1. The Strategy Formulation Process
Chapter 8
Strategic Assessment:
General Principles
(c) Macmillan & Tampoe 2001

2. Purpose of Strategic Assessment
Anchors future strategies in reality
Relates strategic intent to the present
Address both external and internal aspects of context
Combine analysis with judgement
(c) Macmillan & Tampoe 2001

3. Analysis Vs. Assessment
Assessment is more than analysis
Assessment focuses on testing decisions for validity in practice
Analysis gives undue weight to what can be measured
Assessment takes almost equal notice of quantitative and qualitative data
Good assessment should give a balanced understanding of the context
(c) Macmillan & Tampoe 2001

4. Key Elements of Assessment Process
External analysis
Internal analysis
Strategic intent
Operational results
Strategic choice
(c) Macmillan & Tampoe 2001

5. Figure 8.1 Factors likely to influence Strategic Assessment
External Analysis
Business Environment, Industry,
Competitors &
Threats and Opportunities
Strategic Intent
Strategic
Assessment
Strategic
Choice
Trigger
Results
Internal Analysis
Resources, Capabilities
& Competencies
Strengths and Weaknesses
Operational Results
(c) Macmillan & Tampoe 2001

6. Figure 8.2 Reconsidering Strategies
Strategy
Trigger
Strategic Cycle
Review
Results
Action
Operational Cycle
(c) Macmillan & Tampoe 2001

7. Questions for Strategic Assessment to address
What are our chances of survival if we continue as we are?
What are the best opportunities for growth given our existing capabilities?
What are our competitive advantages and disadvantages?
Where can we invest to improve our capabilities most efficiently?
What changes can we realistically implement?
(c) Macmillan & Tampoe 2001

8. Selecting analytical tools
Vast range of tools available
Usually use several tools but choice is important
Choice depends on:
Data available
Nature of issues to be resolved
Time and skills available
(c) Macmillan & Tampoe 2001

9. Figure 8.3 Techniques in use in strategic planning processes
Technique % Using
Core competencies analysis 72
Scenario Planning 69
Benchmarking
Total Quality Management 44
Shareholder Value Analysis 44
Value Chain Analysis 44
Business Process Redesign 33
Time-based Competition 25
Adapted from: Wilson, I. “Strategic Planning Isn’t Dead - it changed” Long Range Planning 1994
(c) Macmillan & Tampoe 2001

10. Assessing competitive advantage
Cost-based advantage
Differentiation advantage
First mover advantage
Time-based advantage
Technology-based advantage
Corporate advantage
(c) Macmillan & Tampoe 2001

11. Figure 8.4 The Triangle of Corporate Strategy
Competitive
Advantage
Businesses
Resources
Vision
Goals & Objectives
1. Competitve Advantage: Do the resources convey or substantiate competitive advantage in the businesses?
Does participation in the businesses help upgrade the resources?
2. Coordination Is the infrastructure in place to enable a
firm’s resources to be effectively deployed in its businesses?
3. Control Can the individual businesses be effectively monitored and controlled under the corporate infrastructure?
Organization. Systems, Processes
Coordination
Control
Adapted from: Collis, D.J. & Montgomery, C.A. “Creating Corporate Advantage” HBR 98303
(c) Macmillan & Tampoe 2001

12. Figure 8.5 Successful enterprises tend to
make coherent choices
Enterprise A
Enterprise B
Enterprise C
Nature of Resources
Scope of Business
Co-ordination Mechanisms
Control Systems
Corporate office size
general
specialised
wide
narrow
transferring
sharing
financial
operating
small
large
Note: There is no one right answer.
Adapted from: Collis, D.J. & Montgomery, C.A. “Creating Corporate Advantage” HBR 98303
(c) Macmillan & Tampoe 2001

13. Figure 8.6 The SWOT diagram may summarise the results of analyses
Internal
Analyses
Strengths
Weaknesses
Opportunities
Threats
External
Analyses
(c) Macmillan & Tampoe 2001

14. Strategic Assessment of a business as a whole
Questions
What business are we really in?
What real customer needs do we satisfy?
What problem do we solve for our customers?
(c) Macmillan & Tampoe 2001