“Strategic Value Analysis” for

Competitive Advantage
Greg Young
North Carolina State University

EXECUTIVE SUMMARY
Strategic value analysis (SVA) integrates decision analysis with well-known
principles of business strategy to develop spreadsheet-based models that select
among alternative paths to competitive advantage. These models rank strategic
alternatives by evaluating in one spreadsheet the competitive intelligence about
rivals, customers, and suppliers, together with the value of the business position on
key resource factors for success. Strategic value analysis applies scenario analysis and
sensitivity analysis to the spreadsheet to test the validity of the ranking. Two core
SVA processes, learning and evaluation, call for the CI analyst to have a central
role in decision-making for competitive advantage, and to build collaborative
working relationships with management and other sources of expert information.
This article describes SVA and illustrates it with examples from actual business
experiences. © 1999 John Wiley & Sons, Inc.

The primary role of the competitive intelligence (CI)
professional is to contribute to achieving competitive
advantage for their organization by enhancing the effec-
tiveness of business decision-making (Rosenkrans, 1998;
Youngblood, 1998). Strategic value analysis (SVA) sup-
ports this critical function with collaborative processes
that build spreadsheet-based models to rank alternative
action-oriented decisions from most to least valuable for
creating and sustaining competitive advantage. Spread-
sheet-based tools generally are effective means to com-
Competitive Intelligence Review, Vol. 10(2) 52– 64 (1999)
© 1999 John Wiley & Sons, Inc. CCC 1058-0247/99/02052-13
municate competitive intelligence (Berger, 1996), and
SVA is particularly responsive to managements’ descrip-
tion of what they want from a competitive intelligence
function (see Table 1).
Strategic value analysis integrates techniques from deci-
sion analysis with industry intelligence and strategic re-
source concepts that focus on the sources of competitive
advantage (Readers interested in learning more about current
thinking on competitive advantage are referred to Bisp, Sorensen,
& Grunert, 1998; Grant, 1998; Prince, 1998; Ruhli & Sachs,

