Industry and Competitive Analysis
Industry and Competitive Analysis
Analysis is the critical starting point of strategic thinking. Kenichi Ohmae Awareness of the environment is not a special project to be undertaken only when warning of change becomes deafening ...
Kenneth R. Andrews
Crafting strategy is an analysis-driven exercise, not an activity where managers can succeed by sheer effort and creativity. Judgments about what strategy to pursue should ideally be grounded in a probing assessment of a company's external environment and internal situation. Unless a company's strategy is well-matched to the full range of external and internal situational considerations, its suitability is suspect.
THE ROLE OF SITUATION ANALYSIS IN STRATEGY-MAKING
While the phrase situation analysis tends to conjure up images of collecting reams of data and developing all sorts of facts and figures, such impressions don't apply here. From a strategy-making standpoint, the purpose of situation analysis is to determine the features in a company's internal/external environment that will most directly affect its strategic options and opportunities. The effort concentrates on generating solid answers to a well-defined set of strategic questions, then using these answers first to form an understandable picture of the company's strategic situation and second to identify what its realistic strategic options are. In studying the methods of strategic situation analysis, it is customary to begin with single-business companies instead of diversified enterprises. This is because strategic analysis of diversified companies draws on many of the
3 I Industry and Competitive Analysis
57
concepts and techniques used in evaluating the strategic situations of singlebusiness companies. In single-business strategic analysis, the two biggest situational considerations are (1) industry and competitive conditions (the heart of a single-business company's "external environment") and (2) the company's own internal situation
Analysis is the critical starting point of strategic thinking. Kenichi Ohmae Awareness of the environment is not a special project to be undertaken only when warning of change becomes deafening ...
Kenneth R. Andrews
Crafting strategy is an analysis-driven exercise, not an activity where managers can succeed by sheer effort and creativity. Judgments about what strategy to pursue should ideally be grounded in a probing assessment of a company's external environment and internal situation. Unless a company's strategy is well-matched to the full range of external and internal situational considerations, its suitability is suspect.
THE ROLE OF SITUATION ANALYSIS IN STRATEGY-MAKING
While the phrase situation analysis tends to conjure up images of collecting reams of data and developing all sorts of facts and figures, such impressions don't apply here. From a strategy-making standpoint, the purpose of situation analysis is to determine the features in a company's internal/external environment that will most directly affect its strategic options and opportunities. The effort concentrates on generating solid answers to a well-defined set of strategic questions, then using these answers first to form an understandable picture of the company's strategic situation and second to identify what its realistic strategic options are. In studying the methods of strategic situation analysis, it is customary to begin with single-business companies instead of diversified enterprises. This is because strategic analysis of diversified companies draws on many of the
3 I Industry and Competitive Analysis
57
concepts and techniques used in evaluating the strategic situations of singlebusiness companies. In single-business strategic analysis, the two biggest situational considerations are (1) industry and competitive conditions (the heart of a single-business company's "external environment") and (2) the company's own internal situation