6 essential parameters of performing a company analysis
A company analysis is a useful technique to evaluate a company’s business performance in an objective way. Essentially, it’s a process of providing an accurate picture of a firm to help:
- Sales and marketing teams pitch their services better and to the right people in the organization,
- Investors make informed investment decisions, or
- Business leaders identify opportunities for improvement or gather competitive intelligence
The most basic company analysis provides insight into what the firm does, its goals, competitors, and business performance. Depending on the expected outcome, it may include more information to answer the questions of the intended audience.
Here we’ll discuss the key parameters of a company analysis and how to tackle each of them.
Business offerings
The principal objective of a company analysis is to determine what exactly the company does. In most situations, you would get this information on the company’s website. But often, this information can be obscured by marketing lingo that’s trying to differentiate the firm from its peers. So to get this part right, you need to identify the customer needs the company fulfills and the category the firm works in by taking a closer look at their products/services and marketing materials.
Industry analysis
This part provides the context in which a company operates. While the depth of this analysis can vary depending on the expected goals, it typically involves a study of the industry’s maturity, competition, trends, growth drivers and challenges. You can also choose to conduct the following analyses to obtain deeper industry insights. The results from this study helps reveal where the company fits in the big picture.
- Competitive forces analysis – Evaluates potential threats from new market entrants, substitutes, and the bargaining power of buyers and suppliers
- PEST analysis – Factors in the political, economic, social, and technological aspects impacting an industry
- SWOT analysis – Assesses the strengths, weaknesses, opportunities, and threats in an industry
Strategic initiatives
Every company has a specific set of business goals it aims to achieve. Understanding the route it’s taking to fulfill these and the gaps along the path is vital. Whether they are partnerships, mergers and acquisitions, new market entry or product/service-line expansion – you need to consider them to support better decision-making.
Timely information about such advancements can be extracted from press releases, company announcements, articles featured in the media, and thought-leadership content.
Technological capabilities
Technology enables businesses to work more effectively and drives differentiation. It’s an important yardstick of how well a company is prepared to address future challenges and opportunities in its industry. So it goes without saying that evaluating a company’s technological capabilities is a key parameter in a company analysis.
Analyzing a company’s technological capabilities involves collating information about the company’s existing technical abilities, the ones in development and how they stack up relative to its peer group. Looking into the company’s investments, M&A, patents, hiring, and earnings will help provide this insight.
Organizational chart
Organizational charts uncover how responsibilities are distributed across an organization. When used for investment purposes, it reveals whether a company is structured in a way that’s optimal for success. Sales and marketing teams use organizational charts to identify and cultivate relationships with decision-makers.
Furthermore, it offers a holistic view of each management profile, detailing their overall professional experience within and outside the firm, educational qualifications, and achievements. This allows investors to examine the true mettle and pedigree of every decision-maker, thus offering insight into the company’s credibility and industry position.
For pertinent data to create this chart some of the must-browse places are company websites, LinkedIn, press releases, company announcements, and paid and public business directories.
Key competitors
A company analysis is incomplete without studying its competitors. For investors, looking at the major competitors in each line of the company’s business can determine how big the end markets are for its products. It helps them make a balanced decision based on how the company measures up for key metrics.
For sales and marketing teams, it’s always good to know what’s working well for their prospect’s competitors. It helps them recognize the gaps they can fill for their prospects, enabling effective customer acquisition and retention strategies.
