economics

The definition of the SWOT Analysis

SWOT analysis definition can be elaborated as a system for distinguishing and breaking down the inward and outer elements that can affect the reasonability of a task, item, place or individual. Both business entities and nonprofit organizations use SWOT analysis. Even individuals can assess products, projects and initiatives using this type of analysis. The inception of this type of analysis can be attributed to Albert Humphrey, who first brought it out in the 1960s and again in the 1970s. According to Fortune 500, many different types of organizations have employed the use of SWOT analysis to help them make educated business decisions.

The reason and place where SWOT analysis is used

As has been explained in the SWOT analysis definition, it helps business organizations make educated business decisions. It is usually used at the beginning or as a part of building a viable strategy for businesses. It is regarded as such a vital tool in business decision making owing to the capability of this analysis to reveal to you success opportunities that were previously unrecognized and of also being able to reveal potential threats before they become too much of a burden for the company. It can help companies identify particular sectors of the market where they enjoy a competitive edge or to help individuals weave a suitable career path by highlighting the course of actions or jobs that would enhance and take advantage of their strengths and talents, while also making them cautious of activities which might hinder progress.

The different components of a SWOT analysis

The name SWOT stands for four individual segments that are intrinsic part of this analysis. These four elements that are part of the SWOT analysis include:

  • Strengths- Resources or attributes that are available to an organization or individual, which would aid in their success.
  • Weaknesses- Resources or attributes that are available to an organization or individual, which might work against their success.
  • Opportunities- Factors that are available externally, but can be capitalized by the organization or individual in order to aid in their success and growth.
  • Threats- Factors that are available externally, but should be remedied by the organization or individual, since they have a huge potential of jeopardizing their success and growth.

Each of these elements is represented in the form of a quadrant, within something known as the SWOT matrix. The SWOT matrix allows companies and individuals to identify and organize each of the resources and attributes that fall under any of the concerned elements. The first quadrant represents threats, the second weaknesses, the third opportunities and threats are written down on the last one.

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KEY FACTORS INFLUENCING YOUR FUNCTIONAL LEVEL STRATEGY AND HOW DOES IT BENEFIT YOUR ORGANIZATION

Functional level strategies refer to the responsibilities that are handed over to different branches that maintain both your business and corporate level strategies. To be specific, these functional strategies stand for the end results you wish to get from the day to day functions of your certain business departments.

As a business, your functional level strategy must be able to highlight the point that businesses need constant support from various functional departments, like, Human resources, production, research & development, accounting, operations, marketing etc. to fulfill their goals. As the next step towards your corporate level strategy, your business’ functional level strategy would require you to –

  • Improve your human resources team by hiring more and more skilled and expert candidates
  • Increase marketing for better brand value, recognition and name
  • Decrease the likelihood of rejections in the production department

For any business, it is extremely crucial to keep up these strategies and work towards fulfilling the objectives of all branches. But, one thing that you must keep in mind while devising a functional level strategy for your business is to make sure that it is aligned with your business level strategies and corporate level strategies.

For instance, if your business strategy is aiming at increasing your brand value and your corporate strategy is directed towards increasing your organization’s market share, then any of your functional level strategies should not be regarding updating the computers of your marketing department.

How Does Functional Level Strategy Benefit Your Business?

The right functional level strategy can prove to be extremely advantageous for your business, and the reason behind it is its specific nature. Although, it is also the specific nature of functional level strategy that makes it more likely to be complicated and hard to achieve in comparison to corporate or business level strategies.

One of the greatest advantages of incorporating a functional level strategy for your business is that it helps streamline your company goals in a more comprehensive and all-encompassing way. This means that once you have worked to create a functional level strategy for your business, each and every employee working in different departments of your organization will be brought together by a unified goal. This is something that will automatically lead to an improved work-understanding, contributing to your organization’s success as a whole.

Looking to Innovate? Start by Improving on Culture and Community!

If you notice carefully, it will neither be the business models nor the products that were innovative, but rather the brains behind them. Hence nurturing a culture where willingly generate and execute creative ideas is an essential skill that every innovation leader looking for a new business innovation strategy must follow.

