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What are the key components in a strategic analysis?

Strategy can be defined as the determination of the basic long-term goals and objectives of an enterprise and the adaptation of courses of action and the allocation of resources necessary for carrying out those goals. This is concerned with the analysis of business position i.e., both internal and external factors that may influence a business. It a long-term process.


Key Components in strategic analysis are:

  1. Goals, Vision and Mission of the enterprise
  2. Recourses
  3. Environment – Both internal and external to the enterprise


  1. Vision – Visions describes the direction of an organization. Vision creates a picture of organization’s future. And a well-defined, meaningful and a challenging vision will help the members of the organization to be more effective and move in common direction.


  1. Key Goals – This specify the work that needs to be accomplished so as to move towards the fulfilment of the vision of an organization. These are the goal against which the organization’s achievements can be measured.


  1. Mission – Mission is a statement to define what business the organization is in, the reason of the existence of an organization. It identity by answering the question “Who are We?”


  1. Resources – Resources are assets that the organization needs to operate the business. The resources can be tangible (such as plants and machinery, financials, locations, human resources – employees and their skills and motivation) or intangible (such as technology – patents and copyrights, brand value and reputation).


  1. this includes the resources that we need to achieve the goal or to make strategies. This is also an important factor, as it according to this we make plans for the process. Resources can be tangible or intangible. Tangible resources are like financial resource or physical asset and intangible resources are like technology or reputation of a company or brand recognition, Intangible resources are not visible but more important than intangible resource.


  1. Internal Environmental Analysis – is done to evaluate the firm’s financials and human resources, technological capabilities, the capabilities of its personnel and their performance, etc. This can be done through:


  1. SWOT Analysis – A technique for summarizing the key issues arising from an assessment of a business internal position and external environmental influence (SWOT = Strengths, Weaknesses, Opportunities, Threats). Strengths and Weaknesses are internal to an organization and are somewhat controllable while Opportunities and Threats are external to the organization and majorly uncontrollable.
  2. Most Analysis – This technique is used to analyse what an organisation wants to achieve through Mission statement and Objectives and how it wants to achieve this through Strategy and Tactics.


  1. External Environmental Analysis – Evaluate the external environment that is the economy, competition, political-legal environment, etc. Following are the techniques to do external environment analysis:
    1. PESTLE Analysis – This is the strategic framework adopted by organizations to understand the wider environment in which the business operates and evaluate various threats and opportunities posed by an external environment and mechanisms to deal with them. P = Political, E = Economic, S = Social, T = Technological, L = Legal, E = Environmental
    2. Porter’s Five Force Model – is a model to identify the forces which affect the level of competition in an industry.
      • Rivalry among Existing Competitors
      • Threat of New Entrants
      • Threat of Substitutes
      • Bargaining power of Suppliers
      • Bargaining power of Customers

By studying these forces, the companies can understand where the power lies, identify areas of strength, improve on weaknesses and avoid mistakes.

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