Strategic advantage analysis looks at positive points that differentiate our business from competitors. This may be brand, a particular blue-chip supplier locked into long-term contract with us, geographic location, intellectual property and so on.
Strategic advantage analysis would look what unique strengths the company has, and whether these strength are likely to be sustainable, that is long-term.
For example, ownership of more sophisticated equipment than competitors have is not a STRATEGIC advantage, because competitors can buy this equipment tomorrow.
Whereas unique brand message or a patented technology is something that is difficult to replicate and therefore constitutes not only short-term, but also strategic competitive advantage.
Strategic analysis is about looking at what is happening outside your organisation now and in the future. It asks two questions:
- How might what’s happening affect you?
- What would be your response to likely changes?
It’s called strategic because it’s high level, about the longer term, and about your whole organisation.
It’s called analysis because it’s about breaking something that’s big and complex down into more manageable chunks.
The focus is external because factors outside your organisation have a powerful influence on it. Increasingly organisations appreciate that they can learn to manage their response to those influences, rather than assume there is nothing they can do.
It’s part of the overarching process of strategic planning. Strategic analysis boosts organisational effectivenessStrategic analysis helps to:
- Anticipate what might happen
- Evaluate how likely it is to happen
- Prepare for it happening
Strategic analysis will lead to clearer more relevant goals, better quality decisions, and a more secure future as you are better prepared for what will happen.
Otherwise known as “external environmental analysis” it is a key step in strategic planning. It is the link between getting your overall direction right and making the right decisions. You will make better decisions if you understand the influences from the outside world to which you might have to respond in the future.
Many funders are reassured by strategic analysis because they know that organisations that are well prepared for their future are more likely to use grants, donations and loans to greatest advantage and to maximise the difference their organisation makes.
The cost of not doing at least a small amount of strategic analysis means missed opportunities (some call this ‘opportunity cost’ – the cost of not doing something). If you don’t do strategic analysis you risk being left behind, missing opportunities for beneficiaries.