Company analysis is essential for any business leader or entrepreneur, allowing you to make strategic decisions based on data-driven insights. With the understanding of these principles at your disposal, you can create a more effective and agile operation that can adjust rapidly to technological accelerations, industry trends and market disruptions. Company analysis is a process that can help you make better decisions. It involves studying the company’s structure, strategy and environment to determine its worth investing in.
In this article, I will explain company analysis and how to do it.
1. Competitive position
- Competitors are the other companies that provide similar products or services. They may be direct competitors, such as a company with a similar product or service, or indirect competitors that offer an entirely different product or service but could be affected by your actions.
- Strengths and weaknesses:
These make your company unique compared to others in the market. Your strengths can include high customer satisfaction ratings, strong brand loyalty and increased revenue over time. Your weakness could be high operating costs or low market share, depending on what type of business you’re in (i.e., retail vs food industry).
- Potential opportunities & threats: These factors describe any changes that could affect an industry’s overall health (either positively or negatively). For example, if there’s been an increase in demand for organic foods, this would represent an opportunity because more people would want them, which means more consumers who need their services! However, suppose someone invented something new, like the self-driving car. In that case, it might mean fewer jobs for drivers, making it harder for some companies like Uber drivers who rely heavily on their income from driving customers around town.”
2. Financial performance
This is the most critical aspect of company analysis. Financial performance is measured by financial statements and used to make investment decisions by investors, lenders, and creditors.
Financial statements include
- Balance sheet – A snapshot of what a company owns vs what it owes at a given time (usually at the end of each calendar year). It includes assets (what they own), liabilities (what they owe) and shareholders’ equity (the difference between assets and liabilities). In addition, the balance sheet may include other relevant items, such as notes to explain these figures or footnotes that provide additional information about specific items on the statement.
3. Products and services
The third principle of company analysis is products and services. This section will focus on understanding what the company produces, how it sells its products, and its reputation for producing quality products, customer service, and innovation.
The first thing you should look at when analysing product lines is whether or not they are related to one another. Suppose two different divisions produce unrelated items (for example, a toy manufacturer also makes health care equipment). Those divisions may be better off as separate companies rather than part of the same umbrella corporation.
4. Strategy, management, and oversight
- Strategy, management, and oversight
How strategy is formulated
Organisations must first understand the environment they operate in to have effective strategies. This includes factors such as competitor strengths and weaknesses; industry trends; customer needs and expectations; regulatory requirements; technological developments that may affect how business is conducted; new technologies that competitors or customers can use (e.g., social media); threats from substitutes/new entrants into markets etc. An organisation’s response to these external forces will determine its success or failure over time (Kotter & Heskett 1990).
An example of this process would be a company deciding whether it should enter a new market by acquiring another company to provide added products/services or developing its product line, which would compete directly with existing products sold by other firms within this industry segment. In either case, there are many factors involved, including economic conditions within each country where both parties reside along with possible legal restrictions pertaining specifically towards foreign companies entering new markets without permission from local governments first being obtained beforehand before making any decisions about moving forward with plans for expansion across borders.
5. Marketing and business development
Marketing and business development are essential aspects of focus during the company analysis. Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organisational objectives. It includes market research; product development; strategic planning; advertising; pricing decisions (e.g., setting prices); sales promotion activities such as trade shows or publicity campaigns; customer relationship management (CRM); developing long-term relationships with customers through loyalty programs like frequent flyer miles.
6. Industry trends and developments in technology
Businesses must be aware of industry trends and developments in technology. Technology is a crucial driver of change, and it has the potential to impact your business in many ways. For example:
- Technology can be used as a competitive advantage. For example, suppose you’re running an online store with an app that allows customers to place orders on their smartphones or tablets. In that case, this could give you an edge over other companies who don’t have such technology available yet (or at least not as readily).
- Technology is another tool that can help improve efficiency, productivity and quality for businesses of all sizes–from small mom-and-pop shops to large multinational corporations with thousands or even millions of employees worldwide!
7. How the company is seen and perceived by its customers, investors, employees, and competitors
The perception of a company is essential for marketing and business development. Merriam-Webster defines perception as “the way something or someone is thought or imagined.” Therefore, how you perceive yourself and your company will impact how others perceive it too. To fully understand how perceptions affect companies, we must first look at the stakeholders who may have differing views:
- Customers – Customers are individuals or groups who purchase goods or services from a company. They provide feedback about their satisfaction with products and services offered by the business; this feedback helps determine whether or not they continue doing business with that particular firm (or whether they recommend it).
- Investors – When investors invest money into businesses as shareholders, they hope for an increase in value over time–this would mean higher earnings per share for each share owned by these investors! However, if these expectations aren’t met due to either poor performance (not enough profits) or bad decisions made by management teams, then there could be trouble ahead…
These are different aspects of a company to consider during company analysis.
Company analysis is vital to understand all aspects of a company before investing or before kicking off its transformation. There are many different factors to consider, such as the financial health of the company, its competitive landscape, and management team. Therefore, researching and consulting with professionals before making any decisions is essential.
Company analysis is the first pillar of my 5 Pillars of Business Growth framework. I would be happy to assist you if you need help conducting a company analysis. Get in touch today for more information.
Bottom Line
We can see that a company analysis is a complex process requiring much research and analysis. It’s best to start with the company’s website, where you will find all the information in one place. You can also use other resources like news articles or investor reports to get more insight into their operations and plans.
Who am I?
I am Dotun Adeoye, a Business Growth Strategist & Author of the 5 Pillars of Business Growth.
I’ve built up my experience via serial entrepreneurship, consulting leadership roles in business growth, business development and product innovation in large companies worldwide in the last 30 years.
Today, I consult with large businesses on how to sustainably grow their businesses, sustain infinite growth, and ensure business continuity irrespective of the business climate.
Hire Dotun Adeoye to Speak Virtually or In – Person at your company’s event to cover this or other topics. You can also get in touch via +44 203 097 1718 or dotun at dotunadeoye.com.
