Strategic Analysis and Strategic Management

900 Words4 Pages
Explain why strategic analysis is necessary in the process of developing an appropriate strategy. Identify tools that are available to examine the external environment and discuss how and why they are used. Introduction Strategy is a high level plan in which to achieve one or more goals under conditions of uncertainty. It is very important because resources available to achieve these goals are usually limited. Strategy is often the difference between mediocrity and excellence. Strategies exist at several levels in any organisation as stated above - ranging from the overall business through to individuals working in it. Corporate Strategy- is concerned with the overall purpose of the business to meet…show more content…
Analysing the external environment involves breaking a complex interrelated reality to sets of issues to make the analysis manageable. The main sets of issues are usually: Macro Environment -These are broad trends shaping the national and international environment in terms of Political, Economic, Social, Technological, Environmental, Legal trends. (PESTEL Factors, Key Drivers) Micro Environment – This is the operating environment or industry sector in which the firm competes. It addresses a range of issues such as suppliers, customers, competitive intensity, threat of new entry and substitute products arising. ( FIVE FORCES Analysis) Competitor Analysis – Seeks to understand the rival offers from other firms seeking to serve the same customers and to out manoeuvre their managers with our innovation and competitive moves. Market Analysis – Seeks to evaluate the current needs of today;s customers and the emerging needs of tomorrows customers so new product can be anticipated. These will be different in different market segments. PESTEL is focused on society wide. Which is based on sound research of actual issues. From this it needs to provide evidence from the research to validate points made. P = Political E= Economic S= Social T= Technological E= Environment L= Legal Like the old fashioned SWOT techniques, PESTLE helps us makes lists which
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