Strategic analysis is the process of gathering data that helps our clients decide on priorities and goals, shaping (or shifting) a long-term strategy for their interests. It gives a client the ability to understand its environment and formulate a strategic plan accordingly. Strategic analysis is paramount in any organization because it provides the context and backbone upon which the strategy and overall position of any project is formulated.
To remain adaptable in a changing business or political environment—whether the changes are due to a growing number of employees, new government regulations, or anything else—it’s advisable to conduct a strategic analysis periodically. Organizations that are part of fast-changing industries should conduct this exercise more frequently than those that are not.
At IEG we use several methodologies available to help guide you through the process of collecting and analysing relevant data for strategy planning. Two of the most used methods are SWOT and PESTLE.
A SWOT analysis (which stands for strengths, weaknesses, opportunities, and threats) helps organizations identify where they’re doing well and where they can improve, both from an internal and external perspective. Strengths and weaknesses are considered internal factors, and opportunities and threats are considered external.
A PESTLE analysis focuses entirely on external factors in the political, economic, social, technological, environmental, and legal realms that your organization can’t control but should prepare for. Such an analysis might call attention to things like changing tax legislation, new laws or legal procedures, fluctuating interest rates, etc. Any change that might occur and would have a material impact on your business should be considered in your strategy planning.
Many organizations do both a SWOT and PESTLE analysis to get a complete picture of the existing environment. Your entire leadership team should be heavily involved in these analysis sessions, as should any other personnel who can bring relevant data points or perspectives to the table.