What is good business strategy and how do analysts improve it?

What is good business strategy and how do analysts improve it?

As we’ve covered in the previous blogs on business analysts and their roles, the foremost goal is to recommend solutions for business needs. Whether the business has a problem or an opportunity, there needs to be an underlying strategy which the business analyst builds. Here, we cover what those strategies entail and how they are devised.

What is a Business Strategy?

In general, the core concept of a business strategy is how to achieve the long-term aims and goals of an organisation. Within the strategy, however, there are a significant number of core concepts that must be considered based on the context of the analysis. These concepts are:

1. What goals the business is trying to achieve?
2. What strategies are currently in place to achieve these goals?
3. What markets the business is in or looking to be in?
4. What contributions will be used to achieve these results?

Historically, strategies were formed around these questions following a strict and rigid process within high levels of an organisation. The process often ignored many stakeholders and created a divide between planning and implementation. When a whole organisation is responsible for the effective implementation of strategy, only a small group cannot make decisions in a vacuum.

Business Analysis is far more adaptable while building on the knowledge and processes that have been developed for over 50 years. Now, let’s look at the general process for assessing business strategy.

How is a strategy developed?

First and foremost, the context of the business and its objectives must be assessed. As you can see in the figure, the business problem or opportunity is considered within the scope of many other elements. This process is often an outside-in path, starting with the most external factors and working inwards towards the problem/opportunity. In doing this, the analyst can build a context within the narrowest possible field for the most accurate solution.

A significant part of the strategy development at this stage involves a PEST analysis. The analyst will consider the Political, Economic, Social, and Technological context of the business needs. These elements will be considered heavily around relevant issues for the organisation, ongoing trends, likely outcomes, and how factors would affect potential solutions. Porter’s Five Forces Analysis is also used (and adapted as necessary for the digital age) which looks at the attractiveness of an industry for operation and is used for building strategy and planning products.

From here, the analyst will consider the actual changes which are to occur and a range of internal elements. These focus on what strategies the company has previously employed, the business model the organisation is built around, and the policies, guidelines, or templates the organisation relies on. These considerations will help to further determine what strategy should be employed by the analyst and which solution fits best within the organisation and strategy.

How is this strategy kept relevant?

A significant factor of any strategy is ensuring it can be used long term, especially in the rapidly evolving digital world. To achieve this, the analyst will ensure that ongoing trends are constantly assessed, and industry reports considered regularly. Often, analysts will look at 3rd party reports who specialise in this information and then apply it directly within the context of the organisation to which they are providing analysis.

Overall, Business Analysts are an extremely important part of the digital economy and should be considered for every business. Their ability to be a neutral assessor, recommend strong solutions, and provide focus and direction for a business is a huge assistance in the digital age.