What is commercial awareness?
Commercial awareness is sometimes also referred to as ‘business focus’, ‘client focus’, ‘business understanding’ or ‘passion for business’. Basically it is about having an interest in, and an understanding of, the business world that organisations operate in.
- familiarity with the company (its customers, competitors and suppliers)
- knowing what is happening in the industry (and how this impacts the company)
- an awareness of the importance of business issues such as efficiency, cost-effectiveness and client care
- an awareness of broader economic and global issues such as the current economic climate
- an ability to see the ‘bigger picture’ and appreciate external challenges, pressures and opportunities
Why is it important to employers?
Organisations need graduates who can quickly understand the company and their customers, and be able to make good decisions on how best to develop their business. Students may have learned the theory at university, but need to be able to apply this in practice in the real world!
Recruiters will also want to know that you have a genuine interest in the commercial world and in particular they want to know that you are passionate about their business and the industry they work in.
How you do this will depend on the industry that you are applying to. If you want to get into finance then you should follow the financial news and know what is happening in the financial markets. If you want to get into healthcare or medicine then you should know about the changes taking place in the NHS. Interested in teaching? Then you must be aware of the current trends in education. Thinking about journalism, then you should know about the move to multi-format and web journalism… and so on for each industry…
How do employers look for your commercial awareness?
On an application form and at interview, the following type of questions are designed to test commercial awareness:
- What do you know about this company?
- What do you know about our competitors? What are the differences between them and us?
- Who are our clients? What are our main products/services?
- Tell me about a recent business story that took your interest?
- What are the greatest challenges facing our sector in the next five years?
- What changes have there been in our industry recently?
Business / Finance specific questions:
- How do you keep up to date with what is going on in business?
- What is the current Bank of England base rate?
- How many euros would you get today in exchange for £10?
- What is the FTSE 100? Did the FTSE go up or down yesterday?
- What was our share price this morning?
- If we were to open a new office abroad, which country would you choose and why?
At an assessment centre you could be given case studies or business scenarios, where you would be asked to analyse and make recommendations on how you would tackle particular business situations.
Employers would assess how you interpret data, consider risk and financial implications, offer creative solutions and make sensible recommendations. These exercises could be done individually or as part of a team (where they would also be looking at your team working skills).
How can I develop my commercial awareness?
The first step is to read the company’s website thoroughly. Check the ‘news’ and ‘about us’ pages, as well as the sections for clients, potential clients and staff. Review their annual report. Find out the size of the workforce, the turnover and profits of the company, its share price and key activities which interest you. Know who the organisation’s competitors are.
Keep up to date with business news. The business section of the major broadsheet newspapers should cover most of the information you need. The FT and the Economist will be essential if you are applying for a research/analysis role.
One student told me that she found it initially difficult to follow the FT. So she would read a financial news story on the BBC website first to understand the background information, and then read the version in the FT to get more in-depth details.
Don’t leave this research until you get invited to interview. You could be asked a question about current affairs from 6 months to a year ago. Try building keeping up with the news into your weekly routine (this could be a good New Year’s Resolution!). Think about how what you read may directly (or indirectly) effect the organisations you are applying to.
Read specialist magazines and industry related blogs and follow relevant people on Twitter to keep up-to-date with developments in the relevant sector. An internet search such as ‘marketing industry blog for graduates’ is a good place to start, as once you have found one you like, it will often recommend or link to others that are useful. You can also ask people from the industry who you might meet at events / through online networking how they would suggest you build your industry knowledge (see our other blog posts about networking for tips on this).
Don’t underestimate your own work experience. You may have done part time retail work to earn some extra money, but this can also be used to gain an insight into business. What are the good and bad points about the business? Who is its target market? Who are its main competitors? How would you improve the company’s image or profitability?