How does strategic analysis at the corporate level differ from strategic analysis at the business unit level? How are they related?
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Strategic analysis at the corporate level and strategic analysis at the business unit level are both important components of the overall strategic management process. While they share some similarities, they also have distinct differences.
At the corporate level, strategic analysis focuses on the organization as a whole. It involves examining the company's overall mission, vision, and objectives, and identifying the core competencies and resources that can be leveraged across different business units. Corporate-level strategic analysis also involves evaluating the external environment and industry trends, understanding the competitive landscape, and making decisions regarding the organization's portfolio of businesses and the allocation of resources among them.
On the other hand, strategic analysis at the business unit level is more focused and specific. It involves analyzing individual business units or divisions within the organization. Business unit-level strategic analysis includes evaluating the performance of each unit, identifying its strategic strengths and weaknesses, analyzing the industry dynamics specific to that unit, and making decisions regarding market segmentation, differentiation strategies, and resource allocation within the unit.
Despite these differences, strategic analysis at the corporate level and the business unit level are closely related. The corporate-level analysis provides the overall strategic direction and framework for the organization, guiding the decision-making process at the business unit level. The business unit-level analysis, on the other hand, provides insights and recommendations that inform the organization's overall strategy and resource allocation decisions.
To conduct strategic analysis at the corporate level, the following steps can be taken:
1. Define the organization's mission, vision, and objectives.
2. Conduct an internal analysis to identify the organization's core competencies and resources.
3. Analyze the external environment and industry trends.
4. Identify opportunities and threats at the corporate level.
5. Assess the competitive landscape and the organization's position within it.
6. Determine the organization's portfolio of businesses and their fit with the overall strategic direction.
7. Allocate resources among the different business units based on their strategic priorities and potential.
To conduct strategic analysis at the business unit level, the following steps can be taken:
1. Analyze the performance of each business unit.
2. Identify the unit's strategic strengths and weaknesses.
3. Analyze the industry dynamics specific to the business unit.
4. Identify opportunities and threats at the business unit level.
5. Determine the unit's market segmentation and target customer segments.
6. Develop differentiation strategies and value propositions.
7. Allocate resources within the business unit based on its strategic priorities and potential.
By conducting both corporate-level and business unit-level strategic analysis, organizations can develop a comprehensive strategy that aligns the goals and objectives of the entire organization while also considering the unique characteristics and challenges of each individual business unit.