Definition
Strategic Management Analysis is a process of evaluating an organization’s internal and external environment to identify opportunities and threats and to develop a strategy for achieving its goals
Field
Strategic Management Analysis is a valuable tool for any business field that wants to remain competitive and achieve its goals. However, it is particularly important for businesses operating in complex and dynamic environments, where the competitive landscape is constantly changing.
Purpose
The purpose of Strategic Management Analysis is to help organizations remain competitive and adapt to changing market conditions.
PIC
Senior Executives and Managers, such as the Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Financial Officer (CFO), and General Managers. These individuals are responsible for setting the organization’s strategic direction, allocating resources, and ensuring that the organization remains competitive and achieves its goals.
The analyzing process & methodologies
Environmental analysis is a critical first step in Strategic Management Analysis. It involves evaluating the external environment to identify opportunities and threats that the organization faces. This includes analyzing the industry structure, competitive dynamics, and macroeconomic factors that may impact the organization.
To conduct an environmental analysis, organizations can use a variety of tools and techniques, such as PESTEL analysis, Porter’s Five Forces, and SWOT analysis. PESTEL analysis evaluates the political, economic, social, technological, environmental, and legal factors that may impact the organization. Porter’s Five Forces evaluates the competitive forces within an industry, including the bargaining power of suppliers, buyers, and competitors. SWOT analysis evaluates the strengths, weaknesses, opportunities, and threats that the organization faces.
Internal analysis is a critical second step in Strategic Management Analysis. It involves evaluating the organization’s internal environment to identify its strengths and weaknesses. This includes analyzing the organization’s resources, capabilities, and core competencies.
To conduct an internal analysis, organizations can use a variety of tools and techniques, such as resource-based view and value chain analysis. Resource-based view evaluates the organization’s resources and capabilities to identify its competitive advantage. Value chain analysis evaluates the organization’s primary and support activities to identify opportunities for cost reduction and differentiation.
SWOT analysis is a critical third step in Strategic Management Analysis. It involves synthesizing the results of the environmental and internal analyses to identify the organization’s strengths, weaknesses, opportunities, and threats. SWOT analysis provides a comprehensive overview of the organization’s position in the market and helps to identify areas for improvement.
Strategy formulation is a critical fourth step in Strategic Management Analysis. It involves developing a strategy for achieving the organization’s goals. This includes identifying the key strategic objectives, selecting the appropriate business model, and developing the tactics to execute the strategy.
To develop a strategy, organizations can use a variety of tools and techniques, such as mission statement, vision statement, and strategic objectives. Mission statement defines the organization’s purpose and values. Vision statement defines the organization’s future aspirations. Strategic objectives define the organization’s goals and how they will be achieved.
Strategy implementation is a critical fifth step in Strategic Management Analysis. It involves executing the strategy by developing an action plan, allocating resources, and monitoring progress. This step is critical to ensure that the strategy is executed effectively and efficiently.
To implement a strategy, organizations can use a variety of tools and techniques, such as action plans, resource allocation, and monitoring and control. Action plans define the specific actions that need to be taken to achieve the strategic objectives. Resource allocation identifies the resources that are required to execute the strategy. Monitoring and control ensure that the strategy is executed effectively and efficiently.
Evaluation and control is a critical final step in Strategic Management Analysis. It involves evaluating the results of the strategy and making necessary adjustments to ensure that the organization is on track to achieve its goals. This step is critical to ensure that the organization remains competitive and adapts to changing market conditions.
To evaluate and control a strategy, organizations can use a variety of tools and techniques, such as performance metrics, feedback mechanisms, and continuous improvement. Performance metrics evaluate the results of the strategy against the strategic objectives. Feedback mechanisms provide feedback on the effectiveness of the strategy. Continuous improvement ensures that the organization remains competitive and adapts to changing market conditions.
Tools used
Techniques
Limitation & Challenges
While Strategic Management Analysis can be a valuable tool for organizations seeking to remain competitive and achieve their goals, there are several limitations and challenges that need to be taken into account:
Incomplete or inaccurate data: Strategic Management Analysis relies on accurate and comprehensive data to provide a clear picture of an organization’s environment and competitive position. However, data may not always be available, or it may be incomplete or inaccurate, which can lead to flawed analysis and decision-making.
Uncertainty and unpredictability: The external environment in which organizations operate is often complex, dynamic, and unpredictable. This can make it difficult to predict future trends or events, and can limit the effectiveness of Strategic Management Analysis in developing a strategy.
Resistance to change: Implementing a new strategy often requires significant changes to an organization’s structure, processes, and culture. This can be met with resistance from employees, stakeholders, and customers, which can limit the effectiveness of the strategy.
Resource constraints: Developing and implementing a new strategy often requires significant resources, including time, money, and personnel. Organizations with limited resources may face challenges in implementing a new strategy effectively.
Overreliance on analysis: While Strategic Management Analysis can provide valuable insights into an organization’s environment and competitive position, it is important not to rely too heavily on analysis at the expense of action. Organizations must be willing to take risks and make decisions based on incomplete or imperfect information.
Lack of alignment: Developing a successful strategy requires alignment between different departments, functions, and levels of the organization. However, achieving this alignment can be challenging, particularly in large, complex organizations with multiple stakeholders and competing priorities.
Overall, while Strategic Management Analysis can provide valuable insights and support the development of a successful strategy, organizations must be aware of these limitations and challenges and take steps to address them in order to maximize the effectiveness of their analysis and decision-making.
Examples & Case Study (Link)
Discuss any limitations or challenges associated with each type of analysis methodology. What are some potential pitfalls to be aware of? What are some common mistakes that people make when conducting