Chapter 4

Insight-Driven Strategic Analysis

All models and frameworks of analysis are inherently flawed; some are nonetheless useful.

—Overheard in the Silicon Valley

In this chapter, we:
  • critically reflect on the process underlying strategic analysis; its purpose and role in sense making and the generation of insight;
  • introduce a typology consisting of a hierarchy of frameworks of strategic analysis based on high-level and supporting-level frameworks of analysis;
  • describe the roles of high-level and supporting-level frameworks of analysis;
  • propose a simple step-by-step approach to conducting an insight-driven strategic analysis;
  • review and discuss the limitations of strategic analysis.

Strategic analysis is about sense making. It is about making sense of those elements in the firm's environment that are relevant to its current and future competitive position. These elements might be external to the firm, such as the emergence of new opportunities or possibly threats. They might also relate to factors internal to the firm, such as its ability to meet those new opportunities or threats. Most often it is a combination of external and internal factors that trigger the need to sense making. To that end, strategic analysis is central to the strategic thinking process a firm needs to engage in on a continual basis in monitoring and nurturing its competitive position.

Clearly, however, in order for strategic analysis to be competitively relevant it needs to be purposeful; the ...

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