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Strategic Analysis and Choice

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 involves a number of steps.
Strategic implementation is the penultimate stage of strategic management and strategic analysis and choice are two significant constituents of that process.The strategy of a company refers to its all-inclusive plan or program for the purpose of accomplishing its aims and targets in the long run.

Different types of strategies include business unit strategy, corporate strategy, operational strategy and others. Strategic analysis implies the examination of the present condition of a business and consequently developing an appropriate business strategy.

Strategic analysis carries higher importance with regards to conglomerates that offer a wide range of diversified products. Strategic choice refers to the selection of the appropriate business strategy.
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.
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

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 goals


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Last Updated on : 8th July 2013

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