Reposition! Refocus! Reengineer! These are just some of the buzzwords we hear! They ask you to turn around, look back and take a second glance at processes, efforts and targeted markets.
Indeed there will be times when more than one look would not be enough, so let's all sit down and take a similar but slightly different approach in analyzing the external business environment.
Being a pharmacy graduate I only had the chance to look at external business environments when I joined the pharmaceutical industry as a medical representative in 1996.
Taking up my MBA the following year strengthened my knowledge of opportunities and threats in an analysis that is part of the good old SWOT matrix that remains relevant to this day.
As I became a senior manager I have come to realize that there were times when opportunities and threats eventually turned up only as potential opportunities and threats. They never happened nor materialized. By this time I felt that there may be a need to classify external factors as to whether they are already “existing” or whether they are only “potential”.
Opportunities and threats may only be potential factors that need to be acted upon or need to act upon your business in order to have an effect. External factors already existing may then be called drivers and barriers. These are things that are already in place and already has an effect on your business.
Thus, an existing law may be a driver or a barrier whereas a pending bill in Congress may be an opportunity or a threat for your business. A new competitive product introduced in the market may already be a barrier but a new product submitted to a regulatory agency for approval remains to be a threat.
It is important not to confuse drivers with strengths and barriers with weaknesses. Strengths and weaknesses are internal factors while drivers and barriers are existing external factors. These four categories may interact and be used as factors in 're-analyzing' the external business environment. Factors existing that affect your business positively may be categorized as 'drivers' while existing factors that have a negative impact may be labeled as 'barriers'. There are also potential factors that in the future may affect the business positively and negatively.
In the order of battle I recommend that we first reinforce the drivers that help our business. The increase in minimum wage, although a cost in the short term, may be seen as a business driver since it may lead to more stimulated and productive workers in the long term. We can then move on to remove barriers (if we can) to further growth and capitalize on opportunities to achieve exponential success. The increasing prices of oil is definitely a barrier to a lot of businesses but opportunities may be on the alternative sources of energy like bio-fuels and methane which may help stave off the impact of the continuing increase of traditional oil prices in the future.
As we are doing these, we must always keep an eye out for the threats and attempt to neutralize them as necessary. Drivers and barriers may then need immediate attention while opportunities and threats would not necessarily require any action. This could be considered situational and may depend on the urgency and gravity of a certain threat or the attractiveness and resource requirements of pursuing an opportunity.
from Managing for Society Column Manila Times (Print & Web Editions), May 20, 2008 Enrique Antonio B. Reyes, RPh, MBA
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