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10 essential tools for strategy analysis [Updated 2019]

Strategic Analysis is a core step in the Strategic Learning Cycle. Every strategist should have a toolbox of analytical models at his or her disposal.

Having the right tools won't necessarily make you a good mechanic. Nor will having the right strategy analysis tools make you a good strategist. But they will help a good strategist get the job done more effectively.

Here is my list of 10 essential tools for  strategy analysis:

1. SWOT


The SWOT is the most basic form of strategic analysis. Simply list the organisation's Strengths, Weaknesses, Opportunities and Threats. (learn more)

2. Porter's Value Chain


The value chain is a simple (graphical) method for identifying and describing a firm's main functions and understanding how they contribute to value creation. (learn more)

3. The Strategy Canvas


The Strategy Canvas was popularised in the book "Blue Ocean Strategy". It is used to understand how a firm differentiates itself from its competitors. (learn more)

4. The Business Model Canvas


The Business Model Canvas was introduced by Alexander Osterwalder and Yves Pigneur in the book "Business Model Generation". It is a very effective way of describing the key components of a business model. This can be used as the starting point for strategic analysis as well as for exploring alternative business models. (learn more)

5. PESTEL


The PESTEL framework is useful for ensuring that you consider a broad range of possible sources of opportunities and threats. The letters represent the Political, Economic, Social (or Socio-economic), Technological, Environmental and Legal opportunities and threats in the firm's environment. (learn more)

6. McKinsey 7S


The McKinsey 7S is useful for ensuring that you consider all aspects of the organisation when identifying its strengths and weaknesses. The 7 Ses stand for: Structure, Systems, Style, Staff, Skills, Strategy and Shared Values. (learn more)

7. Porter's 5 Forces


Porter's 5 Forces model is another framework for identifying threats and opportunities within the firm's environment. It considers the bargaining position of suppliers and customers (including distributors), the threat of new entrants and substitutes, as well as competitive factors within the industry itself. (learn more)

8. Pareto Analysis


A Pareto Analysis is based on the maxim that 20% of the products, services, customers or distribution deliver 80% of the profits. A Pareto chart is a useful visualisation for showing this. Accuracy, however, depends on the reliability of your cost allocation system. (learn more)

9. BCG Matrix


The BCG Matrix can be applied to any business with more than one product or service line, or more than one customer segment. Plot the market share against the market growth rate for each product, service or customer segment. Then consider strategic options based on their relative position on the chart. (learn more)

10. Scenario Analysis


The future is inherently uncertain. Fortunately, good business strategy only requires you to be able to anticipate the future. You don't need to be able to predict it. Scenario Analysis is a tool to help you to anticipate multiple different futures. This allows you to construct your strategy around the premise that you can't be sure which, if indeed any, of them will come to pass. (learn more)

You can work with all of these tools online in the StratNavApp.com online application. It's free. And if you are working in a team, you can collaborate with your team members in building your strategic models. Click here to get started.

See also:

13 comments:

  1. It was a very good post....will surely subscribe to your blog...eagerly awaiting to read in detail on the given topics..especially McKinsey7-S & Pareto Analysis

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  2. Glad you enjoyed it Chandra. I'll get cracking on the McKinsey 7-S post.

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  3. Chandra, this has taken a lot longer than I had planned, but both the McKinsey 7-S and the Pareto Analysis posts are now available from the learn more links in the main text.

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  4. Great post! My company uses all 6-strategy analysis tools in various business circumstances. You did a superb job summarizing into a clear format for folks to follow. Thank you for sharing your insight and look forward to your future sharing.

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  5. Thanks Annie. It would be great to hear more about how your company uses these tools, and any tips, tricks or experiences you are able to share.

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  6. Thank you so much for your greatly helpful blog :) I really appreciate it and keep doing your excellent job :)

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    1. Glad you liked it Luisa - and thanks for the feedback.

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  7. Chris

    Thank you for the excellent writeup. gives a wonderful perspective to students & strategic planners alike. loved it

    Pankaj Joshi

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    1. Thank you for the feedback Pankaj, and I am very glad you loved the post.
      Chris

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  8. I'm so glad I could get this done.. I'm conducting a research work on strategic analysis and this is well simplified.. Great job

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    1. Thanks Alfred. When is your research likely to conclude? I would love to have sight of the result? (Perhaps you could drop me a note at http://www.chriscfox.com/Home/Contact)
      Chris

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