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Key Success Factors (KSF) and index of key success factors introduction
What They Are Why We Use Them
Key Success Factor (KSF): Key success factors: Any dimension in which excellence is crucial for Determines at what companies must excel to be successful competitive success, for example: in a business or segment Parts of the marketing mix They should be the logical outcome (the so what) of PEST, Porter etc. analysis Research and development Index of key success factors: Low-cost manufacturing Evaluate competitors strengths and weaknesses in areas Also known as a critical success factor (CSF) that are critical to success Analysis of KSFs is crucial in most studies of To position our client relative to competitors competitive strategies: Skill is in identifying appropriate KSFs Strengths & Limitations Index of key success factors: A summary table that scores and ranks each Benefits: competitor against the KSFs for the business or If rigorously applied, clarifies what capabilities or skills segment companies need to compete successfully Note: Index allows us to quantify competitors relative strengths The important insights come from understanding what THIS IS A PARTIALagainst KSFs PREVIEW is key to success in the industry or segment: Index provides a structured, concise technique for The index is simply a device to display the output comparing document and You can preview the full PowerPoint competitors Refer to section on industry dynamics Drawbacks:
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The KSFs and comparative index are only as good as the business understanding and judgement used to develop them
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Key success factors and index of key success factors how to apply them
Key Success Factors Index of Key Success Factors
Determining KSFs requires a thorough understanding of a The purpose of developing an index of KSFs is to business or segment, and therefore draws on several of understand: other analytics in the toolkit. Which ones are most important Relevant issues in understanding the business or How competitors perform relative to each key success segment are: factor How customers buy, and whats important to them in Ranking KSFs, and scoring competitors, requires a good the purchase decision: understanding of the business or segments See key purchase criteria Key steps in the process for ranking and weighting KSFs: Whos successful in the business or analytic segment, Identify KSFs (see box, left) and why. See: Give each KSFs a weighting reflecting its relative Company analysis importance (this is a non-trivial task): Financial analysis How would you allocate investment resources for a competitor? Trends within the business or segment Other sources of insights into key success factors are: Score each competitor against each key success factor: Clients executives/staff Document Industry analysts or commentatorsTHIS IS A PARTIAL PREVIEWthe rationale for each score Add up the total scores for each competitor Determining KSFs is an iterative process: initial research, developing draft hypotheses, testing and, refining these Convert the total for each competitor into a percentage You can preview the full PowerPoint document and hypotheses (i.e. what proportion of the perfect score it achieved?) download it at http://learnppt.com/powerpoint/ the relative The resulting percentages indicate performance of each competitor
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Key success factors and index of key success factors illustrative output
Effective Distribution Strong Brand Innovative Product Tiered Pricing Multiple Segment Participation Low Cost Manufacturing High R&D spend Total
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Note: The scale does not matter. A five-point maximum per factor is convenient because people are used to making five-point scale evaluations.
You can preview the full PowerPoint document and = 90% = 52% = 100% download it at http://learnppt.com/powerpoint/
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Specific focus is on industry Frameworks allow user to understand interrelationships between industry structural components Can force more macro level focus (beyond industry boundaries)
While excellent source for industry-wide KSFs not so useful in determining firm-specific KSFs
Industry Micro
Industry association Means of soliciting conventional executives wisdom about industry and firms Financial analysts Subjective information often not specialising in industry discovered with more objective, Outsider familiar with firms formal and analytical approaches in industry Knowledgeable insiders who work in industry
IV Analysis of competition (focus is limited to the competitive environment, how firms compete)
advantage of detailed, specific data development limited to YouMicro preview the full PowerPoint document and can Line managers Internal consultants Depth of analysis leads to better competitive arena (as opposed to it at http://learnppt.com/powerpoint/ industry structure approach) means of justification downloadExternal consultants
Industry
Staff specialities
Note CSFs = Critical Success Factors. Source: Leidecker and Bruno, Identifying and using Critical Success Factors, 1984.
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END OF PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
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Questions & feedback? Email me dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 7