52

Table 1. Strategic Value Analysis Responds to What Managers Want From CI
What Managers Want From CIa
Managers want actionable intelli-
gence from their CI operations.
CI analysts should provide manage-
ment with answers to key ques-
tions.
Management needs to understand
how the CI analyst came to
their conclusions.
CI analysts and their management
customers should have an inter-
active relationship.
The IT infrastructure supporting
CI should be low cost, adapt-
able, and easy to use.
a
Prescott, J., Herring, J., & Panfely, P. (1998). Leveraging information for action: A look into the competitive and business intelligence consortium
benchmarking study. Competitive Intelligence Review, 9(1), 4 –12.
1997.). The focus of this article is to first outline the ele-
ments of a strategic business decision, then show how these
elements are incorporated in strategic value analysis. Also,
how to build SVA-decision models and charts using
spreadsheets is explained, as well as how to use scenario
and sensitivity analysis to test the impact of changes in
managerial preferences or in the competitive context. Im-
portantly, the learning and evaluation processes discussed in
this article emphasize that successfully implementing SVA
depends on the CI analyst’s network of collaborative
working relationships with key managerial, market, and
technical experts.
The Elements of a Strategic Business Decision
Business managers have performance objectives intended
to build toward, and sustain, a position of competitive
advantage (Grant, 1998; Langabeer, 1998). Unfortu-
nately, the path to superior performance and advantage
is not always clear-cut, and managers must choose
among alternative investments or actions that they can
undertake to accomplish their objectives. For example, a
major U.S. brewery, losing market share and struggling
in a flat beer market, recently brought in an outside
Strategic Value Analysis
Strategic Value Analysis
SVA prioritizes alternatives based on contribution to competitive
advantage, and recommends to management the top-ranked
choice for approval and further action.
SVA identifies key factors for successful performance and their
relative contribution to business objectives.
SVA uses a spreadsheet format, with graphic representation of
recommendations and the impacts of underlying assumptions.
This facilitates communication and provides management with
an auditable and easy to understand tool.
SVA depends on collaborative interaction with management to
document and support their objectives, preferences, trade-offs,
and strategic insights.
SVA uses inexpensive and commonly available personal comput-
ers and spreadsheet software. SVA itself can be implemented
without extensive training or infrastructure expense.
consultant to evaluate strategic alternatives that include
“go-it-alone,” partnerships with other domestic or inter-
national brewers, and purchase or sale of assets (Wall
Street Journal, 1998). Similarly, in the pharmaceutical
industry managers with expiring drug patents may need
to decide on the merits of investing in research to find
the next “billion-dollar wonder drug” versus owning a
generic-drug product line; or competing in the prescrip-
tion drug segments versus the over-the-counter seg-
ments. They may consider whether to maintain internal
development capabilities or instead, acquire new drugs
from external development sources; whether to locate
manufacturing facilities within the U.S. or in a foreign
host country.
For any business decision, it is only natural for man-
agement to prefer the alternative that returns the highest
overall performance results on their objectives. Often,
these objectives are stated in terms of profitability, such
as return on investment, and the proof of achieving
competitive advantage ultimately is observed in the fi-
nancial condition of the firm. Unfortunately, it is diffi-
cult to know ahead of time what future financial flows
will come from strategic actions in the present. For ex-
53
 Young
ample, future cash flows depend not just on the current
decision, but also on future decisions and actions yet to
be taken. Further, present financial value depends on
the time period selected for analysis as well as assump-
tions about interest rates over the period.
The strategic approach to forecasting competitive
advantage does not rely on financial analysis of future
cash flows. Instead, SVA assumes that the profitability of
cash flows is driven by, and will be the outcome of,
three strategic considerations:
1. The resources a business can mobilize to satisfy cus-
tomers and defend against the threats of the market-
place.
2. The intensity of competitive threats.
3. The power of customers and suppliers to drive hard
bargains that push business costs up or revenues down
(Bisp, Sorensen, & Grunert, 1998; Grant, 1998;
Langabeer, 1998; Beldona Chaganti, Habib, & Ink-
pen, 1997).
To choose one strategic alternative over others, there-
fore, the CI analyst may evaluate these three broad con-
siderations rather than attempt to forecast future cash
flows directly.
The analyst using this strategic approach to forecast
competitive advantage is likely to discover that each of
these three broad considerations is a function of more
detailed component factors (Grant, 1998, pp. 58, 113).
Table 2 decomposes the business resource position on
key success factors into tangible, intangible, and human
resources. Tangible resources can be decomposed further
by considering financial and physical assets; intangible
resources can be disaggregated to examine the business
technology, reputation and brand image, and organiza-
tional culture. A disaggregated evaluation of the human
resource contribution to competitive advantage could
examine employee attitudes, motivation, technical skills,
and knowledge.
Table 3 shows that the competitive threat to building
and sustaining a competitive advantage can be evaluated
in more detail by examining separately the intensity of
competition from existing rivals, the threat of market
entry from businesses not currently competitors, and the
threat from substitute products (for example, customers
may be willing to substitute wine for whiskey, or fruit
juice for wine).
The CI analyst may evaluate these considerations at
any level of detail, and the level need not be the same
across all the evaluation considerations. For example,
54
managers in a local Internet services company use SVA
in their product marketing “go, no go” decisions. They
compare customer requirements and demand to their
own business strengths on tangible and intangible re-
sources at the lower levels (financial and physical assets,
technology, reputation, and culture), they assess their
human resource strength at the higher level, and they
analyze industry threats at the very highest level of ag-
gregation.
MANAGERS AT A LOCAL INTERNET SERVICE
COMPANY USE SVA IN THEIR PRODUCT
MARKETING “GO, NO GO” DECISION, COMPARING
CUSTOMER REQUIREMENTS AND DEMAND TO
THEIR OWN BUSINESS STRENGTHS ON TANGIBLE
AND INTANGIBLE RESOURCES.
To clarify this point, Figure 1 arranges the resource
and industry threat considerations from Tables 1 and 2
into a strategic value hierarchy that shows the relation-
ship among the aggregate and component parts. Refer-
ring to Figure 1, the analyst may choose to evaluate any
combination that does not involve omission of an entire
category or double counting within a category (strategic
considerations I., II.A., II.B. are one such set; consider-
ations I.A., I.B., I.C., II.A.1., II.A.2., II.A.3., II.B. are
another). The appropriate level of analysis is likely to be
a function of available information sources, time, bud-
get, and managerial preference. Strategic value analysis
in the Internet services company discussed above con-
sists of levels (I.A.1., I.A.2., I.B.1., I.B.2., I.B.3., I.C.,
II.). Of course, CI analysts may elect to drill down fur-
ther and decompose lower-level considerations to even
finer layers of detail.
No matter which levels are selected for analysis, all
influential considerations may not be equal in their im-
portance for building competitive advantage (Langabeer,
1998). Accordingly, managers and expert sources need
to guide the analyst to the appropriate level of detail and
weighting for the strategic factors that will be considered
in the strategic value analysis.
In sum, the elements of a business decision are the
alternative strategies to achieve performance objectives
and the evaluation considerations that any strategy must
satisfy if competitive advantage is to be achieved. Strate-
gic value analysis incorporates all of these elements in a
spreadsheet-based decision model, ranks the alternatives’
likelihood to achieve competitive advantage by deter-
mining their “score” on the evaluation considerations,
 Strategic Value Analysis

