Strategic analysis tools are beneficial to this is for so many reasons. Such as go development, project status, and the business status. There are several different types of strategic analysis. A lot of them will show the same information and some of them will show different information. That’s why it’s important to find an even balance. That way all of the information is seen. The two that seem to fit that bill are the SWOT and the VMOST. The SWOT is more internal/external and the VMOST is mostly external. Let’s dive in to some more.
Strategic Analysis in Business
Strategic analysis tools can provide valuable information for businesses. These tools are what help businesses be successful. They cover a wide range of areas within the business. Not only that, but they can also be used for future planning of the business. A strategic analysis tool box would be a very good to have. There are several different forms of the strategic analysis. Such as SWOT, SOAR, and PORTER’S FIVE FACTORS. SWOT and PORTER’S FIVE FACTORS are two that stand out to most crowds. Let’s explore them more in the following paragraphs.
A SWOT analysis is one of the most popular forms of strategic analysis. SWOT stands for strength, weaknesses, opportunities, and threats. There are several ways that to use a SWOT analysis. One way it is used is to perform a spot check. SWOT will provide focus on the current state of the project, and provide some details of what could be holding it back. Another way SWOT is helpful is it provides a framework for reviewing current strategies and directions of a business internally and externally. When using the SWOT analysis it is required to provide strengths and weaknesses of the business or project. This is an excellent way for business leaders to evaluate problems and challenges with in their business or a project. Once weaknesses or even threats are identified within the SWOT analysis business leaders can develop a plan to better remove those weaknesses and threats. Now this all stands for internally and externally. (Berry, 2018)
Pros of a SWOT
The SWOT analysis is extremely popular because it’s no cost and very simple. Anyone can perform SWOT due to its simplicity. There is no specific training required or consultant to be hired. It’s as simple as writing down your strengths, weaknesses, opportunities, threats, and then assessing them. Factor identification is another big pro to SWOT analysis. There are so many factors that are covered in the SWOT analysis that it makes it very simple for organizations and individuals to be able to see what is going on internally and externally. Also, it is always a good idea as there are so many factors that are covered in the SWOT analysis. It makes it very simple for organizations and individuals to be able to see what is going on internally and externally. Also, it is always a good idea to have a clear understanding of what the threats and weaknesses are within the business. This way business can always be watching out for those threats and trying to improve those weaknesses. (Samson, 2018)
Cons of a SWOT
Everything has a positive and a negative. The negative side of the SWOT analysis is that it does not have a way to be weighed. This could be come confusing to business leaders or project managers, because there is no way to determine how significant one item is from another on the list made. The other downside to the SWOT analysis is it does not prep you to create goals. To perform a proper SWOT it is required to list the strengths, weaknesses, opportunities, and threats of the business or project. However, what is to be done after those are listed? Typically, once everything is identified it would be a good idea to develop goals to overcome some of the items on the list. SWOT does know it would be a good idea to develop goals to overcome some of the items on the list. The SWOT analysis does not prep for this. Therefore, it can be misleading. (Symes, 2017)
PORTER’S FIVE FACTORS
Porters Five Factors is an analysis model that identifies why different industries are able to obtain a different level of probability. The five factors are competition in the industry, potential of new entrance into the industry, power of suppliers, power of customers, and threat of substitute products. Porters Five Factors benefits the organization because it analyzes important internal and external factors. For example, in any given industry it’s important to know the power of the suppliers and the power of the customers. This will allow for the organization to determine the challenges or opportunities that there could be in their industry. When this information is known a game plan can be made to give them the competitive advantage over the others. Porters Five Factors evaluates important parts of the market to help gain competitive advantage, such as the entrance of new competition, power of suppliers and customers, and the threat of more products. (Staff, 2017)
Porters Five Factor analysis model is very detailed and digs deep into analyzing industries and their competitors. This is very good for organizations because it’s important for them to know what the competition in their industry looks like. (M)
The biggest downside Porters Five Factor model is it is very dated. It was developed in the 1980s and has not been revised. This is a negative because several industries have changed dramatically since the 1980s and along with the way they are evaluated. This is it to say it won’t give accurate information though (M)
In conclusion, a SWOT analysis and Porters Five Factor model are both fantastic tools. Not only do these strategic analysis help to evaluate an organizational project. They also have many other benefits. For example, both tools can be used for problem solving, goal setting, creating challenges, making improvements, and determine competitive advantages though the whole organization. These are power tools and every organization should use them.
Berry, T., (2018, July 20). What Is a SWOT Analysis? Retrieved August 20, 2018, from: https://myeducationmanager.tradepub.com/c/pubRD.mpl?secure=1&sr=oc&_t=oc:&qf=w_monc01
Samson, R. (2018, July 08). The advantages and disadvantages of SWOT analysis. Retrieved August 20, 2018, from: https://myeducationmanager.tradepub.com/c/pubRD.mpl?secure=1&sr=oc&_t=oc:&qf=w_make26
Symes, S. (2017, November 21). The Disadvantages of Using SWOT Analysis. Retrieved August 20, 2018, from https://myeducationmanager.tradepub.com/c/pubRD.mpl?secure=1&sr=oc&_t=oc:&qf=w_anda02
Staff, I. (2017, November 20). Porter’s 5 Forces. Retrieved August 20, 2018, from: https://myeducationmanager.tradepub.com/c/pubRD.mpl?secure=1&sr=oc&_t=oc:&qf=w_dava03
Agnelo, M. (n.d.). Advantages and Disadvantages. Retrieved August 20, 2018, from: https://myeducationmanager.tradepub.com/c/pubRD.mpl?secure=1&sr=oc&_t=oc:&qf=w_mini02