Solutions for Strategic Analysis Every Entrepreneur Must Know

Access your KPIs online;
Measure your success;

Navigation: All Balanced Scorecard Articles > Strategic Planning

Among all the solutions for strategic analysis, there are three primary analyses that an aspiring venture owner should consider undertaking. These three interlocking beginner analyses are SWOT analysis, PEST analysis and Porter's five processes. Check additional information about solutions for strategic analysis.

There are a lot of other solutions for strategic analysis, but among the others, there are three main solutions for strategic analysis that you have to consider, first and foremost. While it is true that the definition for strategic analysis often differs, it still basically revolves around three things:

1. Identification and evaluation of information and data regarding the formulation of strategies;

2.Analysis of the internal attribute of the venture and the external environment in which the venture will incorporate, and;

3.A wide range of analytical methods that can be used to perform a strategic analysis.

As mentioned, there are three primary solutions for strategic analysis that are usually employed in formulating business strategies by starting companies. These three solutions interlock among the other solutions to reach a maximum profitability for the company. Listed below are the three primary solutions for strategic analysis that you have to employ in order to formulate your business strategy:

1.SWOT Analysis

-This is probably the most common term when talking about solutions for strategic analysis for beginners. It is relatively simple and less complicated. Basically, it is a method wherein you examine a company's Strengths, Weaknesses, Opportunities and Threats. This is usually chosen because it is said to be the least complicated of all the other methodologies and best of all, it is cost-effective. The only thing that it consumes is time.

2.PEST Analysis

-This is one of the most important solutions for strategic analysis. It is safe to say that PEST Analysis make up the Opportunities and Threats of a SWOT Analysis. It is usually recommended to perform a PEST factors evaluation before jumping into any other solutions for strategic analysis. PEST is the acronym for:

P - Political Factors: This pertains to the government regulations like laws of employment, tax policy and environmental regulations. Sometimes, it even includes trade factors and political stability.

E- Economic Factors: This pertains to the capital and purchasing capability of the company such as economic growth, inflation and currency exchange.]

S - Social Factors: This focuses basically on the target market itself. It assesses customer needs, market size and the organization's goods and services. Population growth, age, gender, and health attitudes also make up this part.

T - Technological Factors: The rate of technological change interferes with the technological needs of a company. Therefore, it is important to assess the company's capability to invest in innovation like automation and other investment incentives.

3.Porter's Five Processes

-Michael Porter formulated this theory in 1979 with the strong conviction that there are five processes that affects a market's competitive intensity and attractiveness. It is important to include this in your primary solutions for strategic analysis because the five processes revolve around several key factors that will make or break a company's profitability status.

The five processes are consisted of:

1.Supplier power

2.Buyer power

3.Competitive Rivalry

4.Threat of Substitution

5.Threat of new entry

The main reason why you need to perform a strategic analysis is to ensure that your business will have the characteristics that are essential to succeed in your chosen venture and marketplace. Without a perfectly analyzed strategy, you will be jumping into the war without a gun, or at least, a gun without ammo, which is worse.

If you are interested in solutions for strategic analysis, check this link to find out more about reasons strategic planning. Also, you can check other articles in Strategic Planning category.

Balanced Scorecard Toolkit includes step-by-step manuals, documents, presentations, check lists designed to help business professionals with successful development and implementation of Balanced Scorecard. Learn more about BSC Toolkit.