Operations & Sourcing method guide
Key Success Factors
Key Success Factors captures what determines competitive success in each product-market group.
Beginner-friendly guide · 4 min read
What Key Success Factors does
Key Success Factors captures what determines competitive success in each product-market group.
Key success factors describe the small number of conditions an organisation must meet to compete effectively in a defined product-market group. They translate external market requirements into internal attention.
A success factor is not a generic aspiration such as quality or innovation. Explain what the market requires, why it matters, how it differs between groups and what evidence supports it.
The make-or-buy method sequence uses success factors to connect external competitive requirements to the internal activities that support them.[1][2]
Success factors connect product-market evidence to the activities and capabilities that must deliver it.
- 1Product-market group→
- 2Customer and industry evidence→
- 3Success factors→
- 4Activities→
- 5Sourcing and roadmap
Original InnovationFlow illustration. Example values and software behaviour are explained in this guide; method sources are listed below.
Understand the method
The parts in plain language
Market requirement
Start from what customers, channels, regulators or industry economics make necessary for success in the selected group.
Illustrative example
Regulated plants require traceable diagnostic recommendations and controlled changes.
Relative performance
Describe the level or form of performance needed compared with alternatives. Not every factor must be best in class.
Illustrative example
Response within four hours may be an entry condition, while equipment-specific accuracy differentiates.
Activity implication
Translate each factor into activities and capabilities that the organisation must perform or access.
Illustrative example
Traceability requires controlled models, documented evidence and an auditable service process.
When to use it
- After product-market groups have been defined.
- When internal capability discussions are not connected to customer or market success.
A practical workflow
- 1
Select a product-market group.
- 2
Capture customer, competitive and regulatory success requirements.
- 3
Prioritise factors and record evidence and confidence.
- 4
Map the factors to the activities that enable them.
Fictional worked example
Example: remote diagnostics for regulated plants
This example is illustrative rather than a reported case. A team identifies the conditions needed to win and retain customers.
Observation:Customers need traceable and reviewable recommendations.
Implication:Model governance and expert confirmation are essential.
Observation:Sites operate continuously across regions.
Implication:Service availability and escalation design matter.
Observation:Customers have mixed legacy systems.
Implication:Interoperability becomes a key activity and capability.
From analysis to decision
How to interpret the result
- 1Limit the list to factors that truly distinguish success from failure.
- 2Use evidence from the defined market group.
- 3Connect factors to activities before making sourcing decisions.
Practical interpretation guidance from InnovationFlow. Refer to the method sources below for the underlying approach.
What a useful output looks like
Common pitfalls
- Avoid generic claims such as quality or innovation without definition.
- Separate table stakes from factors that create advantage.
References and method basis
- [1]Probert, D. (1997). Developing a Make or Buy Strategy for Manufacturing Business. Institution of Electrical Engineers. Source ↗Original method source
- [2]Canez, L.E., Platts, K.W. and Probert, D.R. (2000). Developing a framework for make-or-buy decisions. International Journal of Operations & Production Management, 20(11), 1313-1330. Source ↗Peer-reviewed research
This guide synthesises the named sources into practical questions for strategy and innovation work. It does not claim that using a tool by itself produces a successful decision.