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  3. Summary of Strategic Analysis

Summary of Strategic Analysis

]Components of Strategic Analysis

A detailed and organized approach to Strategic Analysis might follow the following steps:

Customer Analysis

– Market Segmentation

– Target Markets

– Customer Demand & Priority

Company analysis

– Value Proposition

– Business Operations (Value Chain)

– Business Model

– SWOT Analysis

– Business Strategy (Product/Market Matrix; BCG Matrix; GE/McKinsey Matrix)

– Competitive Advantages

Competitor Analysis

– Revenue drivers

– Cost structure

– Price/Value Curve

– Profitability Matrix

– Budget and Cash Flow

– Price/Value curve

– Competitive positioning map

Industry and Market Analysis

– Porter’s Five Forces

– Competitor Advantages

Future Trends and Analysis

– PESTEL Factors

– Customer & Demographic Changes

– Competitive Changes

Using the Analysis to Develop Choose or Develop a Strategy

The above analyses should provide sufficient information to choose or develop a strategy that meets with your business’ ability and improves your position in the market. In any event, you will want to choose a strategy that:

  • Is within your business current or potential strengths,
  • Minimizes or avoids your business’ identified weaknesses,
  • Works to capitalize upon identified market opportunities, and
  • Avoids the identified internal and external threats associated with a strategic
    position.

In order to employ this information in choosing a strategy, there are certain assumptions one must recognize about a business and industry. The underlying drivers of profit are the same across businesses and industries. And, Competition within any industry is the primary factor in determining profitability in an established or emerging market. Remember for a strategy to be effective it should do any or all of the following:

  • Reduce supplier power,
  • Reduce consumer power,
  • Avoid or reduce the threat of substitutions,
  • Raise the barriers for new entry,
  • And out maneuver market competitors.

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