into marketing objectives and financial
objectives
• The marketing strategy the business has chosen, specifying the target segments to be pursued and the
competitive positioning to be achieved
• Implementation choices for each element of the marketing mix (the 4Ps)

Project, process, and vendor management

Once the key implementation initiatives have been identified, marketing managers work to oversee the
execution of the marketing plan. Marketing executives may therefore manage any number of specific projects,
such as sales force management initiatives, product development efforts, channel marketing programs and the
execution of public relations and advertising campaigns. Marketers use a variety of project management
techniques to ensure projects achieve their objectives while keeping to established schedules and budgets.

More broadly, marketing managers work to design and improve the effectiveness of core marketing processes,
such as new product development, brand management, marketing communications, and pricing. Marketers may
employ the tools of business process reengineering to ensure these processes are properly designed, and use a
variety of process management techniques to keep them operating smoothly.

Effective execution may require management of both internal resources and a variety of external vendors and
service providers, such as the firm's advertising agency. Marketers may therefore coordinate with the
company's Purchasing department on the procurement of these services.

Organizational management and leadership

Marketing management may spend a fair amount of time building or maintaining a marketing orientation for
the business. Achieving a market orientation, also known as "customer focus" or the "marketing concept",
requires building consensus at the senior management level and then driving customer focus down into the
organization. Cultural barriers may exist in a given business unit or functional area that the marketing manager
must address in order to achieve this goal. Additionally, marketing executives often act as a "brand champion"
and work to enforce corporate identity standards across the enterprise.

In larger organizations, especially those with multiple business units, top marketing managers may need to
coordinate across several marketing departments and also resources from finance, research and development,
engineering, operations, manufacturing, or other functional areas to implement the marketing plan. In order to
effectively manage these resources, marketing executives may need to spend much of their time focused on
political issues and inte-departmental negotiations.

The effectiveness of a marketing manager may therefore depend on his or her ability to make the internal "sale"
of various marketing programs equally as much as the external customer's reaction to such programs.[6]

Reporting, measurement, feedback and control systems

Marketing management employs a variety of metrics to measure progress against objectives. It is the
responsibility of marketing managers – in the marketing department or elsewhere – to ensure that the execution
of marketing programs achieves the desired objectives and does so in a cost-efficient manner.

Marketing management therefore often makes use of various organizational control systems, such as sales
forecasts, sales force and reseller incentive programs, sales force management systems, and customer
relationship management tools (CRM). Recently, some software vendors have begun using the term "marketing
operations management" or "marketing resource management" to describe systems that facilitate an integrated
approach for controlling marketing resources. In some cases, these efforts may be linked to various supply
chain management systems, such as enterprise resource planning (ERP), material requirements planning
(MRP), efficient consumer response (ECR), and inventory management systems.

Measuring the return on investment (ROI) of and marketing effectiveness various marketing initiatives is a
significant problem for marketing management. Various market research, accounting and financial tools are
used to help estimate the ROI of marketing investments. Brand valuation, for example, attempts to identify the
percentage of a company's market value that is generated by the company's brands, and thereby estimate the
financial value of specific investments in brand equity. Another technique, integrated marketing
communications (IMC), is a CRM database-driven approach that attempts to estimate the value of marketing
mix executions based on the changes in customer behavior these executions generate.[9]
 BUSINESS ANALYSIS
Business analysis is the discipline[1] of identifying business needs and determining solutions to business
problems. Solutions often include a systems development component, but may also consist of process
improvement or organizational change or strategic planning and policy development. The person who carries
out this task is called a business analyst or BA. [2]

Those BAs who work solely on developing software systems may be called IT Business Analysts, Technical
Business Analysts, or Systems Analysts.

Business analysis sub-disciplines

Business analysis as a discipline has a heavy overlap with requirements analysis sometimes also called
requirements engineering, but focuses on identifying the changes to an organization that are required for it to
achieve strategic goals. These changes include changes to strategies, structures, policies, processes, and
information systems.

Examples of business analysis include:

Enterprise analysis or company analysis

focuses on understanding the needs of the business as a whole, its strategic direction, and identifying
initiatives that will allow a business to meet those strategic goals.
Requirements planning and management
involves planning the requirements development process, determining which requirements are the
highest priority for implementation, and managing change.
Requirements elicitation
describes techniques for collecting requirements from stakeholders in a project.
Requirements analysis
describes how to develop and specify requirements in enough detail to allow them to be successfully
implemented by a project team.
Requirements communication
describes techniques for ensuring that stakeholders have a shared understanding of the requirements and
how they will be implemented.
Solution assessment and validation
describes how the business analyst can verify the correctness of a proposed solution, how to support the
implementation of a solution, and how to assess possible shortcomings in the implementation.

Business analysis techniques

There are a number of techniques that a Business Analyst will use when facilitating business change. These
range from workshop facilitation techniques used to elicit requirements, to techniques for analysing and
organising requirements.

Some of these techniques include:

PESTLE

This is used to perform an external environmental analysis by examining the many different external factors
affecting an organisation. The six attributes of PESTLE:

Political (Current and potential influences from political pressures)

Economic (The local, national and world economy impact)
Sociological (The ways in which a society can affect an organisation)
Technological (The effect of new and emerging technology)
Legal (The effect of national and world legislation)
Environmental (The local, national and world environmental issues)
MOST

This is used to perform an internal environmental analysis by defining the attributes of MOST to ensure that the
project you are working on is aligned to each of the 4 attributes. The four attributes of MOST[3]

Mission (where the business intends to go)

Objectives (the key goals which will help achieve the mission)
Strategies (options for moving forward)
Tactics (how strategies are put into action)

SWOT

This is used to help focus activities into areas of strength and where the greatest opportunities lie. This is used
to identify the dangers that take the form of weaknesses and both internal and external threats.
The four attributes of SWOT:

Strengths - What are the advantages? What is currently done well?

Weaknesses - What could be improved? What is done badly?
Opportunities - What good opportunities face the organisation?
Threats - What obstacles does the organisation face?

CATWOE

This is used to prompt thinking about what the business is trying to achieve. Business Perspectives help the
Business Analyst to consider the impact of any proposed solution on the people involved.
There are six elements of CATWOE[4]

Customers - Who are the beneficiaries of the highest level business process and how does the issue
affect them?
Actors - Who is involved in the situation, who will be involved in implementing solutions and what will
impact their success?
Transformation Process - What processes or systems are affected by the issue?
World View - What is the big picture and what are the wider impacts of the issue?
Owner - Who owns the process or situation being investigated and what role will they play in the
solution?
Environmental Constraints - What are the constraints and limitations that will impact the solution and its
success?

De Bono 6Hat

This is often used in a brainstorming session to generate and analyse ideas and options. It is useful to encourage
specific types of thinking and can be a convenient and symbolic way to request someone to “switch gear. It
involves restricting the group to only thinking in specific ways - giving ideas & analysis in the “mood” of the
time. Also known as the Six Thinking Hats.

White: Pure, facts, logical.

Green: Creative, emotional
Yellow: Bright, optimistic, positive.
Black: Negative, devil’s advocate.
Red: Emotional.
Blue: Cold, control.

Not all colours / moods have to be used

Five Why's

Five Whys is used to get to the root of what is really happening in a single instance. For each answer given a
further 'why' is asked.

MoSCoW

This is used to prioritise requirements by allocating an appropriate priority, gauging it against the validity of the
requirement itself and its priority against other requirements. MoSCoW comprises:

Must have - or else delivery will be a failure

Should have - otherwise will have to adopt a workaround
Could have - to increase delivery satisfaction
Would like to have in the future - but won't have now

VPEC-T

This technique is used when analyzing the expectations of multiple parties having different views of a system in
which they all have an interest in common, but have different priorities and different responsibilities.

Values - constitute the objectives, beliefs and concerns of all parties participating. They may be
financial, social, tangible and intangible
Policies - constraints that govern what may be done and the manner in which it may be done
Events - real-world proceedings that stimulate activity
Content - the meaningful portion of the documents, conversations, messages, etc. that are produced and
used by all aspects of business activity
Trust - trusting (or otherwise) relationship between all parties engaged in a value system

Roles of Business Analysts

As the scope of business analysis is very wide, there has been a tendency for business analysts to specialize in
one of the three sets of activities which constitute the scope of business analysis.

Strategist
Organizations need to focus on strategic matters on a more or less continuous basis in the modern
business world. Business analysts, serving this need, are well-versed in analyzing the strategic profile of
the organization and its environment, advising senior management on suitable policies, and the effects
of policy decisions.
Architect
Organizations may need to introduce change to solve business problems which may have been identified
by the strategic analysis, referred to above. Business analysts contribute by analyzing objectives,
processes and resources, and suggesting ways by which re-design (BPR), or improvements (BPI) could
be made. Particular skills of this type of analyst are "soft skills", such as knowledge of the business,
requirements engineering, stakeholder analysis, and some "hard skills", such as business process
modeling. Although the role requires an awareness of technology and its uses, it is not an IT-focused
role.
Three elements are essential to this aspect of the business analysis effort: the redesign of core business
processes; the application of enabling technologies to support the new core processes; and the
management of organizational change. This aspect of business analysis is also called "business process
improvement" (BPI), or "reengineering".
Systems analyst
There is the need to align IT Development with the systems actually running in production for the
Business. A long-standing problem in business is how to get the best return from IT investments, which
are generally very expensive and of critical, often strategic, importance. IT departments, aware of the
problem, often create a business analyst role to better understand, and define the requirements for their
IT systems. Although there may be some overlap with the developer and testing roles, the focus is
 always on the IT part of the change process, and generally, this type of business analyst gets involved,
only when a case for change has already been made and decided upon.

In any case, the term "analyst" is lately considered somewhat misleading, insofar as analysts (i.e. problem
investigators) also do design work (solution definers).

Business process improvement

A business process improvement (BPI) typically involves six steps:

1. Selection of process teams and leader.

Process teams, comprising 2-4 employees from various departments that are involved in the particular process,
are set up. Each team selects a process team leader, typically the person who is responsible for running the
respective process.

2. Process analysis training

The selected process team members are trained in process analysis and documentation techniques.

3. Process analysis interview

The members of the process teams conduct several interviews with people working along the processes. During
the interview, they gather information about process structure, as well as process performance data.

4. Process documentation
The interview results are used to draw a first process map. Previously existing process descriptions are
reviewed and integrated, wherever possible. Possible process improvements, discussed during the interview, are
integrated into the process maps.

5. Review cycle
The draft documentation is then reviewed by the employees working in the process. Additional review cycles
may be necessary in order to achieve a common view (mental image) of the process with all concerned
employees. This stage is an iterative process.

6. Problem analysis
A thorough analysis of process problems can then be conducted, based on the process map, and information
gathered about the process. At this time of the project, process goal information from the strategy audit is
available as well, and is used to derive measures for process improvement.

Goal of business analysts

Ultimately, business analysts want to achieve the following outcomes:

• Reduce waste
• Create solutions
• Complete projects on time
• Improve efficiency
• Document the right requirements

One way to assess these goals is to measure the return on investment (ROI) for all projects. Keeping score is
part of human nature as we are always comparing ourselves or our performance to others, no matter what we
are doing. According to Forrester Research, more than $100 billion is spent annually in the U.S. on custom and
internally developed software projects. For all of these software development projects, keeping score is also
important and business leaders are constantly asking for the return or ROI on a proposed project or at the
conclusion of an active project. However, asking for the ROI without really understanding the underpinnings of
where value is created or destroyed is putting the cart before the horse.
Reduce waste and complete projects on time

Project delays are costly in three different dimensions:

• Project costs – For every month of delay, the project team continues to rack up costs and expenses.
When a large part of the development team has been outsourced, the costs will start to add up quickly
and are very visible if contracted on a time and materials basis (T&M). Fixed price contracts with
external parties limit this risk. For internal resources, the costs of delays are not as readily apparent,
unless time spent by resources is being tracked against the project, as labor costs are essentially ‘fixed’
costs.

• Opportunity costs – Opportunity costs come in two flavors – lost revenue and unrealized expense
reductions. Some projects are specifically undertaken with the purpose of driving new or additional
revenues to the bottom line. For every month of delay, a company foregoes a month of this new revenue
stream. The purpose of other projects is to improve efficiencies and reduce costs. Again, each month of
failure postpones the realization of these expense reductions by another month. In the vast majority of
cases, these opportunities are never captured or analyzed, resulting in misleading ROI calculations. Of
the two opportunity costs, the lost revenue is the most egregious – and the impacts are greater and
longer lasting.

N.B. On a lot of projects (particularly larger ones) the project manager is the one tasked with ensuring that a
project is completed on time. The BA's job is more to ensure that if a project is not completed on time then at
least the highest priority requirements are met.

Document the right requirements

Business analysts want to make sure that they define the application in a way that meets the end-users’ needs.
Essentially, they want to define the right application. This means that they must document the right
requirements through listening carefully to ‘customer’ feedback, and by delivering a complete set of clear
requirements to the technical architects and coders who will write the program. If a business analyst has limited
tools or skills to help him elicit the right requirements, then the chances are fairly high that he will end up
documenting requirements that will not be used or that will need to be re-written – resulting in rework as
discussed above. The time wasted to document unnecessary requirements not only impacts the business analyst,
it also impacts the rest of the development cycle. Coders need to generate application code to perform these
unnecessary requirements and testers need to make sure that the wanted features actually work as documented
and coded. Experts estimate that 10% to 40% of the features in new software applications are unnecessary or go
unused. Being able to reduce the amount of these extra features by even one-third can result in significant
savings.

Improve project efficiency

Efficiency can be achieved in two ways: by reducing rework and by shortening project length.

Rework is a common industry headache and it has become so common at many organizations that it is often
built into project budgets and time lines. It generally refers to extra work needed in a project to fix errors due to
incomplete or missing requirements and can impact the entire software development process from definition to
coding and testing. The need for rework can be reduced by ensuring that the requirements gathering and
definition processes are thorough and by ensuring that the business and technical members of a project are
involved in these processes from an early stage.

Shortening project length presents two potential benefits. For every month that a project can be shortened,
project resource costs can be diverted to other projects. This can lead to savings on the current project and lead
to earlier start times of future projects (thus increasing revenue potential).
PEST analysis
PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework
of macro-environmental factors used in the environmental scanning component of strategic management. Some
analysts added Legal and rearranged the mnemonic to SLEPT;[1] inserting Environmental factors expanded it to
PESTEL or PESTLE, which is popular in the UK.[2] The model has recently been further extended to STEEPLE
and STEEPLED, adding education and demographic factors. It is a part of the external analysis when
conducting a strategic analysis or doing market research, and gives an overview of the different
macroenvironmental factors that the company has to take into consideration. It is a useful strategic tool for
understanding market growth or decline, business position, potential and direction for operations.

The growing importance of environmental or ecological factors in the first decade of the 21st century have
given rise to green business and encouraged widespread use of an updated version of the PEST framework.
STEER analysis systematically considers Socio-cultural, Technological, Economic, Ecological, and Regulatory
factors.

The Model's Factors

• Political factors, are how and to what degree a government intervenes in the economy. Specifically,
political factors include areas such as tax policy, labour law, environmental law, trade restrictions,
tariffs, and political stability. Political factors may also include goods and services which the
government wants to provide or be provided (merit goods) and those that the government does not want
to be provided (demerit goods or merit bads). Furthermore, governments have great influence on the
health, education, and infrastructure of a nation.

• Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These
factors have major impacts on how businesses operate and make decisions. For example, interest rates
affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates
affect the costs of exporting goods and the supply and price of imported goods in an economy

• Social factors include the cultural aspects and include health consciousness, population growth rate, age
distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a
company's products and how that company operates. For example, an ageing population may imply a
smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may
change various management strategies to adapt to these social trends (such as recruiting older workers).

• Technological factors include ecological and environmental aspects, such as R&D activity, automation,
technology incentives and the rate of technological change. They can determine barriers to entry,
minimum efficient production level and influence outsourcing decisions. Furthermore, technological
shifts can affect costs, quality, and lead to innovation.

• Environmental factors include weather, climate, and climate change, which may especially affect
industries such as tourism, farming, and insurance.Furthermore, growing awareness to climate change is
affecting how companies operate and the products they offer--it is both creating new markets and
diminishing or destroying existing ones.

• Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and
safety law. These factors can affect how a company operates, its costs, and the demand for its products.

Applicability of the Factors

The model's factors will vary in importance to a given company based on its industry and the goods it produces.
For example, consumer and B2B companies tend to be more affected by the social factors, while a global
defense contractor would tend to be more affected by political factors.[3] Additionally, factors that are more
likely to change in the future or more relevant to a given company will carry greater importance. For example, a
company who has borrowed heavily will need to focus more on the economic factors (especially interest rates).
[4]

Furthermore, conglomerate companies who produce a wide range of products (such as Sony, Disney, or BP)
may find it more useful to analyze one department of its company at a time with the PESTEL model, thus
focusing on the specific factors relevant to that one department. A company may also wish to divide factors into
geographical relevance, such as local, national, and global (also known as LoNGPESTEL).

Use of PEST analysis with other models

The PEST factors, combined with external micro-environmental factors and internal drivers, can be classified
as opportunities and threats in a SWOT analysis.

SWOT analysis
From Wikipedia, the free encyclopedia

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SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and
Threats involved in a project or in a business venture. It involves specifying the objective of the business
venture or project and identifying the internal and external factors that are favorable and unfavorable to
achieving that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford
University in the 1960s and 1970s using data from Fortune 500 companies.

A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be
incorporated into the strategic planning model. Strategic Planning, including SWOT and SCAN analysis, has
been the subject of much research.

• Strengths: attributes of the person or company that are helpful to achieving the objective.
• Weaknesses: attributes of the person or company that are harmful to achieving the
objective.
• Opportunities: external conditions that are helpful to achieving the objective.
• Threats: external conditions which could do damage to the objective.

Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the
selected objective may be derived from the SWOTs.

First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the
objective is NOT attainable a different objective must be selected and the process repeated.

The SWOT analysis is often used in academia to highlight and identify strengths, weaknesses, opportunities
and threats[citation needed]. It is particularly helpful in identifying areas for development[citation needed].

Matching and converting

Another way of utilizing SWOT is matching and converting.

Matching is used to find competitive advantages by matching the strengths to opportunities.

Converting is to apply conversion strategies to convert weaknesses or threats into strengths or opportunities.

An example of conversion strategy is to find new markets.

If the threats or weaknesses cannot be converted a company should try to minimize or avoid them.[1]

Evidence on the Use of SWOT

SWOT analysis may limit the strategies considered in the evaluation. J. Scott Armstrong notes that "people who
use SWOT might conclude that they have done an adequate job of planning and ignore such sensible things as
defining the firm's objectives or calculating ROI for alternate strategies." [2] Findings from Menon et al. (1999)
[3]
and Hill and Westbrook (1997) [4] have shown that SWOT may harm performance. As an alternative to
SWOT, Armstrong describes a 5-step approach alternative that leads to better corporate performance.[5]

These criticisms are addressed to an old version of SWOT analysis that precedes the SWOT analysis described
above under the heading "Strategic and Creative Use of SWOT Analysis." This old version did not require that
SWOTs be derived from an agreed upon objective. Examples of SWOT analyses that do not state an objective
are provided below under "Human Resources" and "Marketing."

Internal and external factors

The aim of any SWOT analysis is to identify the key internal and external factors that are important to
achieving the objective. These come from within the company's unique value chain. SWOT analysis groups key
pieces of information into two main categories:

• Internal factors – The strengths and weaknesses internal to the organization.

• External factors – The opportunities and threats presented by the external environment to
the organization. - Use a PEST or PESTLE analysis to help identify factors

The internal factors may be viewed as strengths or weaknesses depending upon their impact on the
organization's objectives. What may represent strengths with respect to one objective may be weaknesses for
another objective. The factors may include all of the 4P's; as well as personnel, finance, manufacturing
capabilities, and so on. The external factors may include macroeconomic matters, technological change,
legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The
results are often presented in the form of a matrix.

SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to
persuade companies to compile lists rather than think about what is actually important in achieving objectives.
It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak
opportunities may appear to balance strong threats.

It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of individual SWOTs will
be revealed by the value of the strategies it generates. A SWOT item that produces valuable strategies is
important. A SWOT item that generates no strategies is not important.

Corporate planning

As part of the development of strategies and plans to enable the organization to achieve its objectives, then that
organization will use a systematic/rigorous process known as corporate planning. SWOT alongside
PEST/PESTLE can be used as a basis for the analysis of business and environmental factors.[7]

• Set objectives – defining what the organization is going to do

• Environmental scanning
o Internal appraisals of the organization's SWOT, this needs to include an
assessment of the present situation as well as a portfolio of products/services and an
analysis of the product/service life cycle
• Analysis of existing strategies, this should determine relevance from the results of an
internal/external appraisal. This may include gap analysis which will look at environmental
factors
 • Strategic Issues defined – key factors in the development of a corporate plan which
needs to be addressed by the organization
• Develop new/revised strategies – revised analysis of strategic issues may mean the
objectives need to change
• Establish critical success factors – the achievement of objectives and strategy
implementation
• Preparation of operational, resource, projects plans for strategy implementation
• Monitoring results – mapping against plans, taking corrective action which may mean
amending objectives/strategies.[8]

Using SWOT to analyse the market position of a small management consultancy with specialism in HRM.[9]

Strengths Weaknesses Opportunities Threats

Reputation in marketplace Shortage of consultants at Well established position Large consultancies
operating level rather than with a well defined market operating at a minor level
partner level niche.
Expertise at partner level in Unable to deal with multi- Identified market for Other small consultancies
HRM consultancy disciplinary assignments consultancy in areas other looking to invade the
because of size or lack of than HRM marketplace
ability

5 Whys
The 5 Whys is a question-asking method used to explore the cause/effect relationships underlying a particular
problem. Ultimately, the goal of applying the 5 Whys method is to determine a root cause of a defect or
problem.

Example

The following example demonstrates the basic process:

• My car will not start. (the problem)

1. Why? - The battery is dead. (first why)

2. Why? - The alternator is not functioning. (second why)
3. Why? - The alternator belt has broken. (third why)
4. Why? - The alternator belt was well beyond its useful service life and has never been replaced. (fourth
why)
5. Why? - I have not been maintaining my car according to the recommended service schedule. (fifth why,
a root cause)

The questioning for this example could be taken further to a sixth, seventh, or even greater level. This would be
legitimate, as the "five" in 5 Whys is not gospel; rather, it is postulated that five iterations of asking why is
generally sufficient to get to a root cause. The real key is to encourage the troubleshooter to avoid assumptions
and logic traps and instead to trace the chain of causality in direct increments from the effect through any layers
of abstraction to a root cause that still has some connection to the original problem.

Criticism

While the 5 Whys is a powerful tool for engineers or technically savvy individuals to help get to the true causes
of problems, it has been criticized by Teruyuki Minoura, former managing director of global purchasing for
Toyota, as being too basic a tool to analyze root causes to the depth that is needed to ensure that the causes are
fixed. Reasons for this criticism include:
 • Tendency for investigators to stop at symptoms rather than going on to lower level root causes.
• Inability to go beyond the investigator's current knowledge - can't find causes that they don't already
know
• Lack of support to help the investigator to ask the right "why" questions.
• Results aren't repeatable - different people using 5 Whys come up with different causes for the same
problem.
• The tendency to isolate a single root cause, whereas each question could elicit many different root
causes

These can be significant problems when the method is applied through deduction only. On-the-spot verification
of the answer to the current "why" question, before proceeding to the next, is recommended as a good practice
to avoid these issues.[2]

MoSCoW Method
MoSCoW is a prioritisation technique used in business analysis and software development to reach a common
understanding with stakeholders on the importance they place on the delivery of each requirement - also known
as MoSCoW prioritisation or MoSCoW analysis.

The capital letters in MoSCoW stand for:

• M - MUST have this.

• S - SHOULD have this if at all possible.
• C - COULD have this if it does not affect anything else.
• W - WON'T have this time but WOULD like in the future.

The o's in MoSCoW are added simply to make the word pronounceable, and are often left lower case to
indicate that they don't stand for anything. While some suggest it should be MuSCoW (to more accurately
reflect the words behind the acronym), MoSCoW is preferred as it is more easily remembered as the capital city
of the Russian Federation.

Explanation

All requirements are important, but they are prioritised to deliver the greatest and most immediate business
benefits early. Developers will initially try to deliver all the M, S and C requirements but the S and C
requirements will be the first to go if the delivery timescale looks threatened.

The plain English meaning of the MoSCoW words has value in getting customers to understand what they are
doing during prioritisation in a way that other ways of attaching priority, like high, medium and low, do not.

Must have
requirements labeled as MUST have to be included in the current delivery timebox in order for it to be a
success. If even one MUST requirement is not included, the project delivery should be considered a
failure (note: requirements can be downgraded from MUST, by agreement with all relevant
stakeholders; for example, when new requirements are deemed more important). MUST can also be
considered a backronym for the Minimum Usable SubseT.
Should have
SHOULD requirements are also critical to the success of the project, but are not necessary for delivery
in the current delivery timebox. SHOULD requirements are as important as MUST, although SHOULD
requirements are often not as time-critical or have workarounds, allowing another way of satisfying the
requirement, so can be held back until a future delivery timebox.
Could have
requirements labelled as COULD are less critical and often seen as nice to have. A few easily satisfied
COULD requirements in a delivery can increase customer satisfaction for little development cost.
Won't have (but Would like)
WON'T requirements are either the least-critical, lowest-payback items, or not appropriate at that time.
As a result, WON'T requirements are not planned into the schedule for the delivery timebox. WON'T
requirements are either dropped or reconsidered for inclusion in later timeboxes. This, however doesn't
make them any less important.
Sometimes this is described simply as "Would like to have" in the future, this however leaves some
ambiguity in the minds of the users as to its priority compared to the other marks.

VPEC-T
VPEC-T analysis is a thinking framework comprising a collection of mental filters or guides. It provides a
"simplified ‘language’ for preventing loss in translation from business needs to IT solutions" [1]and is used when
analyzing the expectations of multiple parties having different views of a system in which they all have an
interest in common, but have different priorities and different responsibilities. System, here is used in the broad
sense of a set of interacting or interdependent entities, real or abstract, forming an integrated whole. It is applied
to 'systems' that range from those as small as a performance appraisal,[2] to ones as large as a criminal justice
system.

VPEC-T ("vee-pec-tee") is used where interaction between agents and communication between parties can
easily result in ambiguity. This form of analysis is particularly applicable where it is likely that the interaction
and communication context is unordered, complex or chaotic, and liable to result in misunderstanding. It is
identified as a new way of carrying out Enterprise Architecture,[3] and also identified as a way to design
services.[4]

VPEC-T was first conceived as a framework to aid those studying information systems, where the conflicting
viewpoints of the parties involved could be a barrier to proper understanding. Examples of such situations are
frequently found at the business/information technology (I.T.) divide.[5] Since the 1990s, I.T. has stolen the
place of Information Systems but I.S. and I.T. are not the same. I.T. is about computers and programs. I.S.
encompasses everything that will surround I.T. for the tasks to be properly completed - people, processes and
information.[6]

The principles on which VPEC-T is founded

VPEC-T is named after the initial letters of the five elements on which it focuses: Value, Policies, Events,
Content and Trust. These elements are present in all information systems and most will be present in some
form even in simpler communications.

Each of the parties involved in describing, discussing or seeking to understand a system, actual or planned, will
view it in the conceptual framework with which they are familiar. Each party will usually have a different view
of the values of the system; their knowledge of the policies embodied in it will vary according to their
responsibilities; they may know of only a subset of the events handled by the system; and they are unlikely to
know of all content required, as content will not always be formal and recognized. Finally, there is the
important question of trust that the parties have for one another, and trust that the system will meet its expected
outcomes. A lack of trust between the parties can affect the success of the system in cases where information is
not revealed, commitment to using the system is not whole-hearted or maintaining 'shadow systems'.[5]

For example, where the analysis in question is a preliminary step in understanding an information system, the
parties involved will include both the business and the Information Technology (IT) functions of an
organization.

Of necessity the language of business users of an information system embraces ambiguity, tacit knowledge and
willingness to change: Business must operate in the environment of a constantly-changing market. Of necessity
the language of the IT function embraces high specification, certainty and avoidance of change: The IT function
must minimize change to systems that require cost, time and risk to implement.[5]
The different conceptual frameworks and associated language of these two groups can cause difficulties in
unambiguous communication (citation needed. It should not be too hard to find a documented example, or
notable source describing an instance). This will likely surface as conflict at some time during an information
system's life cycle.

VPEC-T components

The terms values, policy, events, content and trust are the principle means through which communication
concerning a topic is viewed. Ensuring that these dimensions are all considered, while avoiding technological
issues at an early stage helps to create a balanced and complete view of the system.[5]

Values

The Value filter helps in understanding the value of the desired outcomes to both the individual and the
business. While the value of a system to a business is commonly thought of in terms of profit and income,
market share and cash flow, Values in VPEC-T extends this to include meeting ethical constraints and other
types of goals such as environmental concerns, as well as considering personal values of parties involved as
well as employee satisfaction and retention.[5]

Values constitute the objectives, beliefs and concerns of all parties participating. They may be financial, social,
tangible and intangible.

Examples of values include faster turnaround of orders, more reliable handling of complaints, reduced costs,
and the full range of benefits normally claimed for information systems. VPEC-T seeks further and deeper
meanings of value. For example, a VPEC-T study might conclude that one value of a system is to move control
of a business area from one part of the organization to another, or to gain experience in a new and growing field
of enterprise that might affect the business concerned at a later date.

Policies

Policies are mandates and agreements, including internal policies, legal requirements, commercial contracts and
other constraints that govern what may be done and the manner in which it may be done. Policies may be
internal or external, explicit or implicit.

One of the tasks of VPEC-T analysis is to bring implicit policies to the surface for consideration.[5]

Examples of policies would be limits on credit allowance, limits on value of order based on given criteria,
constraints on the use of personal information, 'know the customer' regulations for financial institutions, export
controls, and weight limits for packages. VPEC-T goes beyond this by pushing on into policies that may be
unwritten, and are implied in departmental customs ("we defer processing of orders for perishable items
received after 14:00 on Friday until Monday morning, and then they have priority") and other informal
agreements or instructions.

Events

In the context of information systems, Events would be business-relevant occurrences. They are real-world
proceedings that stimulate activity.[5]

Examples of events are the receipt of a purchase order, a phone call or email querying a delivery, a customer
signing off on completion of the receipt of a service, or the oral or written authorization of a trnsaction.

Content

Content is the meaningful portion of the documents, conversations, messages, etc. that are produced and used
by all aspects of business activity. Content is the means by which plans, actions, previous references, etc. are
used to determine decisions.[5]
Content in VPEC-T explicitly encompasses a broader spectrum of communication than is generally classified
as "data" in computer-based systems, though business data is certainly included as well.

Content may include:

• Information that is a pre-requisite for the occurrence of an event.

• Information that is required, processed and acted on by actions resulting from an event.
• Information that is spawned from an event occurrence.

Examples would be phone calls to check a credit history, emails about usual delivery patterns and the content
of stores requisitions and purchase orders.

Trust

Studies of and design for information systems will often include consideration of trust between users of the
system and their right to access and change information within it. This aspect of trust should be covered by
Policies of the organization operating the system or providing the service on which it runs.[5]

Trust in VPEC-T is concerned with the trusting (or otherwise) relationship between all parties engaged in a
value system where Trust will be based on intimacy of the parties, one party's credibility in the eyes of another,
and the risks involved. Trust values change with time and circumstances.

Examples might be the discovery that a Purchasing Officer maintained parallel records in a spreadsheet, or the
realization that a member of the project team had an agenda relating more to the authority of a particular
business unit than to the improvement of information available to the business.

Use

These five filters are applied continuously during the early stages of considering an information system. As the
analyst increasingly comprehends the actual situation, the new findings will again be viewed through the five
filters.

VPEC-T has also been recommended as a technique for business-architecture assessment in development of
enterprise architectures. T. Graves in The Service-Oriented Enterprise p.96 proposes: "Use values-mapping and
requirements-modelling techniques to identify enterprise values and their commonalities and conflicts.
Document the results in the ‘universals’ part of the framework. Techniques such as VPEC-T, SCORE and even
classic SWOT analysis will be helpful in identifying the impacts of any values-conflicts."[7]

Graves also cites his use of VPEC-T in Doing Enterprise Architecture p.152 where he says "For this work, the
practice will always be iterative ..."[8]

VPEC-T is used not only for information systems, but also in mediation, communication and group interaction.