7 key factors for achieving success

Personal growth

Why do you think some projects and companies can achieve success, while others face constant failure? And the answer to this question is quite simple - there are the main factors for achieving a company’s success, which have been used by entrepreneurs and corporations for the past 50 years. And this is not surprising, because their creator has provided a lot of evidence of the effectiveness of this tool.

You're unlikely to listen to the advice of a fat nutritionist or an exhausted therapist. It's the same in business. Any company that engages in management consulting must set an example of prosperity. The creator of the management tool Key Factors for the Company's Success was Ron Daniel in 1961. He explained from a scientific point of view the mechanism of success of departments and the company as a whole.

What are the key success factors?

A key success factor (KSF) is a certain number of areas of activity in which achieving high results guarantees success for a person, company or division in the competition. Simply put, these are the factors or areas on which you need to focus your attention in order to achieve success.

The main success factors are those areas of activity that must work without any major disruptions, only then will this guarantee the success of an individual manager or the entire company. Those. These are the few areas that need to be given special and constant attention to get the most positive results from them.

Key Performance Indicators (KPIs) should not be confused with Key Success Factors (KSFs). KPI is a unit of measurement for success, and KPI is what contributes to success. For example, CFU is the opening of a new store with more favorable purchasing conditions. Actually, due to this, KPIs will be achieved. And the KPI is, let’s say, there should be 10 new clients per week.

Assessing the competitive positions of rival enterprises in the industry

This part of the analysis identifies strategic groups of enterprises operating in the industry.
Despite the fact that all enterprises are united by the fact that they belong to a certain industry, they can differ significantly from each other in various parameters, for example, in size, in the markets in which they operate, in the range of additional services offered, etc. The strategic group consists of competing enterprises with similar competitive approaches and market positions. The technique of identifying strategic groups is called strategic group mapping. The sequence of actions is as follows.

1. Determination of characteristics that differentiate enterprises in the industry. Typical characteristics may include:

price/quality ratio (high, medium, low);
geographic market (local, regional, national, group of countries, global);
degree of vertical integration (absent, partial, high);
assortment (wide, narrow);
distribution channels used (one, several, various types);
level of service (absent, limited, most complete).
In specific cases, additional characteristics that are important for analysis are used.

2. Placement of enterprises on a two-coordinate map using pairs of specified characteristics.
3. Uniting enterprises falling into one strategic space into one group.

The general procedure for mapping strategic groups is described here, although the actual technique is more complex. For example, if the selected characteristics are a priori correlated with each other, then such a map is practically useless. To avoid mistakes in the initial period of working with this tool, it is advisable to use pairs of all selected characteristics in order to select those cards (one or more) of strategic groups that seem most interesting.

Examples and features of key success factors

1. Anyone involved in company strategy must be a professional in the area of industry or business in which the company is developing, because any area has its own individual success factors.

2. The success factor of a company must be divided into two areas: personnel management and process management. Neither area should be ignored.

3. An important component in determining the CFU is the company’s mission. The company's success factor is a logical continuation of the task.

4. Nowadays, very often the main factor in achieving success is process improvement through modern technologies.

5. For manufacturers, the success factor is most often low production costs, quality control, and high labor productivity. The best options for CFU will be a balance of these three indicators.

6. For distribution companies, the key success factor is the creation of a global distribution network or retail presentation of goods through competent merchandising.

7. Company success factors related to marketing - advertising, brand strength, guarantees.

8. In the service sector, the success of a company depends on design, speed of service delivery and, of course, on the qualifications of employees.

9. If we take the human factor, then the success factor here can be: a culture of communication, an effective method of accepting change, an effective communication system, the development of team spirit

Assessing the forces of competition

When assessing the forces of competition, M. Porter’s model is used, according to which competition in any industry is the interaction of five competitive forces:

competition among existing firms in the industry;
the potential threat of new competitors entering the industry;
enterprises in other industries producing substitute goods;
suppliers;
consumers.

