1. Foundation in Business Analysis
Session 2
STRATEGY ANALYSIS
THE BUSINESS ANALYSIS PROCESS MODEL
In first part of our session we will discuss about Strategy analysis and this chapter is about
- Understanding what strategy is and why it is important – the assumption being that strategy is important
- Exploring some ideas about how strategy is developed
- Implementing strategy
Working out what all of this means for business analysts
During second part we will cover Business Analysis Process Model

2. What means “Strategy analysis”?
is what top management does;
is about direction;
sets in motion the important actions necessary to achieve these directions;
is what the organization should be doing. OR
Strategy is the direction and scope of an organization over the long term, which achieves advantage for the organization through its configuration of resources within a changing environment and to fulfill stakeholder expectations
In order for a business analyst to fully add value, they need to understand the strategy of the organization. They must also be able to undertake a review of the key drivers and influences that will impact the future direction of the organization and hence help to shape any proposed solutions and suggestions for change.
The most important aspect about it is that it considers the long term and, in well-ordered organization, should be fairly persistent
The organization makes constant tactical adjustments to its operations, to deal with emergent problems and opportunities, but these should be all the time in the context of a clear long term strategy

3. Business Unit Strategy
Levels of Strategy
Corporate Strategy
Business Unit Strategy
Operational Strategy
Corporate strategy concerned with the overall purpose and scope of the business. Strategies at this level are influenced by investors, governments and global competition, and by the context set out earlier in this chapter. This is the basis of all other strategies and strategic decisions.
Business unit strategy: below the corporate level are the strategic business units (SBUs). Each of these organisational units has a distinct external market, different from those of other SBUs. SBU strategies address choice of products, pricing, customer satisfaction and competitive advantage.
Operational strategy: focusing on the delivery of the corporate and SBU strategies through the effective organisation and development of resources, processes and people.

4. Where does strategy development come from?
Strategy associated with an individual
Decentralized and empowered
Strategies resulting from a formal planning process

5. Strategy Development Innovation climate Introduction of new thinkers
Entrepreneur driven strategy
Ideas lens
Formal planning
Design Lens
Strategy Development
Intrapreneur – individual or group
Experience lens
Innovation climate
Introduction of new thinkers
New CEO
Environment scanning
Rational
Comprehensive analysis
Formal process
Empowerment
Internal entrepreneurs
Formal planning (the design lens) sees strategy resulting from the deliberate positioning of the organization through a detailed and comprehensive analysis and a subsequent directive strategy that is formulated by top management and “pushed down” through the organization.
Intrapreneur driven (the experience lens) occurs where the collective experience of the organization and its culture operate on the existing culture to give it a new form.
Entrepreneur driven (the ideas lens) is the result of an innovative climate or the introduction of new thinkers (often new CEO) or looking at what is happening outside the organization

6. Analyzing the external environment
PESTLE analysis
It covers the external influences in general
Porter’s Five Forces model
It covers the external influences within an industry

7. PESTLE analysis Legal Social Political The company Economical
Technological
Environmental

8. PESTLE analysis Political Economical Social Technological
The influence of political pressures, local, national and global
Political
The effects of the current economic climate, again nationally and internationally
Economical
The ways in which changes in society, or the attitudes of people, could affect the organization
Social
The effects of new and emerging technologies
Technological
The influence of “green” thinking and attitudes
Environmental
The effects of national and international legislation
Legal
It is important when carrying our a PESTLE analysis to focus on external influences and not to be tempted into thinking about what actions might be taken in response to these

9. Porter’s 5 Forces model Industry competitors – rivalry among
existing firms
Threat of new
entrants
Bargaining
power of
buyers
Threat of
substitute
products or
services
suppliers
New entrants may want to move into the market if it looks attractive, and if the barriers to entry are low. Globalization and deregulation both give new entrants this opportunity, but there are barriers to entry that organizations build.

10. External Influence
WHEN limits Supplier power the opportunity for cost reductions?
there is a concentration of suppliers, and supplying businesses are bigger
than the many customers they supply;
the costs of switching from one supplier to another are high because of supply
contracts, interlinking systems with suppliers, supply logistics or the inability of other suppliers to deliver;
the supplier brand is powerful, e.g. the power of ‘Intel Inside’;
customers are fragmented.

11. External Influence
WHEN is high the Customer power – or the ‘bargaining power of buyers’, as Porter called it?
there is a small concentration of buyers and many small organizations in the supplying industry, as for example in the supply of food to supermarkets;
alternative sources of supply are available and easy to find;
the cost of the product or service is high, encouraging the buyer to search out alternatives;
switching costs are low.

12. External Influence WHEN is high the threat from substitute products ?
product substitution from new technologies is more convenient – DVDs for videos, for example;
the need for the product is replaced by a different need;
we decide to ‘do without it’.

13. External Influence WHEN is high the competitive rivalry?
there are many competing firms;
buyers can easily switch from one firm to another;
the market is growing only slowly or not growing at all;
the industry has high fixed costs, and responding to price pressure is difficult;
products are not well differentiated, and so there is little brand loyalty;
the costs of leaving the industry are high.
All of these forces impact on the competitive battleground in some way.

