STRATEGIC

BUSINESS
ANALYSIS

DENNIS B. DE JESUS
INSTRUCTOR
How do you generally define STRATEGY?
How do you define STRATEGY in business?

STRATEGY =

A strategy is a plan of actions taken by managers to achieve the

company’s overall goal and other subsidiary goals. It often determines the
success of a company.
How do you generally define ANALYSIS?

“The act of studying or examining

something in detail”

What’s to be analyzed

Analysis is the process of considering something carefully or using statistical

methods in order to understand it or explain it.
– Collins Dictionary
 STRATEGIC
MANAGEMENT

• Strategic management is the wholistic and an essential component of

businesses. It therefore entails evaluating broad business goals, the
organization's vision and objectives as well as future plans.

• SBA is a just an element of STRATEGIC MANAGEMENT

• In addition, a strategic management process is employed to ensure

that the business runs effectively and efficiently.
Strategic management provides overall direction by developing plans and
policies designed to achieve objectives and then allocating resources to
implement the plans. Ultimately, strategic management is for organizations to
gain a competitive edge over their competitors.
What is strategic management examples?
Learning objectives

Understand the importance of defining the business need correctly and

pursuing a thorough analysis of the internal and external environments of the
enterprise before choosing the solution.

Shortcutting the pre-analysis work discussed in this course often results in

delivering solutions that are misaligned to the enterprise strategy and to the
expectations and needs of the business.

Learn how to avoid the pitfall of jumping to a solution prior to a solid

understanding of the opportunity or problem needing to be addressed.
Learning objectives

Effectively execute strategic business analysis reduces waste significantly by

reducing the number of doomed projects or initiatives.

Increase the effectiveness of strategic business analysis in your organization by

ensuring that everyone involved has a shared understanding of this complex
process augmented by a common set of tools and techniques that can deliver
reliable, consistent outcomes.

The major purpose of strategic business analysis is to deliver the factual

component to support business decisions.
Strategic Analysis

When to analyze?

The process of conducting research on a company and its

operating environment to formulate a strategy

Strategic business analysis requires a focus on all aspects of the organization.

It leverages business analysis, changes in leadership, operations, performances and

program and project management. Strategic business analysis focuses on ‘what and
why’, not the ‘how’ of solution implementation.

https://corporatefinanceinstitute.com/resources/knowledge/strategy/strategic-
analysis/?fbclid=IwAR0TTv4CnVv03O5ZiP6lQcX7umnrcM55dntNFJg4CuLFswTEvwjtUxpphgM
Change is necessary for organizations to continue to thrive and grow, but
how do you pivot strategy and retool an organization to remain relevant?

Strategic business analysis involves outcome focused thinking, simultaneously

understanding business context, business challenges, and the complexities of the
internal and external environment to frame the scope of the transformation,
articulate the business need/outcome, and shape the agenda for transformation.
What is a Strategic Business Analyst?
Strategy analysts identify a business' needs and develop plans that determine the
direction a company can take to actualize its goals. They gather, review, and test
data and apply many measures to provide solutions to critical business issues
and decisions.

They will develop these decisions by analyzing, gathering and reviewing data
then creating relevant solutions to the companies' problems.

Strategists==Firm’s
Strategists Firm’ssuccess/failure
success/failure
Why strategic business analysis is important?

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.
Vision, Mission, and Values

To start developing a business strategy, a company needs a very well-defined

understanding of what it is and what it represents. Strategists need to look at the
following:

• Vision – What it wants to achieve in the future (5-10 years)

• Mission Statement – What business a company is in and how it rallies people
• Values – The fundamental beliefs of an organization reflecting its commitments
and ethics
Vision, Mission, and Values example
Strategic Analysis Process
VISION and MISSION

The following infographic

demonstrates the strategic
analysis process:
1. Perform an environmental analysis of current strategies

Starting from the beginning, a company needs

to complete an environmental analysis of its
current strategies.

Internal environment considerations include issues

such as operational inefficiencies, employee morale,
and constraints from financial issues.

External environment considerations include

political trends, economic shifts, and changes in
consumer tastes.
2. Determine the effectiveness of existing strategies

A key purpose of a strategic analysis is to

determine the effectiveness of the current
strategy amid the prevailing business environment.

Strategists must ask themselves questions such as:

Is our strategy failing or succeeding? Will we
meet our stated goals? Does our strategy align
with our vision, mission, and values?
3. Formulate plans

If the answer to the questions posed in the

assessment stage is “No” or “Unsure,” we
undergo a planning stage where the company
proposes strategic alternatives.

Strategists may propose ways to keep costs low and

operations leaner. Potential strategic alternatives
include changes in capital structure, changes in
supply chain management, or any other alternative to
a business process.
4. Recommend and implement the most viable strategy

Lastly, after assessing strategies and proposing

alternatives, we reach a recommendation. After
assessing all possible strategic alternatives, we
choose to implement the most viable and
quantitatively profitable strategy.

