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.
The strategic management process has three main components as shown below
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
- Computer Information Systems
- Research and Development
Key External Factors
- 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 involves understanding the nature of stakeholders expectations, identifying the strategic option and evaluating and selecting the best/optimal choice amongst all.
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 g
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.