The most significant competitive force is usually competition among existing firms in the industry.
It manifests itself in the desire of rival enterprises to improve their market position, in offensive actions in order to rise above competitors or defeat an individual competitor, in defensive tactics in order to defend their positions. The tools of intra-industry competition are: prices, product quality, appearance of products and packaging, guarantees, additional services, advertising, the ability to implement innovations, the power of one’s own or partner distribution network, and others. At this stage of the analysis, the task is to generally characterize intra-industry competition, determine the rules by which it is conducted in a given industry, and assess the strength of intra-industry competition at present and in the future.

The threat of new firms entering the industry is the next competitive force that needs to be analyzed. Serious consequences of the emergence of such firms are manifested in a decrease in the profitability of the industry, the struggle for the redistribution of markets, and an increase in marketing costs. The magnitude of the threat of the emergence of new firms depends on the profitability of the industry in relation to the average in the national economy and on the presence and significance of entry barriers.

Barriers to entry are obstacles that must be overcome to compete successfully by creating the necessary reserves to do so, and which do not usually exist for firms within an industry. Barriers to include:

Economies of scale. If this factor operates in the industry, then the newcomer must immediately enter large volumes in order to be competitive. This requires significant investment and organizational expertise.
Difficulty in accessing production experience and production secrets.
Customer orientation towards well-known brands and their commitment to products known to them.
Large capital requirements unrelated to economies of scale.
Specific industry advantages of existing firms, which a priori provide them with lower cost opportunities. For example, this may be related to access to raw materials or other resources, or to the most advantageous location.
Access to distribution channels. Existing firms are one way or another trying to bind members of distribution channels to themselves, which creates additional difficulties for newcomers.
State regulatory policy in relation to this industry.
International trade restrictions.

Suppliers, as a competitive force, can influence the competitive position of the industry by raising prices for their products. The extent to which they are able to do this, or how strong the threat of doing so, depends on the strength of the suppliers. are considered to have great power if the following conditions exist:

The products they supply are critical to the quality of the industry's products.
There is little or no competition from substitute products.
Supplier concentration is higher than in the industry.
Suppliers' products are differentiated.
The industry is not one of the most important customers.

Buyers, like suppliers, can influence the competitive situation in an industry with greater or lesser power. Buyers are considered to have great power when:

products are standardized and not differentiated;
buyers are insensitive to the costs associated with replacing suppliers;
the quality of products from buyers does not depend decisively on the products of the industry;
buyers are well informed about the industry situation.

The most unpleasant competitive situation in an industry occurs when competition among operating firms is strong, barriers to entry are low, competition from substitute products is strong, and suppliers and customers have sufficient power to influence the situation in the industry to achieve their goals.
However, even when all five forces of competition are significant, an industry may remain attractive to individual firms that manage to defend their positions through their strategies. A successful strategy must address two issues regarding competitive forces:

isolate your enterprise as much as possible from the negative influence of industry competitive forces;
use the current situation in the industry and the rules of the game to your advantage.

Key success factors and development strategy

Step one.

In order to determine the main KFU of the organization, it is necessary to create a “strategic session”, where the company’s managers, who were selected by management, will participate in the planning group.

Step two.

The first thing to do is to think in writing and provide your suggestions for what needs to be learned and what needs to be done by all participants in the session.

Step three.

They read out their proposals with justified arguments.

Step four.

Determining two or three success factors. This is a major part of the process of finding a CFI for a company.

Step five.

Based on the selected KFU, make a SWOT analysis, where weaknesses and strengths, threats and opportunities are determined based on and taking into account key success factors. In the future, SWOT analysis is used for detailed planning to determine the vector of change and the funds allocated for this.

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Determination of the main economic characteristics of the industry

An industry is understood as a group of enterprises whose products have common consumer characteristics and which compete in the same consumer market.
As part of this stage of analysis, it is necessary to obtain answers to the following questions:

market size;
market growth rates and industry position in the life cycle (early development, rapid growth, maturity, saturation, aging and stagnation, market and sales decline);
scale of competition (local, regional, national, group of countries, global);
the number of competitors and their comparative sizes;
the number of buyers and their comparative sizes;
the presence of vertical integration in the industry;
the ease or difficulty of entering and exiting the industry;
the pace of technological progress in the industry;
the degree of differentiation of competitors' products (highly differentiated, weakly differentiated or almost identical);
presence of economies of scale;
whether the achieved level of productivity is critical for reducing costs;
the level of profitability in the industry in comparison with the average in the national economy.

