Introduction to Strategic Business Analysis

I. What is Strategy? Levels of Strategy:

Strategic plants involve three levels in terms of
 A strategy is a plan of actions taken by scope:
managers to achieve the company’s
overall goal and other subsidiary goals. It 1. Corporate-level (Portfolio)
often determines the success of a  At the highest level, corporate strategy
company. involves high-level strategic decisions that
will help company sustain a competitive
 Peter Drucker – a strategy is a pattern of advantage and remain profitable in the
activities that seek to achieve the foreseeable future.
objectives of the organization and adapt its  Corporate-level decisions are all-
scope, resources and operations to encompassing of a company.
environmental changes in the long term.
2. Business-level
 Johnson, Scholes and Whittington – as  At the medial level of strategy
“the direction and scope of an organization  The business-level strategy focuses on
over the long term, which achieves market position to help the company gain
advantage in a changing environment a competitive advantage in its own
through its configuration of resources and industry or other industries.
competencies with the aim of fulfilling
stakeholder expectations.” 3. Functional-level
 At the lowest level
Vision, Mission, and Values  They focus on activities within and
between different functions, aimed at
 To develop a business a business improving the efficiency of the overall
strategy, a company needs a very well- business.
defined understanding of what it is and  Focused on particular functions and
what it represents. Strategists need to look groups.
at the following:
o Vision – What it wants to achieve in II. What is Business Analysis?
the future (5-10 years)
 Business Analysis is a research
o Mission Statement – what business a discipline that can help us identify
company is in and how it rallies people problems and create practical solutions to
address them.
o Values – The fundamental beliefs of
an organization reflecting its  A business analyst may create effective
commitments and ethics and efficient solutions for the organization.
However, generating leads to counter the
 After gaining a deep understanding of the issues is complex, but it can be done by
company’s vision, mission, and values, the business analyst alone. After all,
strategists can help the business undergo business analysis is a team effort.
a strategic analysis.
 Using Effective solutions can further
 The purpose of a strategic analysis is to improve and develop a business. Practical
analyze an organization’s external and solutions for business-related issues are
internal environment, assess current the key to keeping any business increase
strategies, and generate and evaluate the sales.
most successful strategic alternatives.
 The process of business analysis includes
techniques, methods, software, strategic
planning, policy development,
organization structure change, and other
improvements to the business or project.
 Primary function – to identify the best o Managing risks
solution that works best for a specific o Complying with relevant laws and
problem. regulations
o Implementing changes etc.
 Gives insights on how to develop a
particular project. Applying or  SBA requires a focus on all aspects of the
incorporating them will provide us with an organization. It leverages business
advantage over competitors. Any business analysis, change leadership, and program
that wants to remain competitive in the project management. SBA focuses on
market can use business analysis as an ‘what and why’ not the ‘how’ of solution
effective tool. implementation.

III. What is Strategic Business Analysis? Types of Strategic Business Analysis

 Strategic Business Analysis in modern 1. Internal strategic analysis

day is hard to separate from strategic
management and planning where  Conducted when an organization needs to
management must battle with the ever- look inside itself and define its positive and
changing business environment. SBA negative performances, which can be
describes the role of strategy in business. further improved with proper resource
investments. Doing so will enhance the
 When it comes to business planning, company’s image in the market
strategic analysis plays a crucial role to
guide decision-making. Your organization  Focuses mainly on the organization’s
operates in both internal and external performance by evaluating the potential
environment and is influenced by both organization to reach its goals.
these environments.
 The most famous and commonly used
1. Refers to an evaluation of an organization’s internal strategic analysis technique is the
work environment. SWOT analysis. This technique checks
the full factors inside an organization of its
 This work environment generally defines projects and determines how things may
how the organization operates its suffer.
business. It helps to determine the mood o Strengths – positive areas that help to
functioning of the organization and grow consistently. These areas in an
whether the goals and objectives set by organization need to be protected and
the organization can be met. carried forward through all the
changes.
 Many experts advise conducting it in an
organization from time to time. It can help o Weaknesses – These are the areas of
undercover the areas that need changes an organization that need to be fixed
and enhancements. so that they can benefit the company
while giving it a competitive edge over
2. Those actions and decisions made by its competitors.
management while trying to understand the
impact of strategic events. o Threats – there are various factors
that affect an organization, but they
 Example: are mostly predictable too. With a
o Introduction or development of new proper risk management strategy,
product line threats like competitors’ better
o Setting up a factory in a new location performance do not affect the
o Employing key staff organizations’ performance.
o Selecting organization structure
o Investing in new technology
 o Opportunities – discover the Advantages of Strategic Business
opportunities an organization has to Analysis:
grow towards its success. Identify
external opportunities and make sure  Helps to determine the internal
you use them to the fullest. positive areas in an organization that
actively helps set it to grow.
2. External strategic analysis
 Indicates that these positives areas
 Once the internal analysis is completed should be protected and run
and the organization is foolproof from the consistently for the organization to be
inside, it is time to evaluate the external leading on the right part to success.
factors that might interrupt the
organization’s growth.  Strategic analysis drives out internal
and external strengths and
 One needs to know how the market works weaknesses that affect the
and how customers are affected by certain organization’s growth.
marketing strategies, products, and  Helps to identify the organization’s
services that the competitors present out internal aspects that add to its
there. business advancements and use
them as competitive advantages over
 PESTLE analysis – the most commonly your competitors.
used external analysis technique. It stands
for political, economic, social, legal, and
Disadvantages of Strategic Business
environmental analysis, which determines
the factors that affect the environment Analysis:
based on strategic analysis.
o Point out these factors that an  Helps to get too many creative ideas
organization cannot control, like but does not tell you exactly which one
political changes or environmental to choose.
changes.
 Can sometimes be very time-
o Determine how each issue can impact consuming, affecting other efficient
the organization’s growth. innovations like developing a new
product or service at an organizational
o Identify the issues to the organization. level.

o Measure the probability of the issue

happening.