What is the fatal two percent rule?
Definition of the Fatal Two Percent Rule
When it comes to strategic organization planning, the fatal 2 percent rule is a decision-making method that you can use in various situations. According to the ‘rule,’ companies can set a standard for success or failure by achieving just 2 percent of the overall market share for their effort, idea, or product.’ Achieving this goal is regarded as a success by the company in question. On the other hand, failure to fulfill this 2 percent target can, and most likely will, result in the company’s demise.
As a result, business planning and early strategy are contingent on identifying whether or not a growing firm or venture will be able to meet this revenue growth target of 2 percent in its first year of operation.
So, what is the best way to go about it? A SWOT analysis (which considers the company’s strengths, weaknesses, opportunities, and threats) is an excellent place to start.
How to Conduct a SWOT analysis
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT Analysis is one of the most widely used methods for evaluating a company’s internal and external environments, and it is part of the strategic planning process. You can also perform a SWOT analysis on a product, location, industry, or individual. It aids strategic planning and decision-making by introducing opportunities to the organization and serving as a forward-looking bridge to creating strategic options.
One of the primary goals of a SWOT analysis is to take an in-depth look at every element of a company and determine where it shines, where it is weakest, what opportunities it can take advantage of, and what dangers or hurdles it may face in the future.
A group of people often carries out a SWOT analysis from several parts of the business. Each represents distinct perspectives, insights, and opinions from a different part of the organization. The SWOT analysis method is taking stock and identifying components for each of the four SWOT categories, then combining them in a four-square analysis template that lists everything in priority order for each category.
Attempting to transform the organization’s weaknesses, threats, and barriers into opportunities or strengths should be part of the SWOT analysis process. What can you do, for example, if you anticipate a shift in consumer demand in the coming months? What can you do to widen your offering and meet new needs?
Questions to ask when doing a SWOT Analysis
When creating a SWOT analysis, here are some questions you may ask your team. These questions can aid in the explanation of each part as well as stimulate creative thinking.
Pivoting and adapting to external and internal changes is a critical component of an agile approach. It will also help you win and maintain that critical 2 percent market share – the deadly 2 percent rule – that is important for survival and growth.