THE “STRATEGIC ANALYSIS FRAMEWORK”
I. Identification & Assessment of the Major Issues, Opportunities, & Threats:
Issues ‐ What are the most important issues facing the firm and its industry?
II. Analysis of External Environment (Macro, Industry, & Competitive Environment Assessments):
Macro Environmental Analysis ‐ Assess components of the Macro environment (PESTL)
Objective: Determine Opportunities & Threats that exist in the macro environment.
Opportunities ‐ What are the major opportunities facing the industry?
Threats ‐ What are the major threats facing the industry?
Industry Analysis ‐ Assessment of the Industry (Size, Age, Trends, Dynamism, Forces, and Attractiveness)
Objective: Determine Overall Attractiveness of industry
Competitor Analysis ‐ Assessment of the Major Players, their strategies, relative performance and positions
Objective: Determine Strategic Industry Factors (current basis for successful creation & capture of value)
III. Analysis of Internal Environment (Firm):
Internal Environmental Analysis ‐ Describe the firm, its business model, mission, objectives, market, customers, stakeholders, etc. Assessment of the resources and capabilities the firm has to work with, its ability to create and capture value, and the sustainability of its business model.
Objective: Determine Strengths & Weaknesses of the firm.
Strengths ‐ What are the major resource and capability advantages the firm posses?
Weaknesses ‐ What are the major resource and capability deficiencies facing the firm?
Performance Analysis ‐ Identify the firm’s profit mechanism(s) and assess its performance of its strategic and financial objectives.
Objective: Evaluate the effectiveness of the firm’s current strategies.
IV. Strategic Options Analysis:
Strategic Options ‐ Develop a list of potential Options/Alternatives available to the firm to address the major issues identified using a “T‐O‐W‐S” analysis by combining your external (O/T) and internal analyses (S/W).
V. Recommendations Assessment:
Recommendations ‐ Logical, well‐justified, and factually supported recommendation(s) that addresses the major issues you identified subject to the considerations/constraints of your external and internal analyses.