Strategic analysis tools

the tools that contribute to the cycle of analysis:

1. Strategic drivers: here we need tools to identify the strategic forces that are bearing upon our business. 2. Value analysis: at the next level we need to understand the way in which value is delivered in our industry, and in our business. 3. Business modelling: as we move towards operational considerations we must understand how the business works and, if at all possible, the extent and the quality of the information that it is working with. 4. Portfolio management: this gives us a simple but very effective overview of the benefits that will be delivered to the business, with risks and timescales. 5. Implementation: finally we need tools to assist in the planning of implementation.

(Chart on pg no 132) SWOT ANALYSIS Strength Weakness Opportunities and Threat Analysis. 1. Srength And Weaknesses :The internal view of the business is concerned with what is being done well, and what is being done badly, also, with strong capabilities and relevant resources, and those that are absent. **

Critical Success Factor analysis (CSFs) (Strategic drivers: How shall we get there?)
Critical success factors are those things that must go right if strategic objectives are to be achieved.

An example From each of the general strategic objectives that are agreed, specific critical success factors can be developed. For example, in the case of a petroleum company that wishes to be a leading retailer of petroleum products and aims to share the rewards with shareholders, employees and customers, it might have objectives such as: to achieve 2% improvement in market share; to extend outlet coverage in defined geographical areas; to increase sales of non-oil products in existing outlets; to reduce costs of distribution by 5%. Following through the example, critical success factors for the first objective (2% improvement in market share) might be: effective regional and local pricing; increase consumers' brand awareness and loyalty; improve non-oil product range to attract customers; review all sites in terms of performance and productivity; ensure lead free petrol demand is matched by supplies at outlets.

Implications for information systems Having established critical success factors there are consequences for information systems. First, all critical success factors will require measures to be implemented within the management information system, to monitor their achievement. Second, critical success factors may also require systems enhancements or completely new systems.

Value chain analysis

Value chain analysis helps to analyse the role of information in a business and in the industry within which it works. It can reveal important aspects of relationships between organisations and in the business itself, identifying information that is needed, where it might come from, and also how information systems might affect the competitive positioning of one organisation and another. ( Diagram from pg 136)

Internal value chain

The internal value chain shows how the various activities and functions in a business unit contribute to the customer's requirements, and how costs are incurred in so doing. The model identifies two different types of business activity - primary and support and provides a framework for organizing the detail within them. Primary activities, in the lower half of the figure (above), fulfil the value-adding role of a business. 1. Inbound logistics 2. Operations 3. Outbound logistics 4. Sales and marketing 5. Services

Support activities are those required to control and develop the business over time,
and to facilitate the working of the primary activities. They do not add value directly but only through the enabling of primary activities. the support activities have two main contributions to make: To enable the primary activities to be carried out at optimum performance levels, for example by providing required services or by the development of new products, technologies or resources to meet current and future business needs. To enable the business to be controlled and developed successfully over time, principally through support for the management and through improved methods of planning and control.

Use of the internal value chain

It is important to understand the cost drivers in a business and why and how they are managed. The value chain model offers a useful way of identifying these drivers and allocating all the real costs in order to identify where savings can be made, and where performance needs to be improved. A logical approach to identifying how IS can improve the business is: Improving relationships with customers and suppliers in all aspects of their interface with the organisation (for example through better integration of customer information). Improving the critical information flows through the primary activities, removing bottlenecks and delays, and ensuring the accuracy and consistency of information used (for example total stock management, customer service monitoring). Improving the systems within each primary activity to achieve local improvements in efficiency (for example warehouse control, fleet management). Improving the way support systems can best assist the primary activities, as well as meeting central requirements (for example budgetary control, personnel data).

 Improving efficiency within the support activities by means of localised systems investments (for example financial consolidation, asset management).