After producing a recommendation, we iteratively

repeat the entire process. Strategies must be
implemented, assessed, and re-assessed. They
must change because business environments are
not static.
Levels of Strategy
Strategic plans involve three levels in terms of scope:

The three levels are corporate level strategy, business level strategy, and
functional strategy.

These different levels of strategy enable business leaders to set business

goals from the highest corporate level to the bottom functional level.

https://www.businessbecause.com/news/insights/8073/three-levels-of-
strategy#:~:text=The%20three%20levels%20are%20corporate,to%20the%20bottom%20functional%20level.
Levels of Strategy
Strategic plans involve three levels in terms of scope:

1. Corporate-level

The corporate level is the highest point in an organization, so the decisions made here
will ultimately inform the business’ main goal, as well as the goals of the levels further down
the organization.

Corporate level strategy ensures that all business units are working towards a main
overarching goal. The corporate level is also responsible for directing different business
strategies across multiple business units.

TOP MANAGEMENT

https://www.iedunote.com/levels-of-strategy
Levels of Strategy

2. Business-level

Business level strategy is concerned with designing ways for a business to

gain a competitive advantage in a specific market.

Business strategy is how a firm creates value for a defined activity on its
market. It shows the way a firm competes, positions, and masters its rivalry
interactions and industrial structure. For this purpose, the firm has to configure
its value chain and [manage] its resources and capabilities to create a
sustainable competitive advantage

Ex: Apple
MID-LEVEL MANAGEMENT
Levels of Strategy
3. Functional-level

A strategy that emphasizes a particular functional area of an organization. It is

formulated to achieve some objectives of a business unit by maximizing resource
productivity.

Sometimes functional strategy is called departmental strategy since each business-

function is usually vested with a department.

Functional strategy examples include a company’s marketing strategy, financial

strategy, production strategy, or R&D strategy. Each of these separate strategies
will require different tactical decisions to meet the wider corporate level strategy.

LOW-LEVEL MANAGEMENT
Key Terms
Opportunities & Threats

Environmental Scanning (Industry Analysis)

• Process of conducting research and

gathering and assimilating external
information
Key Terms Opportunities & Threats (External)
Key Terms
Opportunities & Threats

Basic Tenet of Strategic

Management
Take advantage of
External Opportunities

Strategy Formulation

Avoid/minimize impact of
External Threats
 Strengths & Weaknesses (Internal)

Key Terms
Key Terms

Strengths & Weaknesses (Internal)

Typically located in functional areas of the firm

• Management
• Marketing
• Finance/Accounting
• Production/Operations
• Research & Development
• Computer Information Systems
 Benefits of Strategic Management

Financial Benefits

• Improvement in sales
• Improvement in profitability
• Productivity improvement
 Benefits of Strategic Management

Non-Financial Benefits

• Improved understanding of competitors strategies

• Enhanced awareness of threats
• Reduced resistance to change
• Enhanced problem-prevention capabilities
Benefits of Strategic Management-Gordon E. Greenley

• Identification of Opportunities
• Objective view of management problems
• Improved coordination & control
• Minimizes adverse conditions & changes
• Decisions that better support objectives
• Effective allocation of time & resources
• Internal communication among personnel
• Integration of individual behaviors
• Clarify individual responsibilities
• Encourage forward thinking
• Encourages favorable attitude toward change
• Provides discipline and formality to the management of the business
Do all businesses conduct strategic
mgmt.?
Poor reward structures

Fire-fighting
Why Some
Waste of time
Firms Do No
Strategic Too expensive
Planning
Laziness

Content with success

 Fear of failure

Overconfidence
Why Some
Prior bad experience
Firms Do
Strategic Self-interest

Planning Fear of the unknown

Suspicion
 Methods of Instruction

A. Interactive Discussion

B. Reporting

C. Case studies
Evaluation and Assessment

Course Grade Assessment:

A. Exams (3)

B. Projects/Reports

C. Quizzes

D. Recitations

E. Attendance
 The External Environment:
Introduction to Strategic Business Analysis and Opportunities, Threats,
Management Strategic Competitiveness Industry Competitors and
Competitor Analysis

TOPICS FOR The Internal Organization:

Resources, Capabilities and Business Level Strategy
Competitive Rivalry and
Competitive Dynamics
REPORTING Core Competencies

Building Competitive
Corporate Level Strategy Advantage through Company Analysis
Functional Level Strategies

Business Analysis and
Strategic Competitiveness
The External Environment:
The Internal Organization:
Opportunities, Threats,
Resources, Capabilities and
Industry Competitors and
Core Competencies
Competitor Analysis

TOPICS FOR Business Level Strategy

Competitive Rivalry and
Corporate Level Strategy
Competitive Dynamics
REPORTING

Building Competitive
Advantage through Company Analysis
Functional Level Strategies
Reporting, discussions
and more quizzes next
week