Category Archives: Business strategy

SEED Strategic Model

Startup, a meaningful word for today’s enthusiastic world. As this word can be split in “start” and “up”, we could say that the “up” is related to develop and increase the business.

STRATEGY is the high level PLAN to achieve GOALS in times of uncertainty.  Also, “Strategy is how a company achieves its goal by developing its scarce resources to gain a sustainable competitive advantage”. Source: Vaughan Evans – Key strategy tools (Pearson Publishing), 2013

So, because of limited resources, the company needs to manage them effectively. Moreover, gaining sustainable competitive advantage leads to value creation, increasing performance and results for the business owner.

WHAT ARE THE MAIN STEPS THAT A STARTUP SHOULD FOLLOW IN ORDER TO INCREASE ITS VALUE?

This are the main 4 STEPS of BUSINESS STRATEGY that a startup should follow in order to assess, develop and apply an appropriate BUSINESS STRATEGY.

We call this model S.E.E.D Strategy 

1) STRENGTHS: CAPABILITIES ANALYSIS – What does the start-up has in terms of resources, assets, human resource or investments?

2) ENVIRONMENT:  MARKET ANALYSIS  -Who are the main competitors, the target market, the suppliers or the key partners?

3) EXPECTATIONS: STRATEGIC OPTIONS – Where do you see the company in 1 year? 3 years? 5 years? Are there any options for developing the business?

4) DEVELOPMENT: STRATEGIC ACTION – How will you act to obtain the results that you want?

seed

PESTEL model: Factors that could influence a start-up

When starting a new company the analysis of the external factors that influence the market is important because it can prevent future difficulties in running the business.

One of the model used in business strategy is PESTEL model.

PESTEL comes from Political, Economic, Social, Technological, Environmental and Legal factors.

When assessing the level of impact of this types of factors, we first need to know what is the target market, otherwise the analysis could have biases like checking the impact from a larger market. So, is the business targeting global, continental, regional, national or a city market? If so, there are different ways in which these factors are represented.

The decision to start a business is generally fast, based on an idea and potential funding. This means that generally it is little or no assessment of the factors that could have an impact on the business. In early stage of a company, in order to better prepare for the market conditions, knowing these factors could be very useful for the entrepreneur.

pestel geekanalyst.com

So, because these area is quite large, let’s have the example of a tech start-up that wish to launch a new app in Europe.

POLITICAL - this factor would require some analysis of the actual policies in Europe regarding launching the app (operating the business). The political stability is important, because launching a new app might mean targeting specific customers (which in unstable political countries couldn’t be useful). Tax and labor policy should require an analysis too, as IT & software related activities could have separate taxation. Hiring programmers could mean tax benefits in specific countries in Europe.

ECONOMIC - supposing the app is about ordering food. Knowing the actual economic development of the country could assess the level where the app should be present. Knowing the economy of the city could mean tracking area with higher potential customers.

SOCIAL - If the app is addressed to population between 20-45 years old, the start-up should assess the actual age distribution in a city/country, their careers and also responsiveness towards using the app. The issue here is targeting a city in which the actual population distribution is not relevant to reach a certain level of performance.

TECHNOLOGICAL – the start-up should assess the change and future version of its app to further adapt the market needs. The change should be step by step and in close relation with the clients’ opinions.

ENVIRONMENTAL – as climate change is affecting lots of industries and could mean positive impact in the future, the company should adapt the products. (in the food ordering app – new partners that offer BIO- related food should be brought on board)

LEGAL - the key issue in legal factors are licencing, patents or trade-marks that the start-up should register. Protecting your idea is the basis of developing the business.

For more assessment of these factors for your start-up, we are developing consulting/training programs to fit the needs of your business.

Contact us here.

Strategy – the journey for start-ups!

If strategy is achieving goals through efficient planning in order to gain competitive advantage, when our resources are limited, why do we see many start-ups that don’t have an efficient strategy? In many times, the uncertainty and unpredictable environment because their main concern of a new company because of 3 main reasons:
- limited understanding of the target market
- lack of market analysis in order to assess the environment, competitors, potential clients and possible opportunities or threats
- no or limited analysis on financials. If break-even is reached at 95% of potential clients, it is obvious that the rest of 5% (profit) could not reach the expected growth.

Start-ups often forget about the environment, the attractiveness of the sector in financial terms. Of course, in many high-tech new sectors this is also not possible because of lack of historical data. Some start-up owner could argue that there are many examples of companies that started with just an idea. This are exceptions, not the rule! Even if an idea is enough to start the business, basically it is impossible to develop it without a strategic plan, with target goals, assessment of the environment and capabilities in order to produce the most effective formula for action.

If the idea creates the launch of a start-up, the strategic plan prepares the JOURNEY OF A START-UP. 

seed

This is a journey in which the company should focus on the resources (human resources, money, infrastructure, brand, IT), environment (competitors, clients, regulations), expectations (options to be taken into consideration to be applied), and acting upon the plan.

We are developing a free webinar that will be held on December 3, 2014 – Business strategy for startups- click here for details 

More, we are in the process of creating a free E-book: 4 STEPS of business strategy for start-ups.

Ebook Geek Analyst

In order to receive it, register below.

Add your email to receive the Ebook by December 1, 2014

* indicates required