The Grid

Any business is made up of closely interconnected elements, therefore considering only the. single  parts, without keeping in mind the bigger picture, can lead us to erratic decisions and evaluations

The grid is a tool that helps you make decisions, regardless of the type of business that you are running or its size. It helps you think in wholes, and understand what is changing and why.

There are three things that are behind the success of every business:

1. Desirability: your product/service has to be appealing.
2. Profitability: your product/service has to be profitable.
3. Longevity: your product/service must be able to stay on the market for a long time.

These three goals are interdependent and they are influenced by the changes that are constantly taking place.

In the world of business these changes are usually related to:

1. What customers want and how their behaviour might change.
2. The way the market conditions change.
3. How the organization of your business changes.

By representing this data on a grid we end up with the three objectives on the horizontal axis and the three changes on the vertical axis. The areas that converge form nine boxes, which are interconnected and interrelated.

When taking a closer look at the three objectives, the following can be said:

DESIRABILITY is determined by:

1. The wants and needs of the customer.
2. The rivalry we face in the market.
3. The offerings created by our company.

PROFITABILITY is determined by:

1. The revenues from our products or services.
2. The bargaining power we have over our suppliers and clients.
3. The costs incurred by our organization.

LONGEVITY is determined by:

1. The customer base, which is crucial for any business.
2. Imitability: the easier it is to imitate a product, the harsher will be the rivalry, and the shorter the product´s life will be on the market.
3. Adaptability: the more a company is capable to adapt, the more chances it will have to resist on the market.

Each box of the grid matters. Ignoring or neglecting any of these elements will jeopardize the success of any business. Making the right decisions means keeping these nine elements balanced.