Making Decisions

After you gather information, the next step is to determine how you will use this information make decisions. What insights did you gain during your analysis? How will these insights determine which decisions you will make?

The objective is to use your current information to map out a strategy that will insure your future success as a company. This includes choosing your approach for reacting to industry trends and changes. You may also want to write or revise your business plan at this time.

  • Determine the factors. Which competitive factors are the current issues? Have you found a new supplier? Did you determine that you need to lower your prices? List as many of these as you can before you determine what your strategy will be.
  • Analyze potential profits. Before you implement a new strategy based on a trend or new piece of information, you will need to determine how the change will affect your profits. Your objective will be to determine if your market share changes for the better, lessens, or remains the same. The answer to your analysis will determine if the situation or trend is worth embracing.
  • How will your competitors respond? Another important determining factor is to figure out how your competition will respond to the market trend or industry changes. If you understand your competitor, you can predict their reaction (unless your competition tends to be unpredictable). If you can come up with an educated guess on how your competition will respond, it may give you a competitive advantage.
  • Your possibilities. When you come up with a potential strategy, you will need to create hypothetical situations that will ultimately test it. For example, if you decide to implement a new customer service department based on an industry trend that suggests that customers in general are demanding better service, create different scenarios that will test this. Can any of your test scenarios show how the changes will affect profits?
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