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6. Synthesize Analysis and Determine a Firm’s Strategic Issue

Learning Objectives

After you have engaged with the concepts in this chapter, you will understand and be able to apply the following key strategic management concepts.

  1. The SWOT framework
  2. How a SWOT framework is used in strategic management
  3. How to synthesize analysis using a SWOT framework
  4. What a strategic issue is and why it is important
  5. How to determine major areas of strategic concern
  6. How to determine a firm’s strategic issue
  7. How to determine strategic alternatives
  8. How to evaluate alternatives
  9. How to develop an implementation plan to execute the recommended strategic alternative
  10. How to confirm line of sight and congruence across the entire case analysis

You will be equipped to

  1. Analyze the analysis you have completed so far, and complete a SWOT analysis
  2. Determine major areas of strategic concern
  3. Determine a strategic issue
  4. Determine strategic alternatives, evaluate them, and recommend one
  5. Determine line of sight and congruence throughout the entire case analysis
  6. Write an implementation plan for your recommended strategic alternative
  7. Write and/or present your case analysis

6.1 Introduction

In this chapter, you learn what a strengths, weakness, opportunities, and threats (SWOT) framework is and how it is used in strategic management to synthesize the analysis you have conducted so far. You learn how to determine a firm’s major areas of strategic concern and its strategic issue. You learn how to determine strategic alternatives, evaluate them, and recommend one. You learn how to how to determine line of sight and congruence throughout the entire case analysis and how to write an implementation plan for your recommended strategic alternative. This culminates in your learning how to write and present your case analysis.

6.2 SWOT Framework

Four separate yellow boxes representing strengths, weaknesses, opportunities, and threats
Figure 6.1: SWOT framework

A SWOT framework is a tool used to categorize a firm’s strengths, weaknesses, opportunities, and threats, typically portraying them in a grid with four quadrants. Strengths and weaknesses are on the top of the grid, and opportunities and threats are on the bottom of the grid.

In contexts other than the strategic management process, organizations use a SWOT framework as a standalone tool.

 

Application

  • Consider your search for a professional position after you graduate. Perhaps you already have plans.
    • Are you aiming to join a large company as a subject expert in accounting and information systems, business information technology and cybersecurity, finance, insurance and business law, hospitality and tourism management, human resource management, business management, management consulting and analytics, entrepreneurship, innovation and technology management, marketing, or real estate?
    • Does working with a smaller enterprise appeal to you more?
    • Perhaps you are planning on a more entrepreneurial path. Do you have a plan to start your own company? Maybe you already are an entrepreneur. You may be heading into consulting.
    • What are your current strengths that will support your success in your career plans? Do you have any weaknesses that you can mitigate to ensure your success? What are the external opportunities that you can capitalize on? Are there any threats to your plans that you can plan around?
    • Place your strengths and weaknesses in the top of a SWOT tool and the external opportunities and threats you may face in the bottom of a SWOT framework.
Key Takeaways

A SWOT framework is a tool used to categorize a firm’s strengths, weaknesses, opportunities, and threats. The framework is typically visualized as a grid, with strengths and weaknesses on the top of the grid and opportunities and threats are on the bottom of the grid.

6.3 How a SWOT Framework Is Used in Strategic Management

In strategic management, a SWOT framework is used to synthesize the analysis you have conducted so far. Synthesize means to review, critically examine, and combine diverse elements into a coherent whole. Synthesis is combining different concepts to create a new understanding, making a new whole from individual parts.

Think of a time when you wanted to make a large purchase. You gathered and analyzed a wide range of data, considered the relationships of that data, and decided what to buy based on your research. Perhaps you purchased a computer or another electronic device for school. Did you investigate different brands? Did you consider the type of chip? How important was RAM to you? Perhaps weight and size were important. What about price? You synthesized a lot of information to arrive at a decision based on your analysis.

To conduct a SWOT in strategic management, you synthesize the analysis you have conducted so far about a firm’s organizational performance, external environment, and internal environment. This means to review, critically examine, and combine the diverse elements of your previous analysis into a coherent concept.

When you synthesize the current analysis using a SWOT framework, this is referred to as a SWOT analysis. You are not returning to the case to conduct additional analysis from the case when you use a SWOT framework.

