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U5 Strategic Analysis 2.0

Strategic analysis is vital for organizations to evaluate their internal and external environments, enabling informed decision-making and competitive advantage. It involves techniques like SWOT and PESTEL analysis, and contributions from strategic thinkers such as Michael Porter and Henry Mintzberg have shaped its frameworks. The role of strategic analysis extends to policy-making, aiding in problem identification, setting priorities, and assessing risks.

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Asst. Prof. Sugandha Muduli
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16 views

U5 Strategic Analysis 2.0

Strategic analysis is vital for organizations to evaluate their internal and external environments, enabling informed decision-making and competitive advantage. It involves techniques like SWOT and PESTEL analysis, and contributions from strategic thinkers such as Michael Porter and Henry Mintzberg have shaped its frameworks. The role of strategic analysis extends to policy-making, aiding in problem identification, setting priorities, and assessing risks.

Uploaded by

Asst. Prof. Sugandha Muduli
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Strategic Analysis

Unit-5
Introduction
 Strategic analysis is a critical component of strategic management
that involves evaluating an organization’s internal and external
environment to formulate, implement, and monitor strategies. It
helps businesses make informed decisions to gain a competitive
edge in a dynamic market.
Definition
 "Strategic analysis is the process of understanding the business
environment, determining competitive positioning, and identifying
key success factors for long-term success.” - Robinson
Need for Strategic Analysis & Environmental
Scanning
 Strategic analysis is essential for businesses to adapt to changing
environments and sustain long-term success.
 Environmental scanning is the process of gathering, analyzing, and
interpreting information about an organization’s external and
internal environment to anticipate opportunities and threats.
Need for Strategic Analysis & Environmental
Scanning
 1. Understanding the Competitive Landscape
 Helps businesses analyze industry competition using tools like Porter’s Five Forces
Model.
 Identifies key competitors and their strategies.
 2. Identifying Strengths and Weaknesses
 Evaluates internal resources, competencies, and capabilities.
 Helps in leveraging strengths and overcoming weaknesses.
 3. Environmental Adaptation
 Analyzes market trends, technological advancements, and economic changes.
 Ensures businesses remain agile and responsive to external factors.
 4. Decision-Making Support
 Provides insights for strategic planning and investment decisions.
 Reduces risks by making data-driven choices.
 5. Performance Improvement
 Assists in setting realistic goals and performance benchmarks.
 Enhances operational efficiency and resource allocation
 Types of Environment in Strategic Analysis:
 Internal Environment:
 Includes organizational resources, culture, structure, and financial capabilities.
 Evaluated using SWOT Analysis etc.
 External Environment:
 Comprises macro-environment (PESTEL factors) and micro-environment
(industry-specific factors).

 Key Techniques of Environmental Scanning:


 PESTEL Analysis (Political, Economic, Social, Technological, Environmental,
and Legal factors)
 SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats)
 Porter’s Five Forces Model (Industry analysis tool)
 Benchmarking (Comparing with industry leaders)
 Scenario Planning (Forecasting future trends and challenges)
Strategic thinkers & their contributions
1. Michael Porter (1947 - Present)
 Key Contributions: Michael Porter is one of the most influential figures in strategic
management. His work focuses on competitive advantage, industry analysis, and business
strategy.
 Major Theories & Frameworks:
a. Porter’s Five Forces Model (1979)
b. Generic Strategies (1985)
 Porter proposed three fundamental strategies for competitive advantage:
 Cost Leadership – Competing on price by reducing costs (e.g., Walmart).

 Differentiation – Offering unique products/services (e.g., Apple).

 Focus Strategy – Targeting a specific niche market.

c. Value Chain Analysis


 Helps organizations identify activities that add value to their products or services.
 Divides activities into primary activities (e.g., production, marketing) and support
activities (e.g., HR, R&D).
 Key Books:
a. Competitive Strategy (1980)
b. Competitive Advantage (1985)
2. Henry Mintzberg (1939 - Present)
 Key Contributions: Mintzberg challenged traditional views of strategic planning
and emphasized how strategy actually develops in organizations.
 Major Theories & Frameworks:
a. Five Ps of Strategy
 Strategy can be understood from five perspectives:
 Plan – A planned course of action.

 Ploy – A tactic to outmaneuver competitors.

 Pattern – A consistent behavior over time.

 Position – A company’s place in the market.

 Perspective – The organization’s mindset and culture.

b. Deliberate vs. Emergent Strategy


 Deliberate Strategy – Planned and executed systematically.
 Emergent Strategy – Develops organically in response to market changes.
 Emphasized that strategy often evolves rather than being strictly planned.

 Key Books:
 The Rise and Fall of Strategic Planning (1994)
 Strategy Safari (1998)
3. Igor Ansoff (1918 - 2002)
 Key Contributions: Ansoff is known as the "father of strategic
management" and introduced systematic corporate strategy formulation.
 Major Theories & Frameworks:
a. Ansoff Matrix (1957)
 A framework for business growth strategies:
 Market Penetration – Increase sales in existing markets.
 Market Development – Expand into new markets.
 Product Development – Introduce new products in existing markets.
 Diversification – Enter entirely new markets with new products.
b. Strategic Management Model
 Focused on aligning corporate strategy with external and internal
environments.
 Key Books:
 Corporate Strategy (1965)
4. Peter Drucker (1909 - 2005)
 Key Contributions: Drucker was a pioneer in management thinking and
emphasized strategic decision-making, innovation, and knowledge
management.
 Major Theories & Frameworks:
a. Management by Objectives (MBO)
 A process where managers and employees set clear objectives aligned
with the company’s goals.
 Improves performance by focusing on measurable results.
b. Knowledge Worker Concept
 Introduced the idea that knowledge and intellectual capital would
become the primary drivers of business success.
c. Innovation & Strategy
 Drucker emphasized that innovation should be a key part of strategy
for long-term success.
 Key Books:
 The Practice of Management (1954)
 Management: Tasks, Responsibilities, Practices (1973)
 Each strategic thinker contributed unique insights to strategic
management:
 Porter focused on industry competition.
 Mintzberg emphasized emergent strategy.
 Ansoff developed corporate growth strategies.
 Drucker highlighted innovation and knowledge management.
 Prahalad & Hamel introduced core competencies.

Understanding these theories helps businesses craft effective


strategies for long-term success.
Role of Strategic Analysis in Policy making
1. Problem Identification and Definition:
 Clarifies key issues using tools like SWOT analysis.
 Example: Identifying economic slowdown causes through PESTEL
analysis.
2. Setting Priorities and Objectives:
 Aligns policy goals with strategic priorities based on urgency and
impact.
 Example: Prioritizing healthcare policies for epidemic control.
3. Assessing Internal Capabilities:
 Uses VRIO framework to evaluate resources and feasibility.
 Example: Digital education policies assessing IT infrastructure.
4. Understanding External Environment:
 Analyzes macro and micro factors using PESTEL and Porter’s Five
Forces.
 Example: Trade policies based on global economic trends.
5. Formulating and Evaluating Policy Options:
 Develops multiple scenarios and conducts cost-benefit analysis.
 Example: Environmental policies with different regulatory levels.
6. Risk Assessment and Management:
 Identifies risks and prepares contingency plans.
 Example: Cybersecurity strategies for national security policies.
7. Alignment with Strategic Vision and Goals:
 Ensures policy coherence with long-term goals using the Balanced
Scorecard.
 Example: Development policies aligned with SDGs.
8. Facilitating Stakeholder Engagement:
 Analyzes stakeholder interests and builds consensus.
 Example: Urban policies involving residents and businesses.
9. Performance Monitoring and Feedback:
 Establishes KPIs for continuous policy evaluation.
 Example: Economic policies monitored through GDP and employment
rates.
THANK YOU

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