How does one assess a business strategy? Let me introduce the concept of a strategic analysis. We define strategic analysis as the assessment of an organization's current competitive position and the identification of valuable competitive positions in the future and how to achieve them. So let's unpack this a little bit. First, strategic analysis is done from a generalist perspective. By this I mean, we cross the functional boundaries of the business. We're gonna be talking about marketing and finance. We bring those together in an integrative fashion when trying to understand a business strategy. Furthermore, strategic analysis in my opinion is foundational. And by that I mean we reference first principles primarily coming from economics, but from other disciplines as well. And that strategy ultimately serves as the base by which other activities of the organization flow out of. So if you are coming up with a capital budgeting plan for the organization or a marketing plan, those should be based on the overall strategic plan you have for the organization. Second, we're going to do so by emphasizing this idea of strategic reasoning. We need to think about strategy in the context of the larger market and the larger competitive market that a firm operates in. So consider Apple once again. Apple at the end of the day, was able to introduce the iPod, but did so actually many years after the first introduction of a digital music player. Somewhat lost to history has been the idea that there were many rivals to Apple in this space long before Apple actually introduced their product. So to really understand strategy and when it's successful, we need to understand rivalry and competitive dynamics over time and we need to do so in all of the complexity and uncertainty of the real world that businesses and organizations deal with. Third, our analysis needs to be grounded in analytics and data. We're going to make reference throughout the various modules here to various ways in which you can collect data and use data as way to further your strategic analysis. In particular, we're gonna talk about the strategist toolkit, a variety of different tools and frameworks one can use when analyzing a business strategy. And most importantly, we're gonna talk about ways you can integrate across these various frameworks and tools, understanding when it's more appropriate to apply one tool or framework versus another, and then ultimately how to bring them back together. Now an obvious question is who does strategic analysis? The first response of most people to this question would be well CEO or the President of a company or an organization and that is very true. But there's others as well. Entrepreneurs, small business owners, strategy is important to them as well. And larger organizations, it's not uncommon to see a VP for strategic planning or even a Chief Strategy Officer within those organizations. People who are dedicated to analyzing the strategy for their organizations. For larger, multi business unit companies, you might have general managers each within their own business units, who need to do strategic analysis to advance their particular line of business. But strategy is not limited to just those who're leading organizations. I would argue anyone who wishes to evaluate a strategy needs to understand how to do strategic analysis. This might be investors or financial analysts who are interested in what are the potential financial returns to a business. They would argue it is impossible to do that if you don't have a fundamental understanding of what their strategy is moving forward. What about someone who wants to make recommendations for future strategic actions? Things like management consultants and the like once again, it is fundamental to having an understanding of their business strategy to be able to provide those recommendations. Last but not least, we shouldn't lose sight of other, what we might call secondary stakeholders. These are people who might be affected by an organization or have a stake in an organization, but maybe aren't those direct constituencies you might think about, like employees or customers. This could be anything from an activist group or to government regulators. For them, it is very often necessary and helpful to understand how businesses will react to various stimuli and pressures put on them and to understand what is their strategic intent and how they are thinking about strategy moving forward. So at the end of the day, strategy and strategic analysis, in particular are really tools that are useful to a wide variety of individuals and stakeholders, who are affected by organizations.
