Concepts in Business
Dear Colleagues at IMS and JIPT,
This is the fall intern at IMS and today I would like to share an important topic. As a business and economics student at Temple University, Japan campus, I have the opportunity of learning about methods that are substantial when analyzing a company in an industry or your own career. Therefore, I would like to share some of the concepts that will no only help you understand the entire business industry, but how to solve problems of your own at the office when dealing with other people or companies in the industry of consulting.
Companies & Industries
These terms are used to measure company’s strengths, weaknesses, opportunities, and threat such as the SWOT analysis, competitor analysis, and scenario analysis.
To evaluate the business attractiveness such as future revenues it is important to first analyze the company’s standing in the industry. A SWOT analysis gives a detailed view of a company’s present and future conditions. SWOT provides a framework used to evaluate a company’s helpful and harmful internal and external influences. Strength and weakness factors are internal situations that illustrate a company’s current position. Strengths are advantageous components that may place a company ahead of market rivals; it is fundamental to identify potencies, as those are the resources that the company can effectively use to out-perform a competitor. Weaknesses are complications within a business that limit or hinder operations. Opportunity and threat factors are external forces that may predict possibilities and challenges. Opportunities are favorable situations in the business’ periphery that might be beneficial to the development of a company’s strategies, as well as help the company identify ways to grow and progress. Threats involve any adverse situations or trends that may threaten a company’s development and future success. SWOT is a necessary technique used to analyze an industry’s internal and external capabilities. An in-depth study of a business’ environment helps to prepare for potential changes, and will eventually prove to be beneficial for key decision makers.
Once a business in an industry has been evaluated using SWOT analysis it is highly recommended then to highlight the current and upcoming players in the industry as a whole. Competitor analysis is a tool used for understanding a competitor’s strengths and weaknesses and therefore determining future opportunities and threats. Thus it works exceptionally well with SWOT. It is also beneficial for determining ways to outcompete other opponents in the market. For example, a company can make future strategies and preparations that would place them above their competitors in the future. Whether it’s a positive or negative effect the firm still has the competitive advantage in the market.
After categorizing a business or industry condition with the SWOT and competitor analysis strategies now a scenario analysis can be developed. Scenario analysis is a vital tool that expands the benefits of SWOT and competitor analysis by taking the data gathered and consolidating it into multiple future strategies to be used to better prepare the company in the face of future changes. It is ideal to plan for three possible theories in any given situation. The positive theory is the ultimate outcome for the company, but not always possible, so it is best to plan for other outcomes. The negative theory is the most damaging outcome, but perhaps not the most likely; however, by planning for it damage can be minimized. Finally, the most down-to-earth or credible theory is the most likely outcome, thus it is the most important outcome to plan for even though it may not be the most beneficial or detrimental. By formulating plans based on these three different theories, the company can plan for the unexpected outcomes and maximize their time by being prepared in advance rather than waste it catching up to an ever-changing market.
In conclusion, based on these three logical tools it is better to be prepared and have a clear understanding of the position of a specific firm within an industry. SWOT analysis is best used to defining the business’s internal strengths and weaknesses, and external opportunities and threats. Competitor analysis focuses on the externalities faced by the company by analyzing the strengths and weaknesses of the competitors. The two analytical models will lead to the scenario analysis that concludes multiple outcomes, therefore allowing attentiveness to future shifts in the market.
The Job of a Consultant
A business consultant has a vital skillset necessary in the corporate world that people strive for in order to be successful in any type of career. Throughout one’s consulting career we study a variety of cases in order to learn rational thinking needed to make the right assumptions in the real business world. Employees yearn to do well overall in all of their assigned tasks but there are several business skills that an individual must learn to adapt on it’s own with hope to one day become successful senior business consultants.
One of the first priorities for a newly trained consultant is to have an appropriate understanding of several analytical tools. Analytical tools such as the 4 P’s, PESTEL, and Value Chain analysis, allow graduates to understand that there is a limited amount of time to make a decision.
The next necessary skill is the ability to identify biases in the corporate world and understand how they affect human misconceptions. Most decisions are affected by human behaviour, such as cognitive biases. It is important to identify these biases, such as the confirmation bias, overconfidence bias, or regression to the mean fallacy, externally and internally. By being aware that such biases exist it becomes easier to lessen their effect when making decisions as a consultant. This burden is placed upon the consultant rather than the client because of the consultant’s comprehensive understanding of such phenomena and is one of the leading reasons for consultant jobs in the modern era.
Lastly, it is important provide insight through sense making and sense giving so that both clients and superiors understand what is happening in the business. Sense making is not a skill that is easily obtained for it is developed through years of experience. A successful consultant is able to provide insight under strenuous time constraints. Clear communication is a necessity as a consultant; sense giving is being able to clearly explain vital information to a client and giving them clarity in a situation.
In conclusion, a successful business consultant must utilize a multitude of skills learned through experience, rather than studying the concepts as the situations vary. The practicing of critical tools, developing an awareness of cognitive biases, and learning to convey information will lead to success when becoming an experienced consultant.
I hope this can help you in any particular way and I am thankful if you took the time to read my blog.
Have a wonderful week IMS and JIPT!
IMS Intern Fall 2016