The document discusses the importance of strategic business analysis in modern organizations, emphasizing its role in navigating the dynamic business environment and aligning strategies with long-term objectives. It outlines various definitions of strategy, particularly focusing on Peter Drucker's and Johnson, Scholes, and Whittington's perspectives, highlighting elements such as organized activities, adaptability, and resource configuration. Additionally, it covers the scope of strategic decision-making, exemplified by a company's shift towards renewable energy and the long-term implications for resource allocation and organizational values.

1. Strategic
Business
Analysis
AE2441
Instructor: Benj Jamieson J. Duag, LPT

2. CHAPTER 1:
THE PURPOSE

3. SBA
Strategic business analysis in modern day
business is hard to separate from strategic
management and planning where management
have to battle with the ever changing business
environment. Strategic business analysis depicts
the role of strategy in business.

5. ACTIVITY
Based from the given drawing/illustration
write a brief idea about what is the purpose of
strategic and business analysis.

7. What is
Strategy ?
BUSINESS
ANALYSIS

8. Strategy can be defined in a number of
different ways. We should be aware that every
definition is likely to be engrained within the
different outlooks adopted by its authors. For
this reason a definition of strategy, which is
accepted by everyone, is not as
straightforward as
Strategy

9. According to
Peter
Drucker,
a strategy is a pattern of activities that seek to
achieve the objectives of the organization and adapt
its scope, resources and operations to environmental
changes in the long term. Drucker recognized that
any company’s strategy had to incorporate the
answers to four questions/conditions.

10. Question
1
What opportunities it wants to
pursue and what risks it is willing
and able to accept?

11. Question
2
The scope and structure of its
strategy, including the right
balance among such aspects
specialization, diversification, and
integration.

12. Question
3
Acceptable trade-offs between
time and money and between in-
house execution versus using a
merger, acquisition, or joint
venture or some external means to

13. Question
4
The organizational structure
appropriate to its economic
realities, the opportunities, and it
performance expectations.

14. Definition
Strategy is by the
numbers.

15. Elements
Drucker also emphasized that a strategy contains several
elements:
1. A strategy consists of organized activities.
2. The purpose of these activities (the strategy) is to achieve an
objective.
3. Strategy is long-term. Formal strategic planning by large
companies, for example, might cover five years or ten years into
the future, and for some companies even longer.

16. Elements
4. The strategic choices that an enterprise makes are strongly
influenced by the environment in which the enterprise exists.
5. The environment is continually changing, which means that
strategies cannot be rigid and unchanging.
6. Strategies involve an enterprise in doing different things with
different resources over time, as it is forced to adapt to changes
in its environment.

17. Definition
Johnson, Scholes and Whittington defined
strategy as “the direction and scope of an
organization over the long term, which
achieves advantage in a changing
environment through its configuration of
resources and competencies with the aim of
fulfilling stakeholder expectations.”

18. Scope of
Strategic
Decision
Deciding the scope of the entity’s
activities.
What businesses should we be in?

19. Scope of
Strategic
Decision
Relating the activities of the entity
to the environment in which it
operates

20. Scope of
Strategic
Decision
Ensuring that the entity has the resource
capacity to operate in its selected areas of
activity.

21. Scope of
Strategic
Decision
Allocating resources to the
different business activities

22. Scope of
Strategic
Decision
Providing a high-level (strategic)
framework for more detailed
decision-making at an operational
level.

23. Scope of
Strategic
Decision
Reflecting the values and
expectations of the individuals in
positions of power within the
entity.

24. Scope of
Strategic
Decision
Deciding the long-term direction
that the entity should take.

25. Scope of
Strategic
Decision
Implementing change within the
entity so that it adapts successfully
to its changing environment.

26. Example
A company that extracts and supplies oil
and natural gas is considering its future
business direction over the next 10 years. It
is aware that these resources are in limited
supply, and that there is growing public and
political concern about the environment.

27. Strategic
Decision
The company will continue to extract oil and
natural gas, but it will also invest heavily in
production of energy from renewable
energy sources, such as wind and sea.

28. Strategic
Decision
The move into energy from renewable
sources recognizes the probability that
public and political pressure will grow for
restrictions on the use of nonrenewable
energy sources and for protection of the
global environment.

29. Strategic
Decision
A decision must be made about how many
resources (including money) should
be invested in each business activity.

30. Strategic
Decision
This will depend partly on the strategic vision of the
board of directors, and the direction they think the
company should be taking. What proportion if its
total energy sources in ten years time will come from
wind and wave power, and to what extent will the
company still be relying on oil and natural gas?

31. Strategic
Decision
The strategic plan also reflects the values of
the board of directors. In this
example, the company has not included
nuclear power in its strategic plan.

32. Strategic business analysis are those actions and decisions
made by management while trying to understand the
impact of strategic events like: introduction or
development of new product line, setting up a factory in a
new location, employing key staff, selecting organizational
structure, investing in new technology, managing risks,
complying with relevant laws and regulations,
implementing changes, etc.
Strategic Business
Analysis

33. Characteristics
Long term in nature: for any business analysis to be
strategic in nature, it must have a long term view.
When designing a balanced scorecard for example,
management should think of the impact that each
target and objectives that is contained in the strategic
map will do to the long run survival of the company.

34. Characteristics
Focus on external events and activities: senior
managers spend about 60% of their time gathering
and interpreting information from outside source
which will significantly improve decision making
process. They interact with people and organizations
outside the entity in order to achieve this goal.

35. Characteristics
Place more emphasis on qualitative matters: in as much as
financial indicators play vital role in shaping the fortune a
business entity, attention should also be given to those
qualitative factors that an establishment cannot afford to ignore,
else, business failure will imminent. A qualitative emphasis
means that detailed calculations and manipulation of figures are
unnecessary. All that is needed is the big picture.

36. FUTUR
E
PLANS!
Synthesize a local
business you desire and
list at least 5 long term
strategy you want to
make.
A ssig n me n t !

37. THAN
K YOU
Prepared by: Benj Jamieson J. Duag,
LPT