Table 2. Measuring Business Resources—Strength on Key Success Factorsa

Evaluation Considerations
Higher Level Lower Level Illustrative Measurement Scale and Criteriab

I.A. Tangible resources 1. Financial assets 0 (Low): Our profitability is very likely to
be lower than our rivals’ because of the
inferiority of our tangible resourcesc rel-
ative to theirs.
2. Physical assets 1 (Medium): Our profitability is very likely
to be about the same as the average of
firms selling in our market because of
the rough equivalence of our tangible
resourcesc relative to theirs.
2 (High*): Our profitability is very likely
to be higher than our rivals’ because of
the superiority of our tangible resourcesc
relative to theirs.
I.B. Intangible re- 1. Technology Between 0% and 100% of total market de-
sources mand will be captured by our firm be-
cause of our strength on intangible re-
sourcesd relative to our rivals.
2. Reputation and brand Our objective is to have closer to the
image HIGH end of this range.
3. Organizational culture
I.C. Human resources 1. Attitudes 0 (Low): Our profitability is very likely to
be lower than our rivals’ because of the
inferiority of our human resourcese rela-
tive to theirs.
2. Motivation 1 (Medium): Our profitability is very likely
to be about the same as the average of
firms selling in our market because of
the rough equivalence of our human
resourcese relative to theirs.
3. Technical skills 2 (High*): Our profitability is very likely
to be higher than our rivals’ because of
the superiority of our human resourcese
relative to theirs.
4. Knowledge

a
Table adapted from (Grant, 1998, p. 113). Numbering of Evaluation Considerations taken from Figure 1.
b
Criteria scores need to be supported by competitive intelligence and scenario analysis. High* score is preferred for building competitive advantage. As
shown by the measurement of intangible resources, analysts may replace the three-point (High/Medium/Low) scale with more precise information (e.g.,
profitability, revenue or market share data) if available and desirable.
c
Tangible resources are the financial and physical assets of the business, evaluated separately (lower level) or all together (higher level).
d
Intangible resources are the technology, reputation, and brand image, organizational culture of the business, evaluated separately (lower level) or all together
(higher level).
e
Human resources are the people’s attitudes, motivation, technical skills, and knowledge, evaluated separately (lower level) or all together (higher level).

55
 Young

Table 3. Measuring Industry Threats

Evaluation Consideration
Higher Level Lower Level Illustrative Measurement Scale and Criteriaa

II.A. Competitive threat
II.B. Vertical bargaining
threat
1. Threat from existing rivals
2. Threat of new entry
3. Threat from substitute
products
1. Bargaining power of cus-
tomers over terms of con-
tract and transactions
2. Bargaining power of sup-
pliers over terms of con-
tract and transactions
0 (Low*): It is extremely unlikely that the
competitive threatb can reduce the average
profitability of the selling firms in our mar-
ket.
1 (Medium): There is a reasonable likelihood
that the competitive threatb will cause a
moderate reduction in the average profit-
ability of the selling firms in our market.
2 (High): There is a strong likelihood that the
competitive threatb will cause a significant
reduction in the average profitability of the
selling firms in our market.
On average for all competitors in our indus-
try, vertical bargaining threatsc will cause
between 0 and 100% of every sales dollar
to be absorbed by the costs of satisfying
contracts and transactions.
Our objective is to have closer to the LOW
end of this range.

