Strategy in Practice: A Practitioner's Guide to Strategic Thinking, 3rd Edition

Chapter 4Insight-Driven Strategic Analysis

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

—Anonymous

In this Chapter, We:

• critically reflect on the process underlying rational strategic analysis; its purpose, role, and limitations in sense making and the generation of insight;
• revisit the notions of value creation, capture and delivery, and stakeholder positions in view of their centrality in the strategic thinking process;
• introduce a typology consisting of a hierarchy of frameworks of rational strategic analysis based on high-level and supporting-level 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 all those elements in the firm's competitive environment that are relevant to its current and future competitive position. These elements might be external to the firm; they might relate to the emergence of new opportunities, but they might also relate to potential threats to the firm's current position of competitive advantage. Elements relevant to the firm's competitive position also include factors internal to the firm; specifically, these have to do with the firm's ability and disposition to respond appropriately to changes in its external competitive context. Hence, ...