In strategic management, a SWOT framework is never used as a standalone tool. It is used only after you have completed your analysis of a company, when it is time to synthesize your analysis. In strategic management, once you have completed your SWOT analysis, you use your completed SWOT analysis to determine the firm’s strategic issue.

Key Takeaways

At this stage of strategic management, you analyze and synthesize the analysis you have conducted so far to complete the SWOT analysis. In strategic management, a SWOT framework is never used as a standalone tool, but as a way to determine the firm’s strategic issue from the analysis so far.

6.4 Synthesize Analysis Using a SWOT Framework

To conduct a robust SWOT analysis, begin by assessing which elements of the analysis you have conducted so far represent strengths, weaknesses, opportunities, and threats. This gives you a draft of a SWOT analysis. The next step is to synthesize the information in this draft. Once you confirm line of sight and congruence, you have a final SWOT analysis.

Determine Strengths, Weaknesses, Opportunities, and Threats

The first step in conducting a SWOT analysis is to identify strengths, weaknesses, opportunities, and threats in the elements you have analyzed thus far in the process. Then you place your previously conducted analysis into the correct categories of a SWOT analysis.

In strategic management, it is important to place the analysis that relates to the external environment of the firm in the bottom half of the grid, as they are opportunities and threats. External analysis addresses those issues external to a company and outside a firm’s control—the opportunities and threats a company faces.

Then place the analysis you have conducted so far about the company’s internal environment on the top of the SWOT framework as strengths and weaknesses. This is because internal analysis addresses those issues internal to a company and within a firm’s control. Issues within a company’s control are the company’s strengths and weaknesses.

Internal analysis for strengths and weaknesses, and external analyses for opportunities and threats
Figure 6.2: Synthesize analysis using a SWOT framework

Let’s consider the analysis you have conducted so far. You do not place every aspect of your analysis into your SWOT analysis. Decide which elements of your analysis impact the firm the most, are most relevant to the company, and are most important to the company. The evaluation step in the analysis you have conducted so far supports you in this assessment. Deciding which elements to place in the SWOT framework requires critical thinking and judgment.

Organizational Performance

In Chapter 3, you learned how to analyze a firm’s organizational environment. You used the organizational performance analysis instrument to analyze a company’s mission, purpose, vision, values, and goals. You analyzed a firm’s financial position, its market position, and other relevant quantitative measures. You also analyzed an organization’s balanced scorecard. Your analysis of a firm’s organizational performance produces information that relates to both the extremal and internal environments of a firm.

Synthesis begins with the examination of your analysis of the firm’s organizational performance, enabling you to decide which elements of your analysis relate to the company’s external environment and which elements relate to the firm’s internal environments. For example, you may decide that your analysis of a firm’s market position relates primarily to the external environment and your analysis of the company’s balanced scorecard may relate predominantly to the internal environment. This requires critical thinking and judgment.

Next decide whether those elements of your organizational performance analysis that relate primarily to the external environment represent opportunities or threats. Place those elements that you assess as opportunities in the opportunities box of your SWOT analysis. Place those elements that you assess as threats in the threats box of your SWOT analysis.

Then decide whether those elements of your organizational performance analysis that relate primarily to the internal environment represent strengths or weaknesses. Place those elements that you assess as strengths in the strengths box of your SWOT analysis. Place those elements that you assess as weaknesses in the weaknesses box of your SWOT analysis.

Now that you have analyzed your analysis of the firm’s organizational performance and placed this into the correct boxes of your SWOT analysis, you are now ready to move on to analyzing your external analysis.

External Analysis

In Chapter 4, you learned how to analyze the external environment of a company. You used the PESTEL analysis instrument to analyze the general environment and the Porter’s Five Forces analysis instrument to analyze the industry environment. You used the strategic group mapping analysis instrument to analyze a firm’s strategic group. The findings from your external analysis are placed in the bottom half of the grid as opportunities and threats because external analysis addresses those issues outside a firm’s control.

First decide whether the elements of your external analysis represent opportunities or threats. Place those elements from your analysis of the external environment that you assess as opportunities in the opportunities box of your SWOT. Place those elements from your analysis of the external environment that you assess as threats in the threats box of your SWOT.

