THE PURPOSE OF STRATEGIC AND

BUSINESS ANALYSIS
 P urpose of Stra te gic
a nd
B usine ss A na lysis

D e finition of L e ve ls of E le m e nts of R e la tiona l P roc e ss of

Stra te gy Stra te gy Stra te gic D ia gra m Stra te gy
M a na ge m e nt D e ve lopm e nt

C orpora te Stra te gic D e libe ra te , Stra te gic Stra te gic

P osition E m e rge nt, L e nse s P la nning
Inc re m e nta l Fra m e w ork
Stra te gy

B usine ss Stra te gic

C hoic e s A s D e sign R a tiona l
A s E xpe rie nc e P la nning
A s Ide a s M ode l

Func tiona l Stra te gic Gap

into A c tion A na lysis
Strategy
• “A general direction set for the company and its
various components to achieve a desired state in
the future. Strategy results from the detailed
strategic planning process.”
• “Knowledge of the goals, the uncertainty of
events and the need to take into consideration
the likely or actual behavior of others
Peter Drucker: “A strategy is a pattern of activities that seek to achieve the
objectives of the organization and adapt its scope, resources and operations
to environmental changes in the long term.”
Drucker recognized that any company’s strategy had to incorporate the answers
to four questions. (by the number process)
• What opportunities it wants to pursue and what risks it is willing and able to
accept.
• The scope and structure of its strategy, including the right balance among such
aspects specialization, diversification, and integration.
• Acceptable trade-offs between time and money and between in-house
execution versus using a merger, acquisition, or joint venture or some external
means to reach its objectives and attain its goals.
• The organizational structure appropriate to its economic realities, the
opportunities, and its performance expectations.
 Drucker also emphasized that a strategy contains
several elements:
• A strategy consists of organized activities.
• The purpose of these activities is to achieve an objective.
• Strategy is long-term.
• The strategic choices that an enterprise makes are strongly
influenced by the environment in which the enterprise exists.
• The environment is continually changing.
• Strategies involve an enterprise in doing different things with
different resources over time, as it is forced to adapt to changes in
its environment.
Johnson, Scholes and Whittington

“The direction and scope of an organization

over the long term, which achieves
advantage in a changing environment
through its configuration of resources and
competencies with the aim of fulfilling
stakeholder expectations.”
 Range or scope of strategic decisions
• Deciding the scope of the entity’s activities.
• Relating the activities of the entity to the environment in which it operates.
• Ensuring that the entity has the resource capacity to operate in its selected
areas of activity.
• Allocating resources to the different business activities.
• Providing a high-level (strategic) framework for more detailed decision-
making at an operational level.
• Reflecting the values and expectations of the individuals in positions of
power within the entity.
• Deciding the long-term direction that the entity should take.
Author of The Rise and Fall of Strategic Planning,
Henry Mintzberg observed that people use strategy in
several different ways, including:

• Strategy is a plan - HOW

• Strategy is a pattern in action over time
• Strategy is position
• Strategy is perspective
Features of Strategy
• Specialized plan to outperform the competitors.
• Details about how managers must respond to any
change in the business environment.
• Redefines direction towards common goals.
• Reflects the concern to effectively mobilize resources.
• Maximizes the organization’s chances to achieve the
set objectives.
Strategic business analysis

• Strategic business analysis involves outcome focused thinking, simultaneously

understanding business context, business challenges, and the complexities of
the internal and external environment to frame the scope of the
transformation, articulate the business need/outcome, and shape the agenda
for transformation.
• Strategic business analysis requires a focus on all aspects of the organization.
It leverages business analysis, change leadership, and program and project
management. Strategic business analysis focuses on ‘what and why’, not the
‘how’ of solution implementation.
• Strategic business analysis are those actions and decisions made by
management while trying to understand the impact of strategic events.
Characteristics of Strategic Business Analysis

• Long-term in nature
• Focus on external events and activities (O/T)
• Place more emphasis on qualitative matters
Strategic business analysis requires a keen focus on the following:

• Understanding the business structure, architectures,

and people and culture (internal)
• Conducting capability analysis to ensure the
organization can do what it says it plans to do
• Ensuring proper strengths and weaknesses are
recognized, and opportunity and threats are
identified and defined
• Business problems and opportunities are analyzed, and
solutions are brainstormed beyond the norm of improving
processes, increased sales and cut costs
• Performing feasibility and risk analysis on the potential
solutions and compare the solutions alternatives through
success and failure analysis, pros and cons discussions, and
cost, ease, benefit analysis and developing decision grids to
prioritize solutions
• Determining the proper scope change initiatives based on
business, structure and organizational parameters and
capabilities
• Developing the business case to drive out the investments and
expected returns externally or internally for the key initiatives.
• Creating a communication plan that helps guide the
organization through the changes that will take place as
initiatives become implemented, and
• Building a roadmap focused on using project management
best practices of implementation with business champions,
key initiatives, tactical focus, time and dates and a reporting
structure to ensure initiatives are moving forward as originally
planned.
https://www.batimes.com/articles/9-keen-focus-areas-in-strategic-business-analysis/
The corporate level is the highest, and therefore the most broad,
level of strategy in business. Corporate-level strategy should define
your organization’s main purpose.

