Strategic Analysis Choice Implementation
The focus of strategy analysis and decision is on coming up with and assessing potential alternatives as well as choosing which strategies to employ. The goal of strategy analysis and decision-making is to identify potential courses of action that would best help the business accomplish its goals and mission.
The current strategies, goals, and mission of the company, along with the data from external and internal audits, serve as a foundation for developing and assessing workable alternative strategies. The alternate strategies stand for small, attainable actions that would take the company from where it is now to the state it wants to be in the future.
Alternative strategies are compatible with previously successful strategies and are drawn from the firm’s vision, mission, objectives, external audit, and internal audit. The analytical methods used for business-level strategies are covered first, followed by methods suitable at the corporation level in the strategic analysis.
The techniques for business-level include SWOT analysis, experience curve analysis, grand strategy selection matrix, and grand strategy clusters. The techniques for the corporate level include BCG matrix, GE nine-cell planning grid, Hofer’s matrix, and Shell Directional Policy Matrix.
The judgmental factors constitute the other aspect on the basis of which strategic choice is made.
Strategic analysis and choice are two important components of the implementation stage of the strategic management plan. These two components are crucial links in the strategic management implementation procedure.
Strategic analysis is all about analyzing the strength of businesses’ position and understanding the important external factors that may influence that position. Factors Taken into Consideration for Strategic Analysis and Choice
Key Internal Factors
- Marketing
- Management
- Operations/Production
- Accounting/Finance
- Computer Information Systems
- Research and Development
Key External Factors
- Political/Governmental/Legal
- Economy
- Technological
- Social/Demographic/Cultural/Environmental
- Competitive
Techniques Used in Strategic Analysis
The following devices or techniques are used in the procedure of strategic analysis:
- Five Forces Analysis
- PEST Analysis (Political, Economic, Social and Technological Analysis)
- Market segmentation
- Scenario planning
- Competitor analysis
- Directional policy matrix
- SWOT Analysis (Strength, Weaknesses, Opportunities, and Threats Analysis)
- Critical Success Factor Analysis
Strategic choice
Strategic choice involves understanding the nature of stakeholders expectations, identifying the strategic option and evaluating and selecting the best/optimal choice amongst all.
Strategic implementation
Strategic implementation is the penultimate stage of strategic management and strategic analysis and choice are two significant constituents of that process.
Characteristics of Strategic Analysis and Choice
Following are the features of strategic analysis and choice:
- Establishment of long-term goals
- Producing strategy options
- Choosing strategies to act on
- Selecting the best option and accomplishing mission and goal
At the time of performing strategic analysis and arriving at strategic choices, long term goals are fixed and different types of strategies are chosen that are most appropriate for the mission of the company and the variable conditions.
Strategic analysis and choice of strategies are done with the help of a number of techniques. If the appropriate strategy is chosen, a company would become more efficient to establish sustainability in competitive advantage and maximize firm valuation.