In most cases strategic analysis tools aims to help a company or a team to:
- - Identify and/or evaluate the relevant data that is needed to formulate the strategy;
- - Define the external and internal environmental factors that are influencing the company activities;
- - To take sounder decisions based on the analysis.
Here are two possible definitions of Strategic Analysis:
'...the process of conducting research on the business environment within which an organisation operates and on the organisation itself, in order to formulate strategy.’
‘Strategic analysis considers how an organisation attempts to best combine its own capabilities with the opportunities in the marketplace in seeking to accomplish its overall objectives.’
The most well known examples of analytical methods used in strategic analysis are:
- - SWOT analysis
- - PEST analysis
- - Porter’s five forces analysis
- - Four corner’s analysis
- - Value chain analysis
- - Early warning scans
- - War gaming
- - The Blue Ocean Strategy
PERFORMING STRATEGIC ANALYSIS EFFICIENTLY
Strategic analyses must be performed with rigour because they lead to decisions that have deep impacts on the path taken by a project or a company. The analytical methods and tools have a crucial part to play in this because they provide a way to gather and organize data, to analyse the business environment, and to help take decisions.
In order to use these strategic methods efficiently, there are generally several key recommendations to follow:
Formulate a clear question
The analytical tools should help to answer the question, or a part of the question, that the organisation formulated. Those who participate in the analysis should clearly understand the benefits and limitations of the tool used, and should define what part of the question is answered by each tool.
Collaborate with key stakeholders
The quality of the analysis depends directly on the input and collaboration of the participants. It is often recommended to involve a wide variety of people, with different functions and from different backgrounds. Moreover, stakeholders holding key knowledge on the company or the field of expertise should be given the opportunity to participate in the analysis.
Take time
People should receive advanced notice of the analysis in order to have time to organize their thoughts and data, and the enough time should be given to the analysis itself so that all stakeholders have the chance to participate. Proper use of analytical tools may be time consuming, but it is important to have the input of all the key people.
Be cautious of preconceptions and pressure
All analytical tools rely on historical and environmental data to formulate future scenarios. It is important to exercise caution with data, otherwise preconceptions or pressures within the organisation might have a negative impact on the analysis.
