Strategic Analysis & Choice & Implementation

22/05/2020 1 By indiafreenotes

Strategy analysis and choice focuses on generating and evaluating alternative strategies, as well as on selecting strategies to pursue. Strategy analysis and choice seeks to determine alternative courses of action that could best enable the firm to achieve its mission and objectives.

The firm’s present strategies, objectives, and mission together with the external and internal audit information, provide a basis for generating and evaluating feasible alternative strategies. The alternative strategies represent incremental steps that move the firm from its current position to a desired future state.

Alternative strategies are derived from the firm’s vision, mission, objectives, external audit, and internal audit and are consistent with past strategies that have worked well. The strategic analysis discusses the analytical techniques in two stages i.e. techniques applicable at corporate level and then techniques used for business-level strategies.

The techniques that have been discussed for the corporate level include BCG matrix, GE nine-cell planning grid, Hofer’s matrix and Shell Directional Policy Matrix and the techniques for business- level include SWOT analysis, experience curve analysis, grand strategy selection matrix, grand strategy clusters.

The judgmental factors constitute the other aspect on the basis of which strategic choice is made.

As environment changes, companies need to change their strategies to adapt to the environment not only to prosper but also to survive. Based on the multiple strategic choices, each choice is analyze and the best one is selected and implemented.

Strategic analysis and choice are two important components of the implementation stage of the strategic management plan. These two components are crucial links in the strategic management implementation procedure.

Strategic analysis is all about analyzing the strength of businesses’ position and understanding the important external factors that may influence that position. Factors Taken into Consideration for Strategic Analysis and Choice

Key Internal Factors

  • Marketing
  • Management
  • Operations/Production
  • Accounting/Finance
  • Computer Information Systems
  • Research and Development

Key External Factors

  • Political/Governmental/Legal
  • Economy
  • Technological
  • Social/Demographic/Cultural/Environmental
  • Competitive

Techniques Used in Strategic Analysis

The following devices or techniques are used in the procedure of strategic analysis:

  • Five Forces Analysis
  • PEST Analysis (Political, Economic, Social and Technological Analysis)
  • Market segmentation
  • Scenario planning
  • Competitor analysis
  • Directional policy matrix
  • SWOT Analysis (Strength, Weaknesses, Opportunities, and Threats Analysis)
  • Critical Success Factor Analysis

Strategic choice

Strategic choice involves understanding the nature of stakeholders expectations, identifying the strategic option and evaluating and selecting the best/optimal choice amongst all.

Strategic implementation

Strategic implementation is the penultimate stage of strategic management and strategic analysis and choice are two significant constituents of that process.

Characteristics of Strategic Analysis and Choice

Following are the features of strategic analysis and choice:

  • Establishment of long term goals
  • Producing strategy options
  • Choosing strategies to act on
  • Selecting the best option and accomplishing mission and goal

At the time of performing strategic analysis and arriving at strategic choices, long term goals are fixed and different types of strategies are chosen that are most appropriate for the mission of the company and the variable conditions.

Strategic analysis and choice of strategies are done with the help of a number of techniques. If the appropriate strategy is chosen, a company would become more efficient to establish sustainability in competitive advantage and maximize firm valuation.