a
Criteria scores need to be supported by either competitive intelligence or scenario analysis. Low* scores are preferred for building competitive advantage.
As shown by the measurement of vertical bargaining power, analysts may replace the 3-point (High/Medium/Low) scale with more precise information (e.g.,
prices and costs) if available and desirable. Numbering of evaluation considerations taken from Figure 1.
b
Competitive threats are those from existing rivals, from any business that may enter the market to become a competitor, and from substitute products,
evaluated separately (lower level) or all together (higher level).
c
Vertical bargaining threats to profitability arise from the power of customers and suppliers over the terms of the contract and transactions, evaluated
separately (lower level) or both together (higher level).

and tests the stability of the recommended ranking to
changes in assumptions about the competitive and stra-
tegic context.
SVA Learning and Evaluation Processes
Strategic value analysis is a process that estimates, for any
decision faced by management, which of the available
alternatives will create the most business value or com-
petitive advantage. Strategic value analysis consists of
two processes: a learning process, shown in Figure 2, and
an evaluation process, shown in Figure 3. The effort ap-
plied in these processes depends on the magnitude of
the strategic problem. The Internet services company
discussed above completes routine analyses within 2
days. Strategic decisions involving substantial invest-
ments have been completed in 2 weeks.
SVA Learning Process
As shown in Figure 2, the analyst starts the learning
process by collecting information from both inside and
outside their organization to get a preliminary under-
standing of the evaluation considerations and how to
measure them. Competitive intelligence from customers,
suppliers, market or technical experts, government, and
trade associations are good sources for this contextual
information. Prior discussion in CIR has shown CI ana-
lysts how to use data mining (Mena, 1996), competitive
market structure analysis (Paul & Chakravarti, 1996),
and experiential modeling (Kesting & Woods, 1996) to
capture significant considerations for management’s eval-
uation in strategic decision making. The analyst’s pre-
liminary set of evaluation considerations and measures
are brought to the next activity of the SVA learning