Now that you have placed your analyses of the firm’s organizational performance and external analysis into your SWOT, you are now ready to move onto analyzing your internal analysis.

Internal Analysis

In Chapter 5, you learned how to analyze the internal environment of a company. You used the VRIO analysis instrument to analyze a firm’s resources, capabilities, and core competencies and the value chain analysis instrument to analyze a company’s primary and secondary activities. The findings from your internal analysis are placed in the top half of the grid as strengths and weaknesses because internal analysis addresses those issues within a firm’s control.

First decide whether the elements of your internal analysis represent strengths or weaknesses. Place those elements from your internal analysis that you assess as strengths in the strengths box of your SWOT. Place those elements from your internal analysis that you assess as weaknesses in the weaknesses box of your SWOT.

You have now analyzed the analysis you have conducted so far in the case analysis process, deciding which elements of your analysis impact the firm the most, are most relevant to the company, and are most important to the company. After critical examination, you placed those elements of your analysis that relate to the external environment on the bottom of your SWOT analysis as opportunities and threats and those aspects of your analysis that relate to the internal environment on the top of your SWOT analysis as strengths and weaknesses. This step of conducting your SWOT analysis provides you with a draft SWOT analysis.

Synthesize SWOT Analysis

As you are learning, it is never sufficient in case analysis to simply place information into a framework. You must use critical thinking and judgment to make decisions. The same is true for synthesizing your previous analysis using a SWOT analysis.

Now that you have completed a draft SWOT analysis, you synthesize the analysis you have placed in your draft.

To synthesize the analysis in your draft SWOT analysis, stand back and review the SWOT analysis. Think of it from a holistic perspective. Critically examine each element of your previous analysis that you have now placed into your draft SWOT analysis. Combine elements of your draft that relate. Work with your draft SWOT analysis until you have a succinct and concise analysis that represents all the essential elements of your draft SWOT analysis.

Confirm Line of Sight and Congruence

Once you have synthesized your analysis in the draft of your SWOT analysis, determine a clear line of sight and congruence between the analysis from the strategic management frameworks and your SWOT analysis.

A few questions to consider include:

  • Is there a clear line of sight between the analysis from the strategic management frameworks and the SWOT analysis?
    • Is there a clear logic behind how the analysis from the strategic management frameworks supports the SWOT analysis?
    • Is there a clear logic behind what analysis from the strategic management frameworks is placed in which category of the SWOT analysis?
  • Is there congruence between the analysis from the strategic management frameworks and the SWOT analysis?
    • Ensure that everything that is included in your SWOT analysis is included in an analysis instrument.
    • Ensure that nothing is present in your SWOT analysis that is not included in an analysis instrument.

This gives you your final SWOT analysis.

This is step four in case analysis.

4. Synthesize the organizational performance and the external and internal analysis using SWOT analysis.

  1. Synthesize the organizational performance and the internal and external analysis using a SWOT analysis.
  2. Ensure line of sight and congruence between the analysis from the strategic management frameworks and the SWOT analysis.

It is only from a robust SWOT analysis that it is possible to determine a firm’s strategic issue.

Video 6.1: SWOT Analysis [02:02]

The video for this lesson discusses SWOT Analysis.

Application

  • Let’s apply the SWOT analysis to a company. Use the same example of one of your favorite companies that you used with the PESTEL, Porter’s Five Forces, strategic group mapping, VRIO, and value chain analyses in the previous two chapters.
    • Place your analysis from the external environment (PESTEL, Porter’s Five Forces, strategic group mapping) on the bottom of the SWOT grid as opportunities and threats.
    • Place your analysis from the external environment (VRIO and value chain analysis) on the top of the SWOT grid as strengths and weaknesses. This gives you your draft SWOT analysis.
    • Synthesize the information in your SWOT analysis and confirm line of sight and congruence to determine your final SWOT analysis.
Key Takeaways

To conduct a SWOT analysis, begin by accurately assessing which elements of the analysis you have conducted far represent strengths, weaknesses, opportunities, and threats. Place the analysis that relates to the external environment of the firm in the bottom half of the grid as opportunities and threats because external analysis addresses those issues outside a firm’s control. Place the analysis you have conducted so far that relates to the internal environment of the company on the top of a SWOT framework as strengths and weaknesses because internal analysis addresses those issues within a firm’s control. This gives you a draft SWOT analysis. Then synthesize the analysis in your draft. Confirm line of sight and congruence. Now you have a final SWOT analysis. It is only from a robust SWOT analysis that it is possible to determine a firm’s strategic issue.

