STRATEGIC BUSINESS

ANALYSIS

ELDRELENE JOY D. ZABAT - TUBIL

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?
What is strategic analysis in strategic management?

Strategic analysis
is a process that involves researching an organization's business environment
within which it operates.

is essential to formulate strategic planning for decision making and smooth

working of that organization.

Strategic planning
a process in which an organization's leaders define their vision for the future
and identify their organization's goals and objectives.
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=IwAR0TTv4CnVv03O5ZiP6lQcX7umnrcM55dn
Jg4CuLFswTEvwjtUxpphgM
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.
Strategic Analysis
The definition of strategic analysis may differ from an academic or
business perspective, but the process involves several common factors:

1. Identifying and evaluating data relevant to the company’s strategy

2. Defining the internal and external environments to be analyzed

3. Using several analytic methods such as Porter’s five forces analysis, SWOT

analysis, PESTEL and VALUE CHAIN analysis

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 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
Vision, Mission, and Values

After gaining a deep understanding of the company’s vision, mission, and values, strategists
can help the business undergo a strategic analysis.

The purpose of a strategic analysis is to analyze an organization’s internal environment,

assess current strategies, and generate and evaluate the most successful strategic
alternatives.

Followed by an external environment assessment

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.
 Comprehensive strategic management model

Externa
l
Audit

Implem
Generat Implem ent Measur
Long-Te
e, ent Strategi e&
rm
Vision Evaluat Strategi es: Evaluat
Objecti
& e, es: Marketi e
ves
Mission Select Mgmt ng, Perform
Strategi Issues Fin/Acc ance
es t,
R&D,
CIS

Interna
l
Audit
 Identifying the organization's mission, objectives, and strategies.

Analyzing the external environment.

What are the steps of

Analyzing the internal environment.
the strategic
management process?
Formulating strategies.

Implementing strategies.

Evaluating results and recommendation.

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%20b
ottom%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
 What are the characteristics of
STRATEGIC MANAGEMENT?

TOP MANAGEMENT REQUIREMENT OF AFFECT THE FIRM'S FUTURE-ORIE MULTI-FUNCTIONAL NON-SELF-GE

INVOLVEMENT. LARGE AMOUNTS LONG-TERM NTED. OR MULTI-BUSINESS NERATIVE
OF RESOURCES. PROSPERITY. CONSEQUENCES. DECISIONS.
Key Terms

Strategists – Firm’s success/failure

Various Job Titles:

•Chief Executive Officer (CEO)

•Chief Strategy Officer (CSO)
•President
•Owner
•Board Chair
•Executive Director
Adapting to Change – Key
Strategic Management
Questions
What kind of business should we
become?
Are we in the right fields
Are there new competitors?
What strategies should we pursue?
How are our customers changing?
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

• Proactive in shaping firm’s future

• Initiate and influence firm’s activities
• Formulate better strategies

• Systematic, logical, rational

 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:

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

Building Competitive
Corporate Level Strategy Advantage through Functional Company Analysis
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 Competitive Rivalry and

Business Level Strategy Corporate Level Strategy
REPORTING Competitive Dynamics

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