Many companies are notorious for wasting a lot of potential especially when it comes to creativity. According to the studies published by Adobe and Gallup in the past few years, over 50% of the employees were not engaged at their workplaces while merely one-third of them feel positively engaged at work. The so-called “active disengagement”, as noted by Gallup in another report, costs over half a trillion dollars each year in the U.S. economy alone. Delivering poor customer service, frequent leaves of absence, lack of strategic innovation management, and negative energy in the workplace contribute to this issue as well. These factors have a direct impact on the culture of the workplace and thus on the business strategy and innovation capabilities. In other words, creative workplace culture will drive innovation and result in outstanding business outcomes.

In recent years, a lot of companies have begun interviewing hundreds of executives and employees in the ever-expanding global market. Time and again you will notice that people define how innovative a workplace is along with the leadership practices and the creativity culture established there. Regardless of the industry you’re in or the scope of responsibility you’re tasked with, the leadership styles and culture of the workspace will define the innovation strategy framework of the company and how successful its end results are.

In the research conducted, three determinants emerged from the observations as to what usually motivates employees to perform at their very best. The research has revealed, whether consciously or intuitively, great innovative leaders understand how important it is to satisfy their employees’ main needs: Recognition, Self-Actualization, and Community.

  • Recognition

For motivating high performers and setting an example, the leaders should recognize outstanding performance publicly and openly appreciate them.

  • Self-Actualization

Innovation leaders should help their employees located and build upon their strengths if they want to excel at everything they do.

  • Community

Leaders should go that extra mile and establish not just a feeling of safety, identity, and belonging, but they should also bring forth a feeling of intellectual exchange, inspiration, and connection to an influential external network.

Make Money Blogging

Is it possible to earn money from blogging?

Everyone in this world works to make money. Rather, everyone needs to earn money for a living. In this technology bound world of today, the term “blogging” is often treated as a new job or earning opportunity. And, that is why you also started with your own blogging site. But, you really don’t how to make money from it or is it even possible to make money from blogging? Whether you are running a hobby blog or a blog related to business, it is possible to earn money from it. It is not at all a quick rich job, but with it, you can surely act as a support system for your family and also for yourself. Let’s have a look at how you can easily start to make money from your blogs.

Including affiliated links in your blog content

Affiliate marketing is being known as a powerful tool for monetizing your own blog. It works in simple steps.

  • An advertiser who has a product or service to sell wants to give you commission every time when the buyer comes from your site.
  • The advertiser will provide you with an affiliate link that will track down when a buyer makes a purchase using your link.
  • You can include the affiliated links directly in your blogs or via banner ads.

Utilizing affiliate marketing is really easy. You can use Amazon Associates for making out business with the various affiliate programs.

Use your blog to build credibility

Building up your credibility with blogging can lead you to various opportunities of money making. In case, you are a finance blogger and your blog gets famous with a potential base of readers. You will become popular among your niche and you can get various opportunities for being the co-author of a book. You might also get calls for speaking at a finance conference.

It is not a direct format for making money from your blogs but this thing has worked out for many.

Sell the various forms of digital products

In case you do not want to make money via affiliate ads or if you are looking out for some alternative stream of income, you can start selling digital products on your blog such as eBooks, app plugins, themes, online workshops and many more. For making this a success, you need to assess what your readers want and then roll out your digital products selling venture.

Corporate strategy and its great importance

A corporate strategy supports the outcomes that a company has to offer along with several other methods that will help a company to do so. In simple words, corporate strategy is the ultimate thing that will ultimately determine the scope for the activities of a company. It also helps to a great extent for supporting the goals of the company. In turn, such strategies limit the individual initiatives of a company which fall under the authorization to select the initiatives with a limit on the resources. The importance of a corporate strategy is an effective means for allocating the resources of a company along with improving the competitive position for a company.

Helps in establishing expectations

Companies convey their corporate strategies to the various individual business units which in turn drive the performance and also establish expectations for both the internal and external stakeholders. The corporate objectives focus mainly on the prime key areas such as profitability, productivity and market standing. A company needs to set up some measurable objectives for achieving all of these. It is with the help of the expected outcome that the stakeholders properly align their activities in accordance with the goals and also to make sure that a strategy works out in the perfect way.

Helps in improving the sense of competition

The corporate strategy that you choose has a lot to do with the growth and performance of a company. A strategy helps in deciding various steps for a business with the help of which it competes in the corporate market. It also helps in determining the activities with which the competitive position of a company can be maintained.

Allocates the resources for a company

With the help of corporate strategy, a company can easily allocate its resources for the best business opportunities in terms of investment. While setting up corporate strategies, a company starts by assessing its performance along with several other business units. The company will divest its assets and revise its allocations depending on the findings of its performance. The team leaders generally allocate the resources of a company depending on the desired outcome of every business unit’s opportunities.