Pedantic type.

According to Leonhard’s accentuation, this is a very neat person, which he demands from others. He does not pretend to be a leader and is rarely the initiator of conflicts. Such people are overly arrogant and demanding, however, they are very conscientious in business and reliable. It is characterized by rigidity, inertia of mental processes, and prolonged experience of traumatic events. Rarely enters into conflicts, but at the same time reacts strongly to any manifestations of disruption of order. Punctual, neat, scrupulous, clean, conscientious. Assiduous, focused on high quality work and extreme accuracy, prone to frequent self-examinations, doubts about the correctness of the work, and formalism.

External manifestations of this type are increased accuracy, desire for order, indecisiveness and caution. Before doing anything, such a person thinks long and carefully about everything.

Behind external pedantry is a reluctance to make quick changes and an inability to make them, and a lack of desire to accept responsibility. These people love their usual work and are conscientious in everyday life.

Introverted type.

Such people are out of touch with reality. They draw their strength from solitude and reflection. They really don’t like noisy large companies, they quickly get tired of long-term communication, but one-on-one communication is acceptable for them, they are excellent partners. Introverts are quite reserved and always adhere to their own beliefs. However, they are too persistent and stubborn, it is very difficult to convince them; their own point of view is always the only true one for them. He lives not so much by perceptions and sensations as by ideas. External events as such influence the life of such a person relatively little; what he thinks about them is much more important. If a reasonable degree of introversion contributes to the development of independent judgment, then a strongly introverted person lives mostly in a world of unrealistic ideas. The favorite food for thinking of introverts is problems of religion, politics, and philosophy. Unsociable, keeps aloof, communicates when necessary, loves loneliness; self-absorbed, talks little about himself, does not reveal his experiences. Slow and indecisive in actions.

This type is characterized by relying on their life experience. This type is not affected by various situations. The degree of immersion in the inner world leads a person to a separation from reality. Characterized by an emphasized tendency to think and a weak readiness to act.

Is it possible to easily identify the type without a test? If you are interested, please contact a psychologist.

Modified: 04/30/2019, 19:39

Demonstrative type.

People of this type strive to show themselves in society, they love to be the center of attention, communication comes easily to them. They tend to start intrigues. These people are attracted by their originality, activity, artistry, and they are also able to interest anyone in anything. However, according to Leonhard's theory, people dislike this type because of excessive self-confidence, egocentrism, and laziness. They provoke conflicts. Characterized by demonstrative behavior, liveliness, mobility, ease of establishing contacts, and artistry. Inclined to fantasizing, posing and pretense. He has an increased ability to repress, he can completely forget what he does not want to know about, which unchains him in lies. Usually he lies with an innocent face, because what he is talking about, at the moment, is true for him; Apparently, he is not internally aware of his lie, or he is aware of it without remorse. Lies and pretense are aimed at embellishing oneself. He is driven by a thirst for constant attention (even negative) to his person. This type demonstrates high adaptability to people, emotional lability in the absence of truly deep feelings, and a tendency to intrigue (with an outwardly soft manner of communication).

The main feature of a demonstrative personality is the need to make an impression, attract attention, and be in the center of events. This manifests itself in vain, often deliberate, behavior, in particular, in such traits as self-praise, perception and presentation of oneself as the central character of any situation

Much of what such a person says about himself often turns out to be a figment of his imagination or a significantly embellished account of events.

Unusual personality

The ancient Greek philosopher Diogenes gained fame as the most extraordinary personality for many centuries. He helped people look at the world around them in a new way. The scientist lived in a wine barrel. He had practically no property: a staff, a bowl for water and a bag for food (bread). In his perception, happiness is independence from external manifestations of reality. The wealth of a sage is work, perseverance, movement. Freedom and the ability to feed yourself is true happiness. The goal of life according to Diogenes is strength of spirit and body. He considered those who lived idly and sought pleasure to be empty and worthless. They insulted the very essence of man.

Attitudes towards ancient scientists were different before and now in the modern period. For many, his life choice is an eccentricity. For others, it’s a life position. But everyone agrees on one thing: not everyone is able to give up comfort in order to prove their convictions.