Bibliography

Abdel-Basset, M., Mohamed, M., & Smarandache, F. (2018). An extension of neutrosophic AHP–SWOT analysis for strategic planning and decision-making. Symmetry, 10(4), 116. https://doi.org/10.3390/sym10040116

Corporate Finance Institute. (2022, August 29). SWOT Analysis | Definition, Examples, Process & Uses [Video]. YouTube. https://www.youtube.com/watch?v=M-D6DbJswR4

Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis – where are we now? A review of academic research from the last decade. Journal of Strategy and Management, 3(3), 215–251.

6.5 Strategic Issue: What It Is and Why It Is Important

In addition to synthesizing organizational performance and external and internal analysis, executives and analysts use a SWOT analysis to begin the process of identifying a firm’s strategic issue. You also use a SWOT analysis to determine a firm’s strategic issue when conducting a case analysis. Before considering how a SWOT analysis is used to begin determining a firm’s strategic issue, it is first important to understand what a strategic issue is and why it is important.

Strategic Issue

We briefly introduced the concept of a strategic issue in the first chapter. We now cover its important role for any firm in greater detail.

A firm’s strategic issue is the most important, urgent, broad, and long-term matter that the company is facing. Strategic issues are the result of multiple causes in multiples areas of a business and require significant organizational talent and resources to resolve. Addressing a strategic issue moves a firm toward its mission, purpose, and vision and should therefore be congruent with its values. A strategic issue focuses on the present and specific organizational context, and considers what is happening with this firm, at this time, in this place, and under these circumstances.

Let’s unpack this definition:

A firm’s strategic issue is the most important, urgent, broad, and long-term matter that the company is facing.

The first thing to notice is that the definition refers to one strategic issue. We distinguish between major areas of strategic concern, and a firm’s strategic issue. Firms likely have more than one major area of strategic concern. Addressing multiple areas of strategic concern in one strategic issue has the advantage of clearly determining the relationships between the major areas of strategic concern. However, there is no one right answer to whether a company can have multiple strategic issues. It is more important to accurately capture all that is going on strategically for a firm than it is to be concerned with whether the firm’s strategic challenge is expressed as one or multiple strategic issues. We find it easiest to learn one approach at a time. Therefore, we present multiple areas of strategic concern written in one strategic issue.

A strategic issue is the most important concern that the company is facing. A strategic issue is not a trivial matter. It is very important and must be addressed. A strategic issue also is urgent. If the strategic issue is not addressed, there are likely serious consequences for the company. These could include loss of market share, loss of industry position, or even death. A strategic issue is broad. It captures the big picture of what the firm is facing. A strategic issue is long term. It is not something the company can deal with immediately.

Strategic issues are the result of multiple causes in multiples areas of a business and require significant organizational talent and resources to resolve.

Notice here that a strategic issue has multiple causes in multiples areas of a business. This means that strategic issues are complex, with related and overlapping causes. Because of their complex nature, they have significant impact across multiple areas of a company. Their complexity also means that they are not easily or quickly resolved. They require both talent and resources to address, and a company must be committed to solving them.

Addressing a strategic issue moves a firm toward its mission, purpose, and vision and should be congruent with its values.

Everything a firm does needs to be aligned to its mission, purpose, vision, and values.

A strategic issue focuses on the present and specific organizational context, addressing what is happening with this firm, at this time, in this place, and under these circumstances.

There is no one right formula for the structure of a strategic issue. When learning to identify a strategic issue, one good way to write a strategic issue is to begin with “How can [firm’s name] …”

When first learning what a strategic issue is, it is easy to write a strategic issue that is either too narrow or too broad. There are several reasons why a strategic issue may be too narrow. Many business students concentrate on functional areas such as business information technology, accounting, human resources, and entrepreneurship. This functional expertise is a strong asset when beginning a business career, but it can also narrow focus and sometimes lead to strategic issues that are aligned with a particular business function, such as marketing.