Helps in adding shareholder value

Depending on the strategies of a company, the business units can easily improve the value of the investors much beyond the total sum of its assets. By making strategic choices, a company can allocate its resources and thus can improve the value of the company for the shareholders.

 

Outsourcing innovation management to small business, an actual smart idea:

At first glance, outsourcing innovation management to a small business might seem risky but there are many advantages to external innovation management. By outsourcing corporate tasks like IT or accounting, the companies will be able to concentrate more on their USP and be able to act more effectively. However, a lot of the decision-makers cannot imagine having others perform core tasks for them like innovating and managing. In this article, you will get to know how outsourcing of innovation management will boost your business.• Creates the basis for sound decision making

Outsourcing innovation management doesn’t necessarily mean giving up on innovation. Instead, the decisions as to which innovations are supposed to be released in the market should lie in the hands of an external party. Otherwise, it can be difficult to internally convince with the innovation as the company will hardly support such projects.• The love for your own idea can harm the company

If the business has decision-makers with a high level of expertise, they will logically be involved with research and development while formulating their own ideas. This can put them in a tricky position as they will want to prefer their own ideas over others. It would become impossible to treat that idea objectively and evaluate it.• Ensure the USP continues to generate profits in the future

Outsourcing innovation management will ensure that your company maintains its unique selling proposition while creating relevant benefits for new customers thus generating better sales in the future. It is understandable that management would like control and full power of disposal over this area but it would be better if it could be outsourced to innovation management as they are bound to get better results.

The latest wave of businessmen never hesitates in taking tips on the internet and reading blogs to improve their day-to-day working. One of the best blogs that you can read and implement to improve your business and marketing is blogexperts.net. The blog would be an excellent motivation for those who like to innovate and come up with new ideas. They have an excellent string of informative articles that will surely help you understand and adapt to the current market.

Product Edge

#Strategy Friday #3 Edge Strategies

Welcome to my blog, where I discuss everything from Innovations and Strategy.

Today topic is about competitive strategy and corporate strategy.
More precisely on how resources and competencies align with customer requirement and corporate strategy.
This topic is still in review, but I decided to publish part of the reading which I am doing.
Companies to succeed need to align their offering with what costumers and consumer requirements.
By aligning their product edges, as defined in their book Alan Lewis and Dan McKone, corporations can gain more profit from their buyers.
By asking questions such as, what else is possible to do, and what current capabilities align with what the buyer search, companies can improve their marketing strategies.
This is seen in the first edge, product edge.

(taken from edgestrategybook.com)

Product Edge

In the book, it is given the example of Best Buys and Geek Squad, but in Europe, Best Buys (or better explained, as the customer support for installing a TV at home by the customer premises) is not present, so I’m going to provide the example of Apple and their Genius Bar.
Whenever buying an Apple Product, at an Apple Store, Apple provides some small technical knowhow introduction via their Genius Bar, a service which is complimentary but not obliged to offer so that can facilitate the implementation of their product in businesses. So from that they earn the happiness of new costumers which appreciate the sale of this complementary service.

#Journey Edge #Enterprise Edge

Last but not least, is the Enterprise Edge, which in the book is defined as finding new revenue through existing capabilities. The example provided in the book is Toyota and the sale of its GPS Data to municipalities for traffic coordination.

Open Innovation VS Closed Innovation

Welcome to my blog, in this blog i discuss about innovation, management and business strategy.

Today topic is a discussion between a concept in innovation that is defined as type of innovation strategy.

Nowadays, innovation discussion is clearly a critical dimension in any dynamic approach to business, as it allows businesses to achieve and defend competitive advantage.

Closed innovation, is the more classical approach to innovation, and in such, it develop patents, (intellectual property, licenses and grants) through formal means, and closed corporations.

Open Innovations is more related to the development of technology through adiacent and common techniques, such as outsourcing, competition establishing, and game theory.

Open Innovation, as defined by Dr. Henry Chesbrough in his book, is: “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively. Open Innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas ideas, and internal and external paths to market, as they look to advance their technology. (Chesbrough, Open Innovation, p.2).”

Here is a graph of the two distinct type of innovations as explained in his book.

Graph explaining the different type of innovation strategy.

