1. What you will learn
This lesson gives you the outcome map for the programme and a diagnostic showing where your business stands against it. You will learn the eight areas assessed here, how to score each with evidence, how to tell a weakness from the constraint that is actually limiting you, and how to turn low scores into actions completable within a week.
2. The idea explained
An outcome map states what you should be able to produce at the end, so the programme has a destination rather than a syllabus. Here the outcomes are a competitive baseline, an advantage statement that survives the copying test, a countable market with your share, a refusal list, one completed cheap test, and a ninety-day plan.
The diagnostic scores eight areas: competitive position, customer and market clarity, offer and differentiation, pricing and margin, acquisition channels, retention and switching costs, capacity and operations, and cash and funding discipline.
Two features keep it honest. Evidence: each score needs something you can point to, a number, a document or a specific event. Forced distribution: at least two areas must score two or below, because almost every business has two genuinely weak areas and a pattern that hides them measures nothing.
Then the harder question: which weakness is limiting you now. A business may score two on differentiation and three on cash, but if cash runs out in five weeks, cash is the constraint. Equally, a business with good cash and no differentiation has a constraint that will bite the moment a serious competitor arrives.
There is one test specific to this programme. For each weakness, ask whether it is a problem you can fix from inside your business or one that depends on the market accepting something new. Internal weaknesses, such as no capacity measurement or no price comparison, can be fixed within weeks at almost no cost. Market-dependent weaknesses, such as building an advantage or entering a segment, take quarters and may not work at all. Fix the internal ones first, because they are cheap and they sharpen your judgement about the market-dependent ones.
Apply it
3. How to apply it in your own business
Score each area from one to five with one line of evidence. Where you have none, score one, because an unmeasured area is an unmanaged one.
Apply the forced distribution. If nothing falls to two or below, the usual hiding places are differentiation and capacity.
Label each low score as internal or market-dependent, and order your actions so that every internal fix is scheduled before any market-dependent attempt.
Name your constraint in one sentence with the arithmetic behind it.
Write one corrective action per low score, each completable within a week, each with a date.
Worked example
4. Worked example
Vasant runs a wholesale stationery business supplying shops in three nearby towns, with annual revenue of six million four hundred thousand rupees.
He scores himself. Competitive position, two: he has never compared his prices with the two other wholesalers serving the same shops. Customer and market clarity, three. Offer and differentiation, two: he sells the same goods as everyone else, delivered similarly. Pricing and margin, three: he knows his overall margin is about nine per cent but not by product group. Acquisition channels, four: relationships built over eleven years bring most new shops. Retention and switching costs, two: shops buy from whoever is cheapest that week. Capacity and operations, three. Cash and funding discipline, three: he carries stock and gives credit but has never computed the cash tied up.
Three areas at two, so the distribution passes.
He then computes. His nine per cent margin on six million four hundred thousand rupees is five hundred and seventy-six thousand rupees a year. He splits it by product group for the first time and finds that school supplies, about sixty per cent of revenue, carry about six per cent margin, while office consumables, about forty per cent, carry about thirteen per cent. So school supplies give sixty per cent of three million eight hundred and forty thousand at six per cent, which is two hundred and thirty thousand four hundred rupees, and office consumables give two million five hundred and sixty thousand at thirteen per cent, which is three hundred and thirty-two thousand eight hundred rupees. The smaller half of his business produces more margin than the larger half.
Now the internal-versus-market test. His competitive position score of two is internal: gathering rival prices takes a week. His pricing score is now fixed simply by having done the split. His differentiation and switching-cost scores of two are market-dependent, because building either requires shops to value something new, which takes quarters.
So his constraint is differentiation, and it is real, but his first three weeks belong to the internal fixes: rival prices, a stock and credit cash calculation, and a capacity measurement. Those cost him almost nothing and will tell him what kind of differentiation his cost structure could actually support.
5. Common mistakes and how to fix them
The first mistake is scoring from impression. Fix it by writing evidence beside every score.
The second is scoring everything in the middle. Fix it with the forced distribution.
The third is attacking a market-dependent weakness before the internal ones. Fix it by labelling each weakness and scheduling internal fixes first.
The fourth is knowing only a blended margin. Fix it by splitting margin by product group, which frequently reverses your sense of what matters.
The fifth is writing corrective actions that are really projects. Fix it by requiring completion within a week.
Key takeaways
6. Board summary
The outcomes are a competitive baseline, an advantage statement surviving the copying test, a countable market with share, a refusal list, one completed cheap test, and a ninety-day plan. The diagnostic scores eight areas with evidence and requires at least two scores of two or below. Label every weakness as internal or market-dependent, and schedule the internal fixes first because they are cheap and sharpen judgement. A weakness is not a constraint; the constraint is what limits you now, proved with arithmetic. Split margin by product group, because a blended figure often hides that the smaller half of the business earns more.
Check your understanding
7. Practice and self-check
One. Name the eight areas. Answer: competitive position, customer and market clarity, offer and differentiation, pricing and margin, acquisition channels, retention and switching costs, capacity and operations, and cash and funding discipline.
Two. Why must two areas score two or below? Answer: because almost every business has two genuinely weak areas and a pattern hiding them measures nothing.
Three. Vasant's margin is nine per cent of six million four hundred thousand rupees. What is that? Answer: five hundred and seventy-six thousand rupees a year.
Four. School supplies are sixty per cent of revenue at six per cent margin. What is that in rupees? Answer: six per cent of three million eight hundred and forty thousand, which is two hundred and thirty thousand four hundred rupees.
Five. Office consumables are forty per cent at thirteen per cent. What is that? Answer: thirteen per cent of two million five hundred and sixty thousand, which is three hundred and thirty-two thousand eight hundred rupees.
Six. What does the comparison show? Answer: that the smaller half of his revenue produces more margin than the larger half.
Seven. Which of his weaknesses were internal? Answer: competitive position, pricing detail, capacity and the cash tied up in stock and credit.
Eight. Why fix internal weaknesses first? Answer: because they cost almost nothing, complete in weeks, and inform what kind of market-dependent move is realistic.