Critical Success Factors or Key Success Factors (KSFs)
The generation of Critical Success Factors CSFs (also termed KSFs) usually takes place at the end of the external analysis stage in preparation of the start of the appraisal of the organisation internally. CSF generation is a method of bringing the many factors identified from external analysis into a manageable list of issues which strategy should address.
CSFs are those factors which are crucial to the success of any organisation within an industry. They should apply to all organisations within the strategic group. The analyst should have completed detailed work considering every aspect of the environment as well as competitor analysis. CSFs can also be identified at the end of internal analysis when the analyst may have a better picture of the organisation and how it compares with competitors when measured against the industry’s critical success factors. Hints for generating CSFs
The list of CSFs should probably not exceed 6, and ideally should be 3 or 4 - otherwise the situation becomes unmanageable. It is suggested that the student starts by looking at the results of the analyses for the external environment and names some CSFs. What is happening in the market and which trends must be focused on. Which would present threats if unacknowledged? Where are the opportunities for strategic advantage? Successful CSF generation involves linking various points into one factor which encompasses several of the identified factors. Subtlety and simplicity is all. In practice it can take days of work to really feel as if you have hit the nail on the head!! Further Reading:
Managing on the Edge Richard Tanner Pascale (1990)
The Fifth Discipline Peter Senge (1990)
Dip into Long Range Planning (library Journal) to see how CSFs are identified Examples of CSFs or KSFs
Cola industry: Branding & distribution
Clothes retail: Design (sourcing), logistics, plus currently ‘flexibility in product...
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