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 fo
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 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

Why Overconfidence

Some Prior bad experience

Firms Do Self-interest
Strategic
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 Business Level Strategy
Competitive Rivalry and

REPORTING and Core Competencies

Competitive Dynamics

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

TOPICS FOR Business Level Strategy

Competitive Rivalry and
Corporate Level Strategy
REPORTING Competitive Dynamics

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