Another reason for identifying a strategic issue that is too narrow is the way that business education polishes skills in identifying problems and then immediately identifying solutions. This is an important skill in business. However, in strategic management, problems are identified through analyzing a company using strategic management tools. From those, a strategic issue is identified. Then strategic alternatives offer solutions to the issue. The extra step of identifying a broad concern from the problem is not necessarily unique to strategic management, but it may be a less-polished skill for many business students who have spent their business educations honing their skills in immediately identifying solutions. In strategic management, you analyze a case to identify the problem, then you determine a strategic issue before you move on to recommending solutions in the form of strategic alternatives.

Strategic issues that are too narrow often contain an action. Actions and solutions are identified later in the process as strategic alternatives.

When a strategic issue is too narrow and needs to be amended, a common response can be to then write a strategic issue that is too broad. If a strategic issue applies to all companies, then it is too broad. For example, a strategic issue reading “How can [firm’s name] make a profit?” is too broad because that is relevant to all companies, not just the firm that is being analyzed.

If a strategic issue always applies to the company being analyzed, not just right now, then the strategic issue is too broad. For example, if a technology company is being analyzed, then “How can [firm’s name] remain an industry leader in technology?” is too broad because this will always be relevant to the company being analyzed.

That is why a robust strategic issue must address what is happening with this firm, at this time, in this place, and under these circumstances, which can help focus a strategic issue that is too narrow or too broad. It focuses on the current context of the company being analyzed.

Companies with strong strategic management talent, processes, resources, and strategic leaders are more likely to be able to continuously address strategy in a dynamic and ongoing way. This positions them to amend their strategy incrementally to remain industry leaders. Failing to continue to invest in strategic management and leadership can lead to a company losing its position as an industry leader. Even industry leaders face significant challenges from their external and internal environments.

More often, strategic issues arise from shifts in the general environment, the industry environment, and the competitive environment, from organizational crises, or from other circumstances that are either unforeseen or which the company is insufficiently prepared to address. In these cases, failing to address a strategic issue quickly and thoroughly can lead to firm decline or even death.

Video 6.2: Strategic Issues [01:57]

The video for this lesson discusses strategic issues.

Key Takeaways

A firm’s strategic issue is the most important, urgent, broad, and long-term matter that the company is facing. Strategic issues are the result of multiple causes in multiples areas of a business and require significant organizational talent and resources to resolve. Addressing a strategic issue moves a firm toward its mission, purpose, and vision and should be congruent with its values. A strategic issue focuses on the present and specific organizational context, addressing what is happening with this firm, at this time, in this place, and under these circumstances.

Bibliography

GreggU. (2018, June 9). Strategic Issues [Video]. YouTube. https://www.youtube.com/watch?v=Zj_dxbJpCqo

Heath, R.L., & Palenchar, M.L. (2008). Strategic issues management: Organizations and public policy challenges. SAGE Publications. https://ebookcentral.proquest.com/lib/vt/detail.action?docID=997186

Rahim, M.A. (2016). Economics, finance, business & industry. Taylor & Francis.

Rahim, M. A. (2017). Intelligence, sustainability, and strategic issues in management: Current topics in management. http://dx.doi.org/10.4324/9780203788394

6.6 Determine Major Areas of Strategic Concern

Now that it is clear what a strategic issue is and why it is important, it is possible to begin determining a firm’s strategic issue. There are multiple ways to do so, and as with the number of strategic issues or the wording of a strategic issue, there is no one right approach. Regardless of the specific approach you use to determine a strategic issue, it is essential that you base your strategic issue on your completed SWOT analysis. A strategic issue must reflect the analysis you have conducted so far of organizational performance and the external and internal environments, which you have now synthesized in your SWOT analysis.

When learning to determine a strategic issue, it can be tempting to rush to define a strategic issue for a firm without using a structured approach. As you work with a case, you may begin to see areas a firm needs to address. Deciding a strategic issue without basing it on robust analysis is not a reliable or sufficient method. Strategic issues must be grounded in the thorough and robust analysis you have conducted so far using strategic management frameworks and your SWOT analysis.

