MODELS FOR YOUR STRATEGIC ANALYSIS
There are a number of useful business-analysis models that may help you think more strategically about your business.
The SWOT analysis (strengths, weaknesses, opportunities, threats) is one of the most popular. This involves looking at the strengths and weaknesses of your business’ capabilities, and any opportunities and threats to your business. Once you’ve identified all of these, you can assess how to capitalise on your strengths, minimise the effects of your weaknesses, make the most of any opportunities and reduce the impact of any threats.
Opportunities and threats in the external environment
It’s important to remember that opportunities can also be threats – for example, new markets could be dominated by competitors, undermining your position. Equally, threats can also be opportunities -for example, a competitor growing quickly and opening a new market for your product or service could mean that your market expands too.
A SWOT analysis can provide a clear basis for examining your business performance and prospects. It can be used as part of a regular review process or in preparation for raising finance or bringing in consultants for a review.
Once you have collected information on your organisation’s internal strengths and weaknesses, and external opportunities and threats, enter this data into a simple table.
- Positive Negative
- Internal Strengths Weaknesses
- External Opportunities Threats
Other tools include:
STEEPLE analysis – a technique for understanding the various external influences on a business – Social, Technological, Economic, Environmental, Political, Legal and Ethical.
- Scenario planning – a technique that builds various plausible views of possible futures for a business.
- Critical success factor analysis – a technique to identify the areas in which a business must succeed in order to achieve its objectives.
- The Five Forces – the theory that there are five defined factors that influence the development of markets and businesses – potential entrants, existing competitors, buyers, suppliers and alternative products/services. Using this model you build a strategy to keep ahead of these influences.
Have I missed anything? Let me know, leave a comment below.