14. Analyzing the internal environment
MOST analysis
It helps to understand a company’s current business strategy and the inherent strengths and weaknesses of the organization
Boston Box
It evaluates the products of an organization according to their market share and to their growth prospects

15. MOST analysis Mission Objectives Strategy Tactics
a statement declaring what business the organization is in, and what it is intending to achieve
Mission
the goals against which the organization's achievements can be measured
Objectives
the approach that is going to be taken by the organization in order to achieve the objectives and mission
Strategy
the detailed means by which the strategy will be implemented
Tactics

16. Resource audit diagram
The company
Physical
Human
Know-how
Reputation
Financial

17. The Boston Box Wild Cat (or Problem Child) Star Dog Cash Cow High
Market growth
A successful product starts as a wild cat and goes clockwise round the model until it dies or is revitalized as a new product, service or SBU
The wild cats or problem children are unprofitable but are investments for the future.
The stars strengthen their position in a growth industry until they become the big profit earners. They are mature products or services, often market leaders, and provide the funding for the other segments of the matrix.
The dogs are businesses that have low market share in markets with low growth.
The cash cows are mature products in well-established markets where they are the market leaders; they are the most profitable products in the portfolio.
Low
Low
Market share
High

18. Organize the results SWOT analysis
It is a means of pulling together the results of the examination of both the external within a company operates and the internal environment

19. SWOT analysis Strengths Weaknesses Opportunities Threats
- Within the organization
Weaknesses
- To be addresses by the organization
Opportunities
- Available to the organization
Threats
- May cause problems for the organization
Internal
External

20. SWOT analysis
It provides a summary of the current situation of the organization, enabling the analyst to consider the following
The opportunities that are available to the organization
The threats that may cause problems or affect the ability of the organization to grasp opportunities
The strengths within the organization that may be harnessed in order to grasp the opportunities
The weaknesses that need to be addressed in order to prevent them undermining the performance of the organization

21. Present the strategy McKinsey 7-S model Balanced business scorecard
It helps to formulate the strategy
It can be an analytical tool to find out what is wrong about the execution of strategy in an organization
Balanced business scorecard
It can be thought of as the strategic balance sheet for an organization, since it captures both the financial and the non-financial components of a strategy.
It therefore shows how the implementation process is working and the effectiveness with which the levers for change are being used

22. McKinsey 7-S model
It can be used to formulate the strategy - implement the strategy
The McKinsey 7-S model supposes that all organisations are made up of seven components. Three are often described as ‘hard’ components – strategy, structure and systems – and four as ‘soft’ – shared values, style, staff and skills.te the strategy

23. McKinsey 7-S model
The structure, which is the basis for building the organization, will change to reflect new needs for specialization and coordination resulting from the new
strategic direction.
Formal and informal systems that supported the old system must change.
The style or culture of the organization will be affected by a new strategic direction. Values, beliefs and norms that developed over time may be swept away.
The way in which staff are recruited, developed and rewarded may change. New strategies may mean relocating people or making them redundant.
Skills or competences acquired in the past may be of less use now. The new strategy may call for new skills.
Shared values are the guiding concepts of the organization, the fundamental ideas that are its basis. Moving from being an ‘engineering first’ company to a ‘customer service first’ company, for example, would change the shared values.
Please repharase

24. Balanced business scorecard
Financial: to succeed financially and have the resources to deliver our strategy, how must we be seen by our stakeholders?
Customer: to achieve our vision, what do we want customers to say about us?
Learning and growth: how will we sustain our ability to change and improve so that we constantly keep ahead of the competition?
Internal business processes: what are the business processes that we must excel at in order to deliver customer value?

25. Foundation in Business Analysis
Session 2
STRATEGY ANALYSIS
THE BUSINESS ANALYSIS PROCESS MODEL
There are many tools and techniques available for the business analyst to use but, because of the nature of business analysis work, an overview framework is useful to place these in context and help you determine the most appropriate technique for each individual situation. In this section we set out a business analysis process model as a framework within which both standard modelling techniques and organisational templates can be used. This approach also incorporates the principles of requirements engineering to highlight best practice when defining system requirements.

26. Problem-Solving Model
One of the requirements of business managers is that business analysts examine the entire business area and take a thoughtful or even creative approach to developing ideas for solutions.
Creative problem-solving is vital in the current business world as, increasingly, organisations need to develop innovative ideas in order to respond to changes in the business environment, including actions from competitors

27. Problem-Solving Model
Mess Finding
Data Finding
Problem Finding
Idea Finding
Solution Finding
Acceptance Finding

28. Problem-Solving Model
Mess Finding
Get information to uncover the complexity of the business situation, the mess
Data Finding
Analyze the concerns , opinions, knowledge and ideas uncovered earlier . Look for data which will quantify the information gained and confirm accuracy
Problem Finding
Analyze the information to uncover the real business problems. Another problem can cause the outset of the project
Idea Finding
Brainstorming mode. Looking to potential solutions to the problems
Solution Finding
Ideas are sorted, evaluated and combined until a workable solution/s
Acceptance Finding
Find ways in which the proposed solutions can be made acceptable to the business stakeholders who must approve, adopt and implement them

29. Business analysis process model
The process model sets out the key stages for a business analysis project, with each stage representing the areas that need to be considered
However, it should be noted that although some projects may require a detailed exploration of all of the stages, other projects may focus on a subset of the model, possibly just one stage.

30. Business analysis process model
Business process modeling
Activity analysis
Gap analysis
Business case development
Options identification
Cost/benefits analysis
Impact analysis
Risk analysis
Business process modeling
Investigation techniques
Requirements engineering
It systems modeling techniques
Stakeholders analysis
Stakeholders perspectives
Business activity modeling
Data finding
Investigation techniques
Rich pictures
Mind maps

31. Thanks you! References:
Business Analysis 2nd edition by Debra Paul (Editor), Donald Yeates (Editor), James Cadle