Since students new to strategic management often benefit from having a specific process to follow to determine a strategic issue, we now review one approach to determine a strategic issue. First determine themes in your SWOT analysis. Use these themes to determine a firm’s major areas of strategic concern. Then confirm line of sight and congruence between the themes in your SWOT analysis and the major areas of strategic concern.

Determine Themes in Your SWOT Analysis

To determine a firm’s major areas of strategic concern, first determine themes in your SWOT analysis. Critically think about each strength, weakness, opportunity, and threat in your SWOT analysis, then identify which ones relate and how they relate.

Strengths, weaknesses, opportunities, and threats
Figure 6.3: Determine themes in your SWOT analysis

A few questions to consider include:

Are there themes within the categories?

  • In the strengths?
  • In the weaknesses?
  • In the opportunities?
  • In the threats?

Are there themes between the categories?

  • Between any two, three, or four of the categories: strengths, weaknesses, opportunities, threats?

Keep working with your SWOT analysis until all strengths, weaknesses, opportunities, and threats are assigned to a theme.

Let’s use an example to illustrate this process. Imagine that you have determined three themes in your SWOT analysis: competition, innovation, and technology.

Determine Major Areas of Strategic Concern

Next determine major areas of strategic concern from the themes you have just identified in your SWOT analysis. Major areas of strategic concern are the most urgent aspects of strategy that a firm needs to address immediately to ensure company success now and in the future.

Ensure each major area of strategic concern is mutually exclusive from the others, making them each distinct.

The number of major areas of strategic concern is determined by the analysis of the company’s current situation. Three is a good guideline because most companies are facing at least three major areas of strategic concern, and three major areas of strategic concern are likely the most a firm can effectively attend to at one time.

Yellow box labeled "Theme from SWOT" points to a box labeled "major area of strategic concern." This is repeated 3 times
Figure 6.4: Major areas of strategic concern

In our example, the three themes in your SWOT analysis—competition, innovation, and technology—are the major areas of strategic concern.

Finally, confirm the line of sight and congruence between the themes in your SWOT analysis and the major areas of strategic concern.

A few questions to consider include:

  • Is there a clear line of sight between the SWOT themes and the major areas of strategic concern?
    • Is it clear how the SWOT themes support the major areas of strategic concern?
  • Is there congruence between the SWOT themes and the major areas of strategic concern?
    • Ensure that everything that is included in your SWOT themes is included in the major areas of strategic concern.
    • Ensure that nothing present in your SWOT themes is omitted in the major areas of strategic concern.

This is step six in case analysis.

6. Determine major areas of strategic concern.

  1. Identify the major areas of strategic concern from the SWOT analysis and any additional analysis of strategies.
  2. Ensure line of sight and congruence between the SWOT analysis and the major areas of strategic concern.

We move to step 6 of case analysis because step 5 is “as appropriate to the case, analyze strategies: corporate level, business level, innovation, sustainability and ethics, technology, and multinational strategies.” That step addresses information that may be considered when determining a strategic issue but is not central to learning how to determine a strategic issue, so it is omitted here.

Application

  • Consider your SWOT analysis that you completed above.
    • Determine themes in your SWOT analysis.
    • Determine three major areas of strategic concern from the themes in your SWOT analysis.
    • Confirm the line of sight and congruence between the themes in your SWOT analysis and the major areas of strategic concern.
Key Takeaways

A strategic issue must reflect the analysis you have conducted so far of organizational performance and the external and internal environments, which you have now synthesized in your SWOT analysis. To determine a strategic issue, determine themes in your SWOT analysis, then identify major areas of strategic concern from the themes you identified in your SWOT analysis. Major areas of strategic concern are significant strategic areas that a firm needs to address immediately to ensure company success now and in the future. Each major area of strategic concern must be mutually exclusive. Aim for about three major areas of strategic concern. Lastly, confirm line of sight and congruence between the themes in your SWOT analysis and the major areas of strategic concern.

6.7 Determine a Strategic Issue

Now that you have determined three major areas of strategic concern, it is possible to continue with the process of identifying a firm’s strategic issue. First, rank the major areas of strategic concern, placing them in descending order of importance to the firm. Then identify the relationships between the major areas of strategic concern, and write phrases that capture these relationships. Place the phrases between the major areas of strategic concern. This is your draft strategic issue.

