Research is not just about market research - any external information needs can be satisfied using research techniques. Research is an essential part of the decision-making process. Just consider the extent of the external influences on your business - it encompasses customers, competitors, suppliers, contractors, government, etc. directly or indirectly interfacing with your business.

You need to make decisions about how to develop your business - to put together a plan of action which will achieve your long-term financial objectives and shareholder value. This is a consequence of two functions, where the money comes from and where it goes to, and when it comes and goes. Of course, there is an interaction.

Invariably, there are two dimensions to evaluating business plans:

• Return on capital employed: capital employed is the equivalent of the amount of money we have "banked" in the business, so it needs to work harder than any other use we may have for that money. If it can't, then we need to change business or liquidate it and give it back to the shareholders.
• Profitability: once we are happy that our business can deliver our long-term financial objectives, we need to work at increasing profitability to become the best in our peer group, either by increasing sales faster than costs or by reducing the cost of delivery.

In both these instances, the size of the business is not important - turnover is not usually an appropriate financial objective. In fact, many business will have much better ratios by reducing the size of the business - removing marginal business to improve profitability and reduce unproductive resources. If there are growth objectives (perhaps to satisfy the city), it ought not demand a disproportionate amount of capital or lead to margin erosion from marginal business.

Ultimately, we have to consider whether the business we are in can deliver our long-term financial objectives, so there is a time issue. We may need to make the best of what we have now, while developing a better business for the future, perhaps in new markets altogether.

From a strategic point of view, we need to consider:

• The market structure - where is the best business to be obtained?
• Peer group comparison - can the best in the industry achieve our financial objectives? What contributes to their success?
• How should we compete - which market segments would make the best use of our skills and resources?
• Brand value - is there a non-capitalised asset here?
• Market dynamics - how is the market changing in ways that may affect our decisions?
• Customer power/Buyer behaviour - how are customers changing in ways that may affect our decisions?
• Supplier power - do the suppliers determine the materials we use and its pricing?
• Market intelligence - how are we organised to maintain a constant watch on all these issues?
• CRM - what does our own information tell us about the market dynamics and buyer behaviour?