From idea to strategy > Analyze the environment

Analyze the environment

By analyzing the enviroment you will get a general idea about your competition, your clients, and external factors that may influence your company positivly or negatively. The more you know now about the environment your company will be in, the better you can prepare for it.

One easy method that you can do is a "Pest analysis" on your business. Pest stands for political, Economical, Social and technological factors. Pest is a structure for asking quesions about the environment:

Political factors
Stability of politics, what influence on business, influence on economy and social factors, etc

Economical factors
Interest, inflation, Economic growth, etc

Social factors
Religion, emancipation, family structure, age distribution, attitudes, etc

Technological factors 
effect on business, change rate, barriers for entering, alternative technologies, etc

The etc's are there to indicate you can go on asking and researching on and on. You should try to put your finger on the relevant factors.

You also could investigate the competition (value chain analysis) and current market movements (five forces). A chain value analysis will give you an idea of how the competition works (create value), what their key processes are and what you must to be better.

Making a map of your competitors with as dimensions the areas you think you are strong in, is a great help in understanding the market. 

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