Strategic Analysis

Strategic Analysis

Introduction

This report comprises of four sections in which we will explain what strategic analysis is. Firstly, there is a brief description of what strategic analysis is? Secondly the different theories that assist in conducting a strategic analysis, thirdly the structure, as to what are the components of a strategic analysis.

Strategic Analysis

Strategic analysis of a business is the study of the environment in which the business is operating and that of the business itself to come up with a strategy. The basic definition of strategic analysis might differ but the core components remain the same which are: identify the data relevant to strategy formulation, define the external and internal environment that needs to be analyzed and the different analytical tools that can be used in the analysis.

The most basic and useful tool for strategic business planning is the strategic analysis. It looks at what is happening outside your business environment today and what is the expected tomorrow. What is happening today and how it is affecting your business and what should your response be to the likely changes. Strategy is devised at the higher level of a business setup and it involves your whole organizational approach which is broken down into small and manageable chunks (www.cimaglobal.com). The focus is on the external factors as these factors have a powerful impact on your business. Organizations need to learn and manage their approach towards these external factors rather than assuming that there is nothing they can do.

Strategic analysis gives a boost to the organizational effectiveness. It gives you a clearer picture of your goals, better and appropriate decisions and a more successful future as the organization is better prepared for what will happen tomorrow. It is also known as the external environment analysis and is a key to strategic planning. It gives your business the right direction and makes you take the right decisions as you are well aware of the external influences that might affect your business in the future. The price that a business has to pay for not doing a strategic analysis is far more than the small amount that is needed to perform this process (www.cimaglobal.com). And in business language it is called the opportunity cost, in which you risk being left behind and miss the opportunities.

Theories that assist Strategic Analysis

The leading theories in strategic analysis are related to the behavior in games. The traditional game ...