56

Figure 1.
A generic strategic value.
process, the interviews with key management decision-
makers.
As shown in Figure 2, the analyst uses the prelimi-
nary competitive intelligence as the foundation for
working with key management decision-makers. These
interviews are intended to identify managerial objectives
for business performance, their insights concerning stra-
tegic evaluation considerations, the relative importance
of these considerations, and the preferred approach to
measure the business’ position, or status, on each con-
sideration.
SCENARIO ANALYSIS IS NOT INTENDED TO
PREDICT THE FUTURE BUT RATHER TO
ENCOURAGE PEOPLE TO CREATIVELY AND
SYSTEMATICALLY THINK “OUTSIDE THE BOX”
ABOUT THE IMPLICATIONS OF ALTERNATIVE
FUTURES.
To avoid a form of “strategic myopia” from limiting
the effectiveness of these interviews, it is important to
Strategic Value Analysis
consider the impact of a variety of scenarios on the stra-
tegic considerations (Grant, 1998: p. 255; Kirkwood,
1997; Tessun, 1997). Scenario analysis is not intended to
predict the future but rather to encourage people to
creatively and systematically think “outside the box”
about the implications of alternative futures. Table 4 lists
generic scenarios that the analyst can introduce for this
purpose.
As shown in Figure 2, the CI analyst introduces sce-
nario analysis in the SVA learning process to stimulate
thinking when collecting information and working with
management decision-makers. For example, what if the
economy is better (or worse) than we expect? What if
we lose (or find) a large customer or supplier? What if a
major competitor enters (or leaves) the market? What if
current competitors respond more quickly (or more
slowly) than they have in the past?
Scenario analysis helps broaden the perspective of
management and the key decision-makers when work-
ing with the CI analyst. The creativity introduced into
the SVA learning process may suggest new strategic ob-
57
 Young
Figure 2.
SVA learning process and output.
jectives, changes in key success factors, or affect rela-
tionships among evaluation considerations.
The analyst organizes the information from the manage-
ment interviews into a strategic value hierarchy. This hier-
archy documents the evaluation considerations and the
logical relationships among them, managerial objectives for
these considerations, and specifies the measurement ap-
proach for these items. Examples of hierarchy documenta-
tion are found in Tables 2 and 3 and Figure 1.
If management decision-makers do not accept the
hierarchy as documented, then the analyst must go back
to the start of the process to relearn the strategic context
and the preferences of management. The level of effort
required for relearning depends on the magnitude of the
objections that caused the disapproval.
SVA Evaluation Process
When management decision-makers approve the strate-
gic value hierarchy, the analyst proceeds to the SVA
evaluation process (shown in Fig. 3). There are three
tasks in the evaluation process. The analyst uses the stra-
tegic value hierarchy documented during the earlier
learning process as input into the first task of the evalua-
58
tion process. In this first task, the analyst works with
management and other key decision-makers to generate
interesting alternatives for evaluation. In the second task,
the analyst works with key decision-makers and experts
to score each strategic alternative on each evaluation
consideration. The analyst uses these scores to build and
calculate a spreadsheet-based decision model, the third
task of the evaluation process (the next section of this
article discusses how to build this spreadsheet).
As shown in Figure 3, scenario analysis introduced
into the SVA evaluation process may suggest new sets of
interesting strategic alternatives to consider or scenario-
specific ideas useful to score an alternative’s contribution
to competitive advantage. In this way, scenario analysis
sensitizes decision-makers to the contingent nature of
competitive advantage and the need to monitor the en-
vironment for changes that impact the value of strategic
alternatives.
In the third evaluation task, the analyst applies the
strategic value hierarchy using spreadsheet software (e.g.,
Excel, Lotus, or Quattro Pro) to evaluate the alterna-
tives suggested by management and other key decision-
makers. The output of this task is a value-based ranking,

Figure 3.
SVA evaluation process and output.
or scoring, of the alternative paths to achieve competi-
