What is strategic analysis?

Strategic analysis (sometimes referred to as a strategic market analysis) is the process of gathering data
that helps a company’s leaders decide on priorities and goals, shaping (or shifting) a long-term strategy
for the business. It gives a company the ability to understand its environment and formulate a strategic
plan accordingly. Strategic analysis is paramount in any organization because it provides the context and
backbone upon which the strategy and overall position of the business is formulated.

Unlike strategic planning and strategy execution, strategic analysis can be a fuzzy term. Sometimes it’s
confused with the tracking and analysis of operational data points—an important business activity, but
not one that is usually associated with strategy. Strategic analysis is a crucial part of long-term business
planning and the first step in the planning process.

We've got marketing solutions to support you and your team to conduct and implement strategic
analysis to optimize your marketing strategy. Our marketing tools and templates help marketers and
managers to identify opportunities, react to challenges, and prioritize marketing activities to increase
their ROI.

Strategic analysis process

There are five parts to any strategic analysis process:

Step 1: Know your goals

You need to clarify your vision before you do anything. This process consists of defining the long term
and short-term objectives. Your goals should be detailed, realistic and should match the value of your
company.

Step 2: Collect and analyze the information

At this stage, gather as much data and information as you can. However, you need to collect the
appropriate data that relates to the needs of your business.

Step 3: Construct a strategy

Strategy constructing, again, is a stepwise procedure.

Review the information gained after completing the analysis.

Determine the resources that business currently has, which can help you achieve their goals.

Identify the areas where the business should take help from external resources.

If the overall strategy does not work, then you need to have a backup plan.

Once all these factors are sorted out, you can proceed to the next step.
Step 4: Implement your strategy

After you have a structured approach, you need to implement it within the company. This is the action
stage of strategic analysis. After implementation, if the overall strategy doesn't work out, you need to
implement an entirely new approach.

Everyone working in the organization must be made clear of their roles and responsibilities in order to
give the strategy the best chance of success.

Step 5: Evaluate and control

This step includes performance measurements, consistent views of internal and external issues, and
taking corrective measures accordingly. This evaluation consists of external as well as internal strategic
planning.

Types Of Strategic Analysis

There is no standard strategic analysis “format”; rather, there are a number of methodologies available
to help guide you through the process of collecting and analyzing relevant data for strategy planning.
Two of the most commonly used methods are SWOT and PESTLE.

1. Internal strategic analysis

As the name suggests, internal analysis is conducted when an organization needs to look inside itself and
define its positive and negative performances, which can be further improved with proper resource
investments. Doing so will enhance the company’s image in the market.

The internal analysis focuses mainly on the organization’s performance by evaluating the potential
organization to reach its goals.

The most famous and commonly used internal strategic analysis technique is the SWOT analysis. SWOT
stands for strengths, weaknesses, opportunities, and threats. This technique checks the full factors inside
an organization or its projects and determines how things may suffer.

SWOT analysis:

Strengths – strengths of an organization are the positive areas that help it to grow consistently. These
areas in an organization need to be protected and carried forward through all the changes.

Weaknesses – where there are strengths, there are also weaknesses. These are the areas of an
organization that need to be fixed so that they can benefit the company while giving it a competitive
edge over its competitors.

Threats – there are various factors that affect an organization, but they are mostly predictable too. With
a proper risk management strategy, threats like competitors’ better performance do not affect the
organization’s performance.

Opportunities – discover the opportunities an organization has to grow towards its success. Identify
external opportunities and make sure you use them to the fullest.
2. External strategic analysis

Once the internal analysis is completed and the organization is foolproof from the inside, it is time to
evaluate the external factors that might interrupt the organization’s growth.

External analysis to be accurate, one needs to know how the market works and how customers are
affected by certain marketing strategies, products, and services that the competitors present out there.

PESTLE analysis:

PESTLE analysis is the commonly used external analysis technique. It stands for political, economic,
social, legal, and environmental analysis, which determines the factors that affect the environment
based on external strategic analysis.

It is a model that helps you to:

Point out these factors that an organization cannot control, like political changes or environmental
changes.

Determine how each issue can impact the organization’s growth.

Identify the issues to the organization.

Measure the probability of that issue happening.

Now that we have described the two types of analysis you can conduct, let’s examine the advantages
and disadvantages of conducting analysis.
What are the advantages of strategic analysis?

Strategy planning is an iterative process. It does not end when you implement the plans you have
devised. Once you analyze and scrutinize what’s influencing the organization and formulate strategies.
You will need to implement them and go back to evaluating and planning.

The process is ongoing, however, it contributes to the growth of the business and the health of the
organization.

We have listed some of the benefits of analysis:

 It helps you to determine the internal positive areas in an organization that actively helps set it
to grow.
 It also indicates that these positive areas should be protected and run consistently for the
organization to be leading on the right part to success.
 Strategic analysis drives out internal and external strengths and weaknesses that affect the
organization’s growth.
 It helps you identify the organization’s internal aspects that add to its business advancements
and use them as competitive advantages over your competitors.

What are the disadvantages of strategic analysis?

As we have established that analysis is an ongoing process, it can be considered a benefit and a
disadvantage. We have found two cons of strategic market analysis that you should learn about.

 It helps you get too many creative ideas but does not tell you exactly which one to choose.
 It can sometimes be very time-consuming, affecting other efficient innovations like developing a
new product or service at an organizational level.
Strategic Analysis Examples

Some organizations struggle to differentiate strategic analysis from other types of analysis; that means
they’re also usually confused about what software tools should be used for the job. As co-founder of the
strategy software company ClearPoint, I often find myself having conversations with prospective
customers to clarify their activities (are they doing strategic planning or not?) and discuss whether
ClearPoint can help.

CONCLUSION

Given the pace of change in the business world, I strongly believe you need strategy at the center of your
management process to ensure you're achieving your goals.

T‍ hat’s not to say you should ignore operational or customer data—data that aids internal analysis in
strategic management meetings is critical to your success, but it won’t determine how your business
should be run. Strategy management and analysis should be the big gear that drives all the smaller gears
doing operations, data analytics, and more. You likely need different tools to manage all your data, but
platforms like ClearPoint can connect all the pieces to tell the entire story and help you drive your
organization with strategy, not data points.