The key success factors correspond to the elements that you must master to successfully position yourself in a market and be sufficiently competitive. Their identification is important from the start of your business creation project.
The Entrepreneurs’ Corner helps you understand what the key success factors are, and explains how to identify them and how to use them in the context of your business creation.
What is a key success factor? Definition
A key success factor corresponds to an element of a commercial or technological nature that your company must master in order to successfully establish itself on a market while being competitive. They are directly related to the activity that you are going to carry out. Without mastering them, your project has very little chance of succeeding. They can correspond to:
Essential technologies for your business
Characteristics of the products or services offered,
Skills and know-how,
Means of production and/or distribution
The key success factors are intended to evolve over time and as changes affect your industry. Regular monitoring is necessary to remain competitive.
Why are key success factors important?
The key success factors are at the heart of your strategy, they are necessary to successfully launch your business and face your competitors. If you don’t master them as much as your competitors, you won’t be competitive against them. Your customers will turn their back on you and go to the competition.
In addition, their identification also makes it possible to detect potential competitive advantages. Obtaining such an advantage allows you to distinguish yourself positively from the competition. However, simply mastering a key success factor is not enough to gain an advantage over your competitors. These can be at the same level as you, or above. To gain a competitive advantage, superior proficiency is essential.
The key success factors are important for developing your new business and defining an effective strategy. These are the elements that will allow you to achieve your goals. They also contribute to the search for competitive advantages.
How to identify the key success factors of your activity?
To identify the key success factors, you can rely on two tools:
Your market research, which allows you to carry out the external analysis,
A SWOT analysis which allows the internal analysis to be carried out. The SWOT is a strategic approach to confront your strengths and weaknesses with the opportunities and threats of your market.
Their identification assumes that you know your business, your market, your competitors and your customers perfectly. Indeed, to position yourself in a market, you need to know:
The expectations of your customers
The behavior of your competitors
The expectations of targeted customers are at the heart of a company’s strategy. To succeed, your offer must meet the expectations of your customers. Without meeting an existing need, you will not sell. Then, even if you fill a need, you won’t succeed if you are worse than your competition.
It is necessary to study the competition in depth. Who are they? What do they offer? How do they communicate? What are their arguments? What elements do they insist on?
Then, you also have to think about the elements on which they could improve and the processes that could be more optimized, to find ways of competitive advantages. Sometimes it’s about thinking about a drastic change in the way things are done.
After having identified the key success factors business knowledge necessary to launch your project and achieve your objectives, you must ensure that you have the capacity to obtain them. Do you have sufficient means (human, financial, technological) to achieve your objectives? What are your strengths? What are your weaknesses? Can you compensate them?