tive advantage. In the case of a “go, no go” decision,
for example, the “go” alternative receives a total score
that can be compared to the overall score for the “no
go” alternative. The Internet services company that uses
the SVA method in this way finds that, because the
spreadsheet quantifies information and provides charting
capability to summarize complex information, decision-
making benefits from clear communication and audit-
ability of the underlying assumptions and competitive
intelligence.
Finally, the analyst tests the robustness of the ranking
by conducting a sensitivity analysis (discussed in more
detail below). In this last task, the analyst produces
spreadsheet-generated charts that show each alternative’s
total score and any difference in ranking under a range
of assumptions. To complete the evaluation stage of
SVA, management selects the alternative that, on bal-
ance, best achieves the objectives as shown by its high
score relative to the other alternatives.
Building an SVA Spreadsheet
In the evaluation phase, the analyst constructs a spread-
sheet in which strategic alternatives are listed as column
Strategic Value Analysis
headers and the row labels are the industry context and
key success factor considerations on which each alterna-
tive will be evaluated. An example of such a spread-
sheet, given in Figure 4, shows three alternatives being
evaluated for a pharmaceutical company:
1. Continue the status quo.
2. Start a generic drug line.
3. Search for a new patentable “biotech wonder drug.”
Each alternative is evaluated on the considerations listed in
the rows, and each evaluation consideration has a weight
entered along side it to indicate the best estimate of its rela-
tive contribution to achieving competitive advantage.
The spreadsheet in Figure 4 shows a score entered at
the intersection of each evaluation consideration and
strategic alternative. This score documents the opinion
of the decision-making group concerning the extent to
which that alternative, independent of all other alterna-
tives, satisfies the performance objectives for that consid-
eration.
To avoid erroneous results that may arise from the
units in which raw scores are reported, the analyst
should convert all scores on evaluation considerations to
a common “value equivalent” or normalized scale
59
 Young
Table 4. Generic Scenariosa
Life Cycles
Pace of Change
Radicalness of Change
Key Players
Resource Creation
a
Kirkwood, C.W. (1997). Strategic decision making: Multiobjective decision analysis with spreadsheets. Belmont, CA: Duxbury Press.
(Kirkwood, 1997 discusses several simple approaches).
Without this conversion, for example, the same amount
of forecasted revenue would give a higher score if re-
ported in thousands of dollars instead of in millions.
Similarly, the totals and rank order for each alternative
in Figure 4 would be different if the pharmaceutical
company had calculated Intangible Resources and Verti-
cal Bargaining Threat with percentage scores between
0 –1 instead of the 0 –100 range that appears in the ta-
Figure 4.
A strategic value analysis spreadsheet example.
60
The industry opportunities may be characterized as representative
of start-up, growth, maturity, or decline stages. These should be
considered separately during scenario planning. How would the
contents of the Strategic Value Hierarchy differ in different stages
of the life-cycle?
How would the contents of the Strategic Value Hierarchy differ
in a slow versus rapid change context?
Change may be incremental or radical in magnitude. What parts
of the analysis would change in each?
Who are the major customers, suppliers, and competitors? What
are they trying to accomplish, what do they value? How do
changes in the key players’ identity, goals, and ability to domi-
nate the industry affect the contents of the Strategic Value Hier-
archy?
Is the availability of resources likely to be stable, more scarce, or
more abundant? What parts of the analysis would change in each
of these contexts?
ble. Thus, rank ordering of the alternatives may change
for no other reason than the reporting unit changes.
Further, whether thousands or millions of dollars are
reported, dollar amounts are often very large and may
overwhelm the scoring for other considerations mea-
sured in percentages. Converting scores to normalized
value equivalents resolves these problems.
Figure 4 shows that for each alternative a sum is cal-
culated from the value-equivalent scores multiplied by