Corporate strategy is crucial as it will define all other decisions that

are made within the organization along the line.
Things to do as you work on your corporate-level strategy:

1. Confirm your overall mission and vision. These two

elements define your entire organization, and so should
be done at the corporate level.
2. Create your corporate objectives. Your objectives
describe the high-level goals that will help you achieve
your mission and vision.
Business strategy generally emerges and evolves from the overarching
corporate strategy which has been set by those at the helm. They are
usually far more specific than corporate strategy and will likely be unique
to different departments or subdivisions within the broader organization.
Business strategy, also called competitive strategy, is concerned with how
each business activity within the entity contributes towards the
achievement of the corporate strategy.
Things to do as you work on your business unit strategies:

1. Differentiate yourself from your competitors. (SWOT

analysis)
2. Create objectives and initiatives that support your
business unit and the corporate level.
Functional Strategy
Things to consider as you work on your
functional strategies

1. Understand that this level has the most

detailed measures and projects.
2. Make sure the goals in your functional strategy align
with the goals at the corporate level.
3. Don’t get too “measure happy. “
Elements of Strategic Management and Business Analysis

To study strategic management, it is useful to have a

logical structure or model as a basis for analysis.
Johnson, Scholes and Whittington state that strategic
management consists of three elements:
• Strategic position
• Strategic choices
• Strategic into action
Strategic position
The strategic position is concerned with the impact on
strategy of the external environment, internal resources
and competences, and the expectations and influence of
stakeholders. Together, a consideration of the
environment, strategic capability, the expectations and
the purposes within the cultural and political framework
of the organization provides a basis for understanding
the strategic position of an organization.

Johnson and Scholes, 2005

Three aspects to strategic position (Johnson,
Scholes and Whittington)

• Environment – external (O T)
• Strategic capability of the entity – internal (S W)
• Expectations and purpose
Strategic choices

Strategic choice simply refers to the strategy chosen

out of available alternatives for attaining
organizational objectives. It is termed as the most
appropriate one that is selected after analysis of
various facts by experts. Strategic choice is the
outcome of systematic examination of distinct
alternatives where different experts make their own
calculations and finally selects a strategy by bargain.
Process of Strategic Choice
1. Focusing on alternatives
2. Analyzing the strategic alternatives (objective
factors or subjective factors)
3. Evaluation of strategies
4. Making a strategic choice.
Three elements
• Generation of strategic options, e.g. growth,
acquisition, diversification or concentration.
• Evaluation of the options to assess their relative
merits and feasibility.
• Selection of the strategy or option that the
organization will pursue.
Strategic choices need to be made of every level, though
obviously choices made at any particular level can influence
choices at other levels.
1. Corporate level – Decisions have to be made about what
the entity should be doing.
2. Business level – For companies, a major strategic choice
is between a strategy of cost leadership and a strategy of
differentiation.
3. Operational level – For example, whether an organization
should outsource components or make them itself.
 Strategy into action / implementation

These means implementing the chosen strategies. There are

three aspects to strategy implementation:
1. Organizing – An organization structure must be established
that will help the entity to implement its strategies effectively in
order to achieve its strategic targets. Organizing means putting
into place a management structure and delegating authority.
Individuals should be made responsible and accountable for
different aspects of the chosen strategies. Decision-making
processes must be established.
2. Enabling – It means enabling the entity to
achieve success through the effective use of its
resources.
3. Managing change – Most strategic planning
and implementation will involve change, so
managing change, in particular employees’ fears
and resistance, is crucial.
Ex. A full-price airline is considering setting up a no-frills, low-fare subsidiary. The
strategic planning process would include the following elements.

Strategic position – competitor action, oil price forecasts, passenger volume

forecasts, availability of cheap landing rights, public concern for environmental
damage, effect on the main brand.

Strategic choices – which routes to launch? Set up a service from scratch or buy an
existing cheap airline? Which planes to use, what on-board services to offer?

