Exploring Strategic Analysis: Key Tools and Techniques Explained

What is Strategic analysis?

Strategic analysis is the process of conducting research on the business environment within which an organisation operates and on the organisation itself, in order to formulate strategy. An objective analysis and understanding of your markets and your costs and capabilities forms the bedrock for the strategy development process from this analysis and by applying creativity will comes a number of options and opportunities that can be used to build and implement a solid strategic plan for new or existing markets.

Setting a strategy requires knowledge in three areas:

What is Strategic analysis?

1. Customers: Existing customers and potential customers and markets.
• What do they do?
• What would help them do what they do better?
• What are their needs?
• Where are the most profitable customers?
2. Competencies: Skills, knowledge and relationships.
• What do you do well?
• What abilities could you draw on?
• What costs do you have to carry?
• Where do you make money?
3. Competition: The whole competitive environment from regulation to real life competition.
• What is the basis of competition?
• Where are the threats?
• Where is their pressure and where is the market easy?
• Analysis of the three areas is interrelated.
• Who you choose as your target audience will have implications for what capabilities you need, which will have an impact on what competitive pressures are around which will influence who you choose as your target audience.

1. Strategy Analysis - This is all about the analyzing the strength of businesses' position and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools, including:
• PEST Analysis - a technique for understanding the "environment" in which a business operates
• Scenario Planning - a technique that builds various plausible views of possible futures for a business
• Five Forces Analysis - a technique for identifying the forces which affect the level of competition in an industry
• Market Segmentation - a technique which seeks to identify similarities and differences between groups of customers or users.
• Directional Policy Matrix - a technique which summarizes the competitive strength of a business’s operations in specific markets.
• Competitor Analysis - a wide range of techniques and analysis that seeks to summarize a businesses' overall competitive position.
• Critical Success Factor Analysis - a technique to identify those areas in which a business must outperform the competition in order to succeed.
• SWOT Analysis - a useful summary technique for summarizing the key issues arising from an assessment of a business’s "internal" position and "external" environmental influences.
2. Strategic Choice - This process involves understanding the nature of stakeholder expectations (the "ground rules"), identifying strategic options, and then evaluating and selecting strategic options.
3. Strategy Implementation - Often the hardest part. When a strategy has been analyzed and selected, the task is then to translate it into organizational action. Seven essential strategy analysis tools:
• SWOT - The SWOT is the most basic form of strategic analysis. Simply list the organization’s Strengths, Weaknesses, Opportunities and Threats.
• McKinsey 7s - The McKinsey 7s is useful for ensuring that you consider all aspects of the organization when identifying its strengths and weaknesses. The 7s stands for: Structure, Systems, Style, Staff, Skills, Strategy and Shared Values.
• PEST - The PEST framework is useful for ensuring that you consider a broad range of possible sources of opportunities and threats. The letters represent the Political, Economic, Social (or Socioeconomic) and technological opportunities and threats in the firm's environment. 
• Porter's 5 Forces - Porter's 5 Forces model is another framework for identifying threats and opportunities within the firm's environment. It considers the bargaining position of suppliers and customers (including distributors), the threat of new entrants and substitutes, as well as competitive factors within the industry itself.
• BCG Matrix - The BCG Matrix can be applied to any business with more than one product or service line, or more than one customer segment. In simple terms, it involves plotting the market share against the market growth rate for each product, service or customer segment, and then basing strategic decisions on their relative position on the chart.
• Pareto Analysis - A Pareto Analysis is based on the maxim that 20 percent of the products, services, customers or distributions deliver 80% of the profits. A Pareto chart is a useful visualization for showing this. Accuracy however depends on the reliability of your cost allocation system.
• The Voice of the Customer (VOC) - No matter how good your other data is, at some point you have to engage directly with your customers (and other stakeholders). You can use traditional structured methods, such as focus groups, more modern methods, such as social media, or even simply just go and chat to people.

The Tools and Techniques of Strategy Analysis

Senior managers need to make good strategic decisions, but many lack the in-depth knowledge and understanding of the most useful tools and techniques of strategy analysis. They may have come across concepts such as industry analysis and competitive advantage, but are unsure of the ways in which these concepts can be used to enhance strategic decision making.

During this intensive, two-day workshop we provide in-depth professional training in the most useful tools and techniques, giving attendees a practical, rigorous foundation in strategy analysis that may be applied to enhance strategic thinking and decision-making in a variety of situations.