Figure 5.
Value of strategic alternatives in a pharmaceutical firm.
the weight of its associated evaluation consideration.
These sums are used to rank the alternatives— higher
scores preferable to lower scores, the alternative with
the highest total score is most likely to be a superior
path to competitive advantage.
Testing the Sensitivity of Recommendations
The decision results calculated on the spreadsheet can be
presented graphically as shown in Figure 5.
A natural question is “What happens to the ranking if man-
agement or other key players change the weights or scores?” That
is, would we obtain different results if the assumptions built
into the spreadsheet change? The stability of the ranking
can be tested with a sensitivity analysis that recalculates the
ranking either for a range of consideration weights or for a
range of alternative scores on considerations. Figure 6
shows an example of a sensitivity analysis.
The figure shows that in the case of the pharmaceuti-
cal company whose patents are about to expire, the bio-
tech alternative is superior if the competitive threat is
weighted above approximately 10%, but below this
weight the status-quo product line is superior. One im-
plication of this finding is that, for pharmaceutical firms
using these decision parameters, reducing the significance
of rivalry in managers’ perception of their industry (such a
change in thinking may result from consolidations and
mergers often reported in the press) changes their preferred
strategic approach. In this case, the status quo becomes
Strategic Value Analysis
more attractive than the more risky and expensive hunt for
a biotech winner.
IF THE SENSITIVITY ANALYSIS SHOWS THAT THE
PREFERRED ALTERNATIVE WILL CHANGE IF THE
WEIGHT OR SCORE OF AN EVALUATION
CONSIDERATION CHANGES, THEN MANAGEMENT
SHOULD MONITOR THAT FACTOR FOR ANY SIGN
OF ITS REACHING THE THRESHOLD OF CHANGE.
Although the numbers that result from sensitivity
analysis can be complex and voluminous, spreadsheet-
generated charts based on these sensitivity calculations
easily communicate the big picture: Does the best alter-
native become second place, or worse, somewhere on
the sensitivity analysis chart? If the sensitivity analysis
shows that the preferred alternative does change if the
weight or score on an evaluation consideration changes,
then management and other key decision-makers should
monitor that factor for any sign that it will reach the
threshold of change.
Discussion: Where Do All the Numbers Come From?
The role of the CI professional is to support the effec-
tiveness of business decision-making (Rosenkrans, 1998),
and SVA is a tool that enhances the decision-makers’
capacity to identify strategic alternatives likely to return
superior profitability and build competitive advantage.
61
 Young
Figure 6.
Sensitivity analysis weight of “Competitive Threat.”
As with any strategic decision-making method, SVA
has advantages and disadvantages. This article has
pointed out advantages that include a focus on strategic
action and value creation, auditability, clarity of com-
munication, low infrastructure costs, and contribution to
a collaborative organizational culture sensitized to the
sources of competitive advantage. In contrast to these
advantages, there are four primary limitations of the
SVA approach. These concern:
1. Levels of effort that may exceed the value-added
from the analyses.
2. Potential oversimplification of complex interre-
lated factors that influence competitive advan-
tage.
3. Analyses that may trail behind rapid change in
fast-paced industries.
4. Errors that may be introduced by subjective
judgements, poor analysis, or poor information
(a “garbage in, garbage out” phenomenon).
62
The CI analyst, however, can take proactive steps to
guard against these limitations.
First, SVA costs can be estimated and explicitly bal-
anced against the magnitude of the strategic decision.
This estimate, perhaps in the form of a “Proposal for
Analysis,” can be a useful mechanism for analysts to plan
their effort appropriately as well as to increase decision-
makers’ awareness of SVA availability. As mentioned
earlier, SVA analyses may range from several hours (for
familiar situations with standard and reusable value hier-
archies) to several weeks for critical strategic decisions
involving major investments.
Strategic value analysis is not an appropriate decision
tool if neither management nor industry experts can
identify the independent influences that resource
strengths and industry threats have on organizational
performance. If the strategic situation is complex and
ambiguous, SVA may force oversimplifications that lead
to erroneous results. Even in such situations, however,
decision-makers still can find SVA useful to focus their