Strategic implementation – how autonomous should the new airline be? How to
recruit and train staff? Implementation of the internet booking system. Acquisition of
aircraft. Obtaining landing slots.
The Process of Strategy Development
Deliberate strategy – Michael Porter
Deliberate strategy is a top down approach to
strategic planning that emphasize intention.
This is built based on the vision and mission of
the organization and is focused on achieving
the purpose of doing business.
Generic Competitive Strategies
• Cost leadership strategy – broad market
• Differentiation strategy – broad market
• Focus strategy (focus cost , focus diff) – niche market
Emergent strategy – Henry Mintzberg
Emergent strategy is the process of identifying
unforeseen outcomes from the execution of
strategy and then learning to incorporate those
unexpected outcomes into future corporate plans
by taking a bottom up approach to management.
Emergent strategy is also referred to as ‘realized
strategy’.
 Deliberate vs Emergent Strategy

Deliberate strategy is an approach to strategic planning that Emergent strategy is the process of identifying unforeseen
emphasizes on achieving an intended business objective. outcomes from the execution of strategy and then learning to
incorporate those unexpected outcomes into future corporate
plans.

Inception of the Concept

The concept deliberate strategy was introduced by Michael Henry Mintzberg introduced the framework for emergent
Porter. strategy as an alternative approach to deliberate strategy.

Approach to Management
Deliberate strategy implements a top down approach to Emergent strategy implements a bottom up approach to
management management.

Flexibility

Deliberate strategy takes a rigid approach to management, Emergent strategy is favoured by many business practitioners
thus is largely considered to be less flexible. due to its high flexibility.
 Incremental strategy

This strategy is developed slowly over time, by making small changes to

existing strategy. Changes to strategy are not large or far-reaching, because the
management of the entity cannot see the need for any substantial changes.

When the entity’s business environment is changing, small changes to existing

strategies are unlikely to be sufficient to ensure the survival of the entity, and
incremental change might be associated with aimlessness and a lack of
strategic direction

Incremental strategy is only safe when an entity operates in a very stable

environment, where changes over time are small and gradual.
Strategy lenses
 Strategy as design: the design lens
Strategy can be seen as the result of a design process. Strategy
development is logical, analytical and planned.

The characteristics of seeing strategy development as a design process are

as follows:
• Strategy development is a formal and deliberate process.
• Thinking about strategy, and making strategic choices as an outcome
from this thinking process, precedes the implementation of strategy.
• Strategies are logical and clear.
• Strategic choices are made by senior management. Senior managers are
the strategic decision makers.
Strategy as experience
This is the view that future strategies are based on
experience gained from past strategies. There is strong
influence from the received wisdom and culture within
an organization about how things should be done.

It is similar to incremental strategy. The weakness with

this form of strategic development is strategic drift.
Strategy as ideas

This approach to strategy emphasize innovation

and the need for diversity of ideas in the
organizations. Strategy can emerge from the
way people within the organization handle and
respond to the changing forces present both in
the organization and in the environment.
The characteristics of seeing strategy as ideas as a design process are as
follows:
• Strategic development should rely on radical new ideas. These do
not necessarily come from senior management. Other individuals
within the entity might create the new ideas.
• Innovation happens as a result of variety and diversity. A changing
and diverse environment encourages major innovation.
• Within an entity that encourages new ideas and innovative
thinking, many different ideas compete for the support of
management.
• Innovative thinking is unlikely to happen within an organization
with a traditional hierarchical management structure and formal
lines of authority and responsibility.
Strategy as design Strategy as experience Strategy as ideas

Based on adaptation of past strategies,

Logical and rational process Based on new ideas and innovation
influenced by managers’ experience

Emphasizes importance of variety and

Uses analytical and evaluation techniques Adaptive approach, incremental
diversity

Driven by the taken-for-granted

Most common approach Ideas likely to come from anywhere
assumptions

Top-down approach Adopted by risk averse managers Top managers - creators of the context

Adopted by risk takers in dynamic

Found in conservative organizations For stable and static environments
environments

If environment dynamic, strategic drift Commonly used by innovative

occurs organizations e.g. 3M and Google
Lenses Advantages Disadvantages
Does not encourage lower level
Structured process
participation
Strategy as design Logical, makes sense Rigidity

Many academic models Paralysis by analysis

Managers learn from experience Low on innovation

Strategy as experience Low on logic

Strategic drift

High on creation and innovation Lack of structure

Not all great ideas translate into great
Includes everyone commercial products
Strategy as ideas
Can lead to massive competitive
High risk
advantage
High cost (failure cost)