The largest strategic business management consulting firms agree to focus the definition of management and business strategy on organizational and managerial elements and on profitability performance.
To do this, it is essential for decision-makers to target the failures in order to compensate for these shortcomings. With strategic business analysis tools, solutions to improve competitiveness and productivity and define an effective and sustainable project are within the reach of business leaders.
Here are the five main effective tools used to help maneuver and resolve adverse effects on market positioning.
1. The SWOT method
The SWOT tool assesses strengths and weaknesses, as well as opportunities and threats. We can say that it is a combination of diagnostics, both internal and external to the company. It is used to highlight the FCS to be mastered for optimal competitiveness. It can be used during the creation or development phase of the business.
The advantage of defining objectives following the SWOT analysis is faster and inexpensive to target internal factors to be managed. In addition, it allows a double diagnosis (internal and external) to be carried out with a single tool. The SWOT method will be used in addition to other analyzes for better strategic positioning.
2. The BCG matrix
It is an external analysis tool to position the company in its macroeconomic environment. The representation of the activity portfolio will be evaluated mainly according to two criteria: market growth in relation to the market share relating to the company. The use of this matrix makes it possible to visualize the constant evolution of companies in the same sector in order to remain aligned with the balance of development activities.
Benefits of use
By monitoring market developments and targeting areas for improvement, the diagnosis will simply allow action plans to be organized for the transition to strategic control. The additional advantage of this easy-to-apply tool is that it can be used in combination with other strategic analysis instruments to encourage reflection.
3. The PESTEL method
The six components of this method: political, economic, sociological, technological, environmental, and legal—will effectively highlight the external factors impacting the activity to be analyzed. This tool is often combined with the SWOT method for implementation. It is often called a mobile application.
The PESTEL analysis will facilitate the overall vision and control of the company’s sectoral market by taking into account its six macroeconomic components. It allows managers of SMEs or larger structures to plan for the medium and long term during the creation phase or competitive development campaign.
4. The 5 Forces of PORTER
It is a tool for measuring the negotiating power of customers and suppliers, the threats of new entrants, and substitute products, which will be confronted with the intensity of external competition in order to define the strategic course of action for the deal.
The 5 Forces of Porter are an easy-to-implement tool with the advantages of speed of maneuver to cope with market developments and anticipation of variable factors. It should be noted that a sixth force now comes into play, this is the role of public authorities in the legislative framework of the company’s activities.
5. The PORTER value chain
This method is an internal diagnostic tool for the strategy focused on the company’s own values. There are 2 categories relating to the microeconomic system, such as the analysis of main activities (marketing, sales, supply, etc.) and support activities (purchasing, human resources, etc.).
Depending on the results that emerge, the decision-making capacity will make it possible to regulate anomalies directly at the level of costs, communication positions, and/or could go through a focused niche strategy.
The interests of the value chain lie in its ability to easily detect expenses and values made available within the company to direct an effective action plan and recover the profitability of activities.
The application of several techniques helps streamline the process of developing a strategic analysis. In a company, there are several types of actors who interact in the strategy process:
- Managers participate in the analysis of the results obtained in order to check whether the objectives have been achieved, make the necessary corrections, and ensure the implementation of the processes necessary for the development of relationships with stakeholders.
- Administrative and technical executives also participate in strategic decision-making processes
- Employees are important players in the development of the company. They are the first to implement the strategy defined by the manager
- Business partners participate in the company’s strategic decision-making processes and are involved in its development
- Financial partners will provide support and financial resources necessary for the development of the company
- Suppliers, customers, distributors, and subcontractors are all business partners. They participate in achieving the company’s objectives
- The business partner is an expert who helps the company achieve its objectives. It is therefore important that the company knows the skills of the business partner thanks to the different strategic analysis tools at the micro and macroeconomic levels.
The right to access information is an essential element in managing relations with stakeholders. The company must communicate relevant information to stakeholders using appropriate mechanisms and tools.
The performance of the stakeholder relationship management system is measured using relevant indicators with a view to improving stakeholder satisfaction. The stakeholder relationship management strategy can, for example, be measured using the customer satisfaction indicator.
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