Critically Evaluate Two Approches Used During the Strategic Analysis Process

3858 Words Mar 17th, 2013 16 Pages
1. Introduction

It is known that nowadays it is not enough to have an idea and money to start a business to run. Even harder is to develop already existing project. Currently, as practically in every industry there is a huge competition, so must be carry out a market analysis before proceeding to any movement. The analysis must be conducted in a fair manner and give to meaningful results that will take the right decision for the future. Many schools give a lot of methods of market analysis. In addition to the well-known SWAT and PEST analysis, there are many other approaches such as Value Chain Analysis, Porters Five forces, Core Competencies and Stakeholder Mapping that may be useful.

This work will present two approaches of
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This allows helps to extract individual sectors through which the product is going and to determine their attractiveness. In addition, it can specify the value added at each stage, and on the basis of the profitability of the industry. Audited company can operate simultaneously in several components of the economic path, achieving gains in individual sectors. In this situation, the company is integrated or otherwise vertically diversified (S. Overbeck, 2009).

The great examples are the furniture companies such as IKEA, which often starting from product design, then produce simple components that are distributed and sold through its own chain of stores, where they migrate to the client, where they can also be assembled for him at home by company (H. Bidgol, 2004). Sample of that process shows on appendix 1.

Each company makes a series of steps to produce a product or service. These activities begin with the purchase of raw materials, through processing, and end on the final product. These activities are called basic functions.

For properly carried out basic functions are also needed management and advisory activities, which was named auxiliary functions. Combination of basic and auxiliary functions of companies and value chains of suppliers and customers will grow business and allows generating profits.

The basic functions of the company are the activities of preproduction, production and sale. Auxiliary
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