Business analysis models are useful tools and techniques that can help you understand your organizational environment and think more strategically about your business. Dozens of generic techniques are available, but some come to the forefront more frequently than others do. These include:
- a) SWOT (strengths, weaknesses, opportunities, threats) analysis
- b) PESTLE (political, economic, social, technological, legal and environmental) analysis
- c) scenario planning
- d) Porter’s Five Forces framework
SWOT analysis is one of the most popular strategic analysis models. It involves looking at the strengths and weaknesses of your business’ capabilities, and any opportunities and threats to your business.
Once you identify these, you can assess how to:
- capitalise on your strength
- minimise the effects of your weaknesses
- make the most of any opportunities
- reduce the impact of any threats
This is a technique that builds various plausible views of possible futures for a business.
Critical success factor analysis
This is a technique to identify the areas in which a business must succeed in order to achieve its objectives.
A framework for looking at the strength of five important factors that affect competition – potential entrants, existing competitors, buyers, suppliers and alternative products/services. Using this model, a business can build a strategy to keep ahead of these influences.
The five forces are
(1) Threat of New Entrants,
(2) Threat of Substitute Products or Services,
(3) Bargaining Power of Buyers,
(4) Bargaining Power of Suppliers,
(5) Competitive Rivalry Among Existing Firms. The following is a Five Forces analysis of The Coca-Cola Company in relationship to its Coca-Cola brand.
- Performance Indicators: Performance indicators provide the information that managers need to understand how the organization is performing in relation to its strategic goals and strategic objectives.
- Customer analysis: Segments, motivations, unmet needs
- Competitive analysis: Identify completely, put in strategic groups, evaluate performance, image, their objectives, strategies, culture, cost structure, strengths, weakness
- Market analysis: Overall size, projected growth, profitability, entry barriers, cost structure, distribution system, trends, key success factors
- Environmental analysis: Technological, governmental, economic, cultural, demographic, scenarios, information-need areas Goal: To identify external opportunities, threats, trends, and strategic uncertainties