In the past i had the privilege of working for a short time period in both type of organisations, closed ones and open ones. I wont say which organisation for reason of privacy. But they were large organisations.

In both organisations the important aspect was the development of work in which was happening. I noticed immediately that in the open innovative business communication was more open and the setting of collaboration was more direct, whereas, the type of collaboration in closed innovation was more secretive, as patents and new research and development techniques were happening.

Personally i preferred the open innovative business, which allowed to learn new skills such as Wiki development and learning Marketing first hand and people skills. Working in open innovative companies is like working for a new startup, in which capital is limited, but passion is everywhere, and there is will to improve even when there are limited resources, whereas working in closed innovative companies is challenging as resources are present, but competition drives the work.

Today topic is more of a self reflection and less of a guide, compared to previous topics.

However, I will post a second article about Edge Strategy soon, as I am reading a book about it, and will be related to Corporate Strategy.

Digital Disruptive Technologies

Today’s topic of innovation management goes and discuss an important trend started by a research of Harvard Professor Clayton Christensen.

The topic is one of Technological Disruption. The main force, which allows small incumbents to compete against large players in the marketplace.

Not everybody is aware of this trend in Innovation Management is almost 30 years old, started in 1995 goes and analyses various technologies and industries in which innovations have brought to its knees big corporations.
As discussed in his introduction in the Innovator Dilemma, companies often fail because there are cheaper new technologies which allow targeting future customers revenue, even if at the time of the release of the original product they are unaware of the latest Technology.
Clayton divided its book into ten chapters and discussed in the first chapters about the failure to implement these new innovations.
At the same time, goes and proceeds by explaining success strategies in the field of business.
It’s essential to notice that most of the literature is wrong to target only to failure, but he builds his case against valid points. There are other schools which also sustain his thesis, which, define that most often is the management fault of big companies which make the company fail to implement or develop new technologies. In recent times, it is explained that this failure in management is not only due to new cheaper Technology, but also because successful companies try to compete in new market segments which are not ready.
There is a rationale behind all that, and that with the advent of the disruptor, the existing player has already focused its energy on his current strategy, thus, is unable to concentrate his effort to the new Technology.

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In my latest article, I gave a little explanation of what disruption management should be about, but I forgot to mention the importance of disruption in business.

According to research from Stanford University, every disruption brings prosperity as GDP grows, and so does the spending.

Currently there the trend is in the banking industry.
New technologies have been developed that allow for a better mobile banking experience, and the economist goes and explains that there could be saving for each person if these new technologies are implemented.
Currently, I have not completed the section about disruptive technology because it is a chapter which I’m reading currently about in my literature research, so please do allow me some more time to collect more informations about new technologies such as bitcoin and blockchain and how they can be implemented in other markets and industries, not only in the financial sector.

Currently, I’m also reading Hernando De Soto, Why Capitalism Triumph in the west and fails elsewhere, and I believe that this two topics can be interconnected, as his thesis is about property law and services to extralegal, and I’m becoming a fan of this topic.

Strategic Innovations Type

Welcome back to my blog, for today argument i return on the topic of innovation.

As many of you are now aware, Innovation is a huge subject, and does not have for the moment any specific metric on how to measure technology development.

But, in my studies, i came across on certain definitions that help in defining innovations, and these are the category explained also in method.org about innovation types, http://method.org/note/incremental-vs-modular-vs-architectural-vs-radical-innovation.html

extracted from an HBR Article from 1990 from Henderson and Kim, found at http://www.jstor.org/discover/10.2307/2393549?uid=3739448&uid=2&uid=3737720&uid=4&sid=21102575016673

On one hand there are defined incremental innovations such as incremental innovations which is the upgrade of existing products or services and there are radical innovations which is the total development of new products and services.

On the other hand there are the architectural innovation which are the reconfigurations of the systems of component that constitute the product but the core remain the equal and there are modular innovations which is the reconfiguration of the links between the core processes and the componenst without reconfiguring the architecture.

All this is related to the role of creativity in innovation, more precisely on the types of innovative products is possible to have in innovation management.

Is almost impossible to come up with brand new ideas nowadays, in an instant but there are tricks which are taught on how to be innovative, and this blog post help in analyse the type of innovations available on the market.

To provide an example of the innovations: modular innovation is the creation of a new prototype for example the application of new standards in technology in new innovative products. incremental innovation is more related to upgrades, architectural innovations are more internal revolutions and radical innovations are existing component in new technologies.