Key success factors

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Key success factors
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Analysis of the key success factors is the method used to analyze the resources and skills of the analyzed company. The main idea here is to specify the most important criteria for the analyzed company. The method is based on the principle of 20-80 where about 20% of all the factors have a significant influence (80% of sample) the results of the company.

Diversity of the key success factors should be emphasized, they are based on type of business and the industry in which the firm operates. To effectively analyze the business, you need to find specific factors, unique to a particular industry. In principle, it is assumed that the number of explicit elements should be more than 2 and less than 6. The most common items highlighted by analysts, are: position in the market, the level of organization of the company, profitability, share of production cost, image of the company, the level of technology.

You should also bear in mind the age of the sector, not only the type of the analyzed factor. For example, for the initial phase, technological level is assumed as having the greatest impact on production, under development stage position on the market is key. The most important in the maturity stage is effectiveness. In exit stage during which a declining costs play a key role performance is most important..


After the above preparation manager can now proceed to the appropriate part of the task, i.e. creating a table of key success factors for the company in question:

Key Success Factors Weight Rating (1-5) Weighted value
Factor 1 E.g. 0,3 E.g. 4 0,3 x 4 = 1,2
Factor 2 E.g. 0,4 E.g. 3 0,4 x 3 = 1,2
Factor 3 E.g. 0,1 E.g. 5 0,1 x 5 = 0,5
Factor 4 E.g. 0,15 E.g. 2 0,15 x 2 = 0,3
Factor 5 E.g. 0,05 E.g. 4 0,05 x 4 = 0,2
TOTAL 1,0 3,2 points out of 5 points possible

Source: Own elaboration

Following the above assessment, the group of analysts has the opportunity to comment on the results, specify the weak links IN businesses which are essential to the company, using the same table to analyze the main competitors on the market to help accurately locate the analyzed company among the major players, and finally create the right strategy to strengthen the weakest links in the company.

Frequently method of scoring of the key success factors are used when creating the ranking lists, created and published annually for various industries.

For even more accuracy, in showing value of the analyzed company, you can also use the analysis of competitiveness profile, i.e. compare your company with a market leader or an ideal company to which management aspire.