organization’s attention on likely strategic factors and
facilitate discussions that may lead to additional intelli-
gence and understanding.
In fast-paced business environments there is some risk
that SVA spreadsheets may become obsolete before a
strategic decision can be made or implemented. To in-
corporate “real-time” information, some companies imple-
ment a “war room” environment for ongoing analyses.
Analysts provide the war room with a list of critical SVA
information to be monitored, and analysts on a “war
room” distribution list are provided with requested real-
time intelligence. In these volatile competitive situations,
analysts start their workday in the war room to access in-
formation that might have changed since their last update.
SOME COMPANIES IMPLEMENT A “WAR ROOM”
FOR ON-GOING ANALYSIS. IN THESE VOLATILE
SITUATIONS, ANALYSTS START THEIR WORKDAY
IN THE WAR ROOM TO ACCESS INFORMATION
THAT MIGHT HAVE CHANGED SINCE THEIR LAST
UPDATE.
A frequently mentioned limitation of a computer-
based decision method such as SVA is that it may
lend computer-generated credibility to otherwise un-
reliable, subjective, and possibly biased judgements
(Galbraith & Merrill, 1996). This problem is more
common if people are poorly trained, clear guidelines
are not provided, precise information is not available,
decision participants come from different parts of the
organization and have different priorities and inter-
ests, or if there are differences in organizational rank
and power between analysts and SVA users. Although
reasonable people can disagree about strategic consid-
erations and implications for competitive advantage,
misinformed decision analyses can be very harmful.
One resolution for this problem is to include proce-
dural guidelines in every part of the SVA process. For
example, documentation of information, sources, as-
sumptions, change requests, analytical techniques, and
points of contact creates a clarifying paper trail that
opens for discussion the supporting basis for the anal-
ysis. In addition, participants in the SVA process can
receive training in strategic management and ethical
guidelines for inter- and intraorganizational knowl-
edge sharing. Finally, senior management should exercise
oversight so that all SVA participants understand their re-
sponsibility and accountability for the integrity of the
process.
Strategic Value Analysis
For the decision analyst, constructing an SVA spread-
sheet on a personal computer is relatively easy compared to
the difficulty of getting management and other key organi-
zational players to reach a consensus on just what are the
strategic alternatives, what are the evaluation considerations,
what is their relative contribution to successful perfor-
mance, and how does each alternative measure up on each
consideration? Just how intense is competition? How pow-
erful are our customers and suppliers? How strong are our
resources compared to our competitors? To answer these
questions, the analyst must build a network of ongoing
working relationships with key managerial, market, and
technical experts (Solomon, 1996). These relationships are
the critical resource on which the analyst draws to develop
and continuously refine knowledge about the strategic
context, to frame strategic intelligence as choices among
alternative paths to competitive advantage, and to clearly
communicate this knowledge to management decision-
makers.
From this perspective, the success of the SVA process
depends on an organizational culture of learning, strategic
awareness, and relationships based on open communica-
tion. As suggested by Rosenkrans (1998), one measure of
this success is likely to be the frequency with which man-
agement demands SVA be used in decision-making for
competitive advantage.
Acknowledgment
The author gratefully acknowledges Julian Bossong, Greg
Bray, Julie Briddon, and Cameron McCaskill for their com-
ments on an earlier draft of this article.
References
Beldona, S., Chaganti, R., Habib, M.M., & Inkpen, A.C.
(1997). Industry variety, life-cycle stages and performance: A
dynamic perspective. Competitive Intelligence Review, 8(4),
65–74.
Berger, A. (1996). How to support your sales force with
competitive intelligence. Competitive Intelligence Review,
7(4), 81– 83.
Bisp, S., Sorensen, E., & Grunert, K.G. (1998). Using the key
success factor concept in competitor intelligence and bench-
marking. Competitive Intelligence Review, 9(3), 55– 67.
Galbraith, C.S., & Merrill, G.B. (1996). The politics of fore-
casting: Managing the truth. California Management Review,
38(2), 29 – 43.
Grant, R.M. (1998). Contemporary strategy analysis. Malden,
63
 Young
MA: Blackwell Publishers Inc.
Kesting, W.R., & Woods, K.K. (1996). Experiential model-
ing: Innovation opportunity for competitive intelligence pro-
fessionals. Competitive Intelligence Review, 7(4), 57– 68.
Kirkwood, C.W. (1997). Strategic decision making: Multiob-
jective decision analysis with spreadsheets. Belmont, CA:
Duxbury Press.
Langabeer, J.R. (1998). Achieving a strategic focus for com-
petitive intelligence. Competitive Intelligence Review, 9(1),
55–59.
Mena, J. (1996). Machine-learning the business: Using data
mining for competitive intelligence. Competitive Intelligence
Review, 7(4), 18 –25.
Paul, P., & Chakravarti, D. (1996). Market structure analysis
using managerial judgements: A framework and an experi-
mental test. Competitive Intelligence Review, 7(4), 46 –56.
Prescott, J., Herring, J., & Panfely, P. (1998). Leveraging in-
formation for action: A look into the competitive and busi-
ness intelligence consortium benchmarking study. Competi-
tive Intelligence Review, 9(1), 4 –12.
Prince, C.C. (1998). Strategy and tactics: A primer for CI
professionals. Competitive Intelligence Review, 9(3), 15–24.
Rosenkrans, W.A. (1998). Past, present, and future direction
for technical intelligence. Competitive Intelligence Review,
64
9(2), 34 –39.
Ruhli, E., & Sachs, S. (1997). Challenges for strategic intelli-
gence at the corporate level. Competitive Intelligence Re-
view, 8(4), 54 – 64.
Solomon, M. (1996). The intelligence asset-building process.
Competitive Intelligence Review, 7(4), 69 –76.
Stroh brewery says it weighs options, denies Pabst report.
(1998, October 30). Wall Street Journal.
Tessun, F. (1997). Scenario analysis and early warning systems
at daimler-benz aerospace. Competitive Intelligence Review,
8(4), 30 – 40.
Youngblood, A.H. (1998). CI: Fueling competitive advan-
tage. Competitive Intelligence Review, 9(3), 1–2.
About the Author
Dr. Greg Young is a member of SCIP and an assistant pro-
fessor on the faculty of the College of Management at NCSU
in Raleigh. Dr. Young’s teaching, research, and consulting
focuses on the influence of industry structure and organizational
resources on the competitive advantage of the firm. His work
has been published in several prestigious journals including
Strategic Management Journal, Organization Science,
and the Journal of Management Inquiry. He can be con-
tacted at Greg_Young@NCSU.edu.