Excitable type.

These people are unsociable, their actions and reactions are slow, but they can be quick-tempered and irritable. They often provoke conflicts and can be rude and rude. Positive traits include neatness, love for small children, as well as reliability and conscientiousness. This type is characterized by insufficient controllability, weakened control over drives and impulses, and increased impulsiveness. This type is characterized by instinctiveness, anger, intolerance, and a tendency to conflict. There is low contact in communication, heaviness of actions, and slowness of mental processes. Work and study are not attractive to him and he is indifferent to the future. Lives entirely in the present. Increased impulsiveness is difficult to suppress and can be dangerous to others. Can be domineering, choosing the weakest for communication.

A feature of an excitable personality is pronounced impulsiveness of behavior. The manner of communication and behavior largely depends not on a rational understanding of one’s actions, but on an impulse, drive, instinct or uncontrollable urge. In the area of social interaction, representatives of this type are characterized by extremely low tolerance.

Analysis of closest competitors: what are their possible actions

The study of specific competing enterprises comes down to an analysis of today's policies and potential steps of their closest competitors.
This is a difficult task, but correctly assessing the actions of competitors gives the company the opportunity to prepare for them and take advantage of emerging opportunities. The intentions of closest competitors may require enterprises to prepare to defend their positions or develop a plan for active offensive actions if there are prerequisites for weakening the positions of their closest competitors. On the other hand, it is necessary to predict the actions of competitors in response to the intensification of their own competitive strategy. It is clear that you cannot predict the future actions of competitors with absolute certainty, but you can get closer to understanding their approaches. The analysis is based on an assessment of the current position of competitors, trends in its change and the competitive strategy used. There are three basic competitive strategies: cost leadership, product differentiation and focus. The procedure for analyzing each competitor can be divided into six stages:

Assessing the scale of competition: local, regional, national, group of countries, global.
Assessment of strategic intentions: to be an industry leader, to become an industry leader, to be in a group of leaders, to move into a leading group, to move one or two positions in the industry ranking, to defeat a specific competitor (not necessarily the leader), to maintain one’s position, to survive.
Goals regarding your market share: aggressive expansion through both acquisition and internal growth, increasing share through internal growth (by reducing the shares of other firms), expansion through acquisition, maintaining existing market share, willingness to cede share to achieve short-term profit goals (emphasis on profitability rather than sales volumes).
Competitive position: becomes stronger, well fortified, able to defend its position, stays in a certain group, tries to move to a stronger position, becomes weaker but fights, tries to occupy a position that can be defended.
Nature of actions: predominantly offensive, predominantly defensive, a combination of offensive and defensive actions; aggressive, high risk-taking, conservative imitation.
Competitive strategy: leadership in cost reduction, focusing on a specific market niche (high-income group of the population, low-income buyers, geographically defined niche, buyers with special needs, etc.); product differentiation based on quality, additional services, technological superiority, assortment, company reputation, etc.

After the activities of each of the closest competitors are examined from this angle, analysts have the opportunity to confidently plan possible specific moves of competitors, the market segment where attacks should be expected, the competitive tools involved (prices, advertising, etc.) and others options. When the possible actions of nearby competitors become clear, it is then possible to plan a system of countermeasures to support one's own strategy, or measures aimed at strengthening one's own strategy, if the position of competitors allows this to be done.

Introduction

Key success factors are factors common to all enterprises in the industry, the implementation of which opens up prospects for improving their competitive position. The point is not whether a particular firm can or cannot currently implement these factors. The challenge is to identify the factors that provide the key to competitive success in a given industry. Identification of CFU for a specific industry is the first step, which should be followed by the development of activities for mastering CFU specific to the industry. This work represents an essential part of developing the strategic plan of the enterprise, taking into account the nature of the goals and objectives of development, as they are imagined by the management of the enterprise. CFU should be considered as the foundation of the developed strategy. FCIs are not the same for different industries, and for a particular industry they can change over time. However, you can try to identify the basic CFUs, some of which are given below. The task of analysts is to identify the 3-5 most important CFUs in the near future, for example, by ranking all the identified factors that are important for a given industry. They should then form the basis of the enterprise strategy.