Relationship between major areas of strategic concern and strategic issue
Figure 6.5: Identify a strategic issue

Confirm line of sight and congruence between the major areas of strategic concern and the draft of the strategic issue.

A few questions to consider include:

  • Is there a clear line of sight between the major areas of strategic concern and the draft strategic issue?
    • Is there a clear logic between the major areas of strategic concern and the draft?
  • Is there congruence between the major areas of strategic concern and the draft strategic issue?
    • Ensure that everything that is included in your major areas of strategic concern is included in the draft.
    • Ensure that nothing present in your major areas of strategic concern is omitted in the draft strategic issue.

Review the draft of the strategic issue from a macro, big-picture orientation that considers the entire situation facing the firm. Stand back and critically think about your draft strategic issue from a holistic perspective and finalize it based on your in-depth knowledge of the case.

This is step seven in case analysis.

7. Determine strategic issue.

  1. Determine the strategic issue from the major areas of strategic concern.
  2. Ensure line of sight and congruence between the major areas of strategic concern and the strategic issue.

In our example, you determined that competition, innovation, and technology are the major areas of strategic concern. Let’s say you rank these in order of importance to the case as follows: innovation, technology, and competition.

Now you determine the relationship between the major areas of concern: firm needs to innovate so that it can address technology and deal with competition. This is your draft strategic issue.

Now stand back and critically think about your draft strategic issue from a holistic perspective and finalize it based on your in-depth knowledge of the case. Your final strategic issue may be “How can [company] continue to innovate so that it can successfully capitalize on rapidly changing technology in an increasingly competitive market?” In choosing this focus, you have moved from a draft strategic issue to a more refined and final strategic issue.

You arrived at this final strategic issue through your in-depth knowledge of the case. You know that the company is a leader in innovation, so you frame innovation as something they are going to continue to do.

You also know that, although they are a leader in innovating to use existing and especially new technology, developing new technology is not aligned to their mission and vision. Therefore, you frame your final strategic issue as capitalizing on rapidly changing technology. You know they want to use the latest technology but not develop it.

Finally, you know that, while their market position has been historically strong, they have had some very recent challenges to their market position from some new companies in the market. You frame the final strategic issue as competing in an increasingly competitive market.

Application

  • Consider your major areas of strategic concern that you determined above.
    • Rank the major areas of strategic concern, placing them in descending order of importance to the firm.
    • Identify the relationships between the major areas of strategic concern, and write phrases that capture these relationships.
    • Place the phrases between the major areas of strategic concern. This is your draft strategic issue.
    • Confirm line of sight and congruence between the major areas of strategic concern and the draft strategic issue.
    • Determine your final strategic issue.
    • Explain how your strategic issue meets each key aspect in the definition of a strategic issue:
      • The most important, urgent, broad, and long-term matter that the company is facing. Strategic issues are the result of multiple causes in multiples areas of a business and require significant organizational talent and resources to resolve. Addressing a strategic issue moves a firm toward its mission, purpose, and vision and should be congruent with its values. A strategic issue focuses on the present and specific organizational context, addressing what is happening with this firm, at this time, in this place, and under these circumstances.
Key Takeaways

To identify a firm’s strategic issue from the major areas of strategic concern, rank the major areas of strategic concern, placing them in descending order of importance to the firm. Identify the relationships between the major areas of strategic concern, and write phrases that capture these relationships, placing the phrases between the major areas of strategic concern. This arrangement is your draft strategic issue. Confirm line of sight and congruence between the major areas of strategic concern and the draft strategic issue. Review the draft from a macro orientation that considers the entire situation facing the firm. Critically think about your draft strategic issue from a holistic perspective, and finalize it based on your in-depth knowledge of the case.

6.8 Determine Strategic Alternatives

Once you have determined a strategic issue, the next step in case analysis is to identify strategic alternatives that address the issue. A strategic alternative is an action that addresses and has the potential to resolve every aspect of a strategic issue.

All strategic alternatives resolve the same strategic issue, just in different ways. Strategