One of the most important and challenging parts of an executive's job is evaluating and determining the company's strategy. The process can be intensive and often requires the expertise of internal subject matter experts as well as outside consultants. Even in small businesses, this process can take significant amounts of time and resources from the owner. However, if done well, it can be the defining factor in the company's ultimate success.
Analyze the company's industry and competitors. Describe the properties of the industry in terms of its maturity, growth rate and fragmentation (whether there are a few major players or hundreds of tiny competitors). List each of the major competitors and what role they plan in the industry; for example, the low-cost leader, aspiration brand or up-and-coming startup. Describe the customers available in the industry, such as small businesses, government branches, middle-class consumers and so on.
Evaluate the capabilities of the business or its founders. Perform a SWOT (strengths, weaknesses, opportunities, threats) analysis that lists the organization's internal strengths and weaknesses, and its external opportunities and threats. Prioritize a list of the company's strengths in order from strongest to weakest, and its weaknesses in order of most to least crippling.
Assess the business's current strategic approach and how well it is implementing that approach. If the business has positioned itself as the low-cost leader, examine whether it has achieved that position. Some businesses may have not defined a strategy yet; in that case, determine what role it has been playing in the industry and how well it is performing financially in comparison to its competitors.
Perform a gap analysis between the company's competencies and opportunities within the marketplace or industry. Make a list of each market need that has not been completely fulfilled, such as underserved customers, operational approaches that haven't been tried or a lack of competition in one of the traditional roles, such as aspirational brand. Then compare that list to the business's strengths and weaknesses. If the business has not performed as well as its competitors nor reached its targets, the company may be trying to compete in an area that is crowded or be relying on skills in which it is weak.