Strategic Management: Strategic Analysis

The first step of the formal strategic planning process is to complete a strategic analysis, where you will review the businesses internal and external environments with a view to completing a SWOT analysis.

This SWOT will be used as an input into the development of strategic options and making a strategic decision.

With a solid grasp of strategic analysis you will be improving the quality of your strategic decisions. To assist you to do a great job I have included detailed templates for each section of your analysis.

To complete your analysis you will research your businesses

  • External environment consisting of

    • Macro environment analysis, and

    • Industry Environment analysis

  • Internal environment

This is the investigation/research stage of developing your strategic plan. Once grasped strategic analysis is also the foundation skill and most used skill in strategic thinking.

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This is the investigation/research stage of developing your strategic plan. Once grasped strategic analysis is also the foundation skill and most used skill in strategic thinking.

Macro Environment Analysis

The macro environment analysis looks at factors that affect many industries, such as changes in interest rates.

When completing a macro environment analyses you will be seeking to answer the questions “what will affect the growth of our industry as a whole” and “What is the likely impact of all of the things that affect the growth of our industry”

The things that may affect your industry as a whole may also affect many industries, such as interest rate rises, however you are only concerned with the things that affect your industry.

Industry Environment Analysis

The industry environment analysis looks at factors that affect the industry, the profitability or competitive position of the industry.

When completing an industry environment analysis you will be seeking to answer the questions “What is the profitability of the industry likely to be” or “will these things increase or decrease competition (typically price competition) in your industry”

For example deregulation is making it easier for non-banks to enter the home lending market which inturn increases pressure on banks to run with lower interest rate margins.

Internal Environment Analysis

When completing an internal analysis you will be seeking to answer the questions “What does our business do better than our competitors that is valued by our customers and is hard for others to imitate or replicate” (I have heard this referred to as your value proposition and your strategic competitive advantage)

And the question “What about our business will assist us to implement our strategy and what will constrain our strategy”

For example: If you have limited financial resources don’t develop a strategy that requires a lot of investment.

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Strategic Analysis- Macro Environment Analysis
Industry Environment Analysis
Internal Environment Analysis

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Strategic Planning Template - Macro Environment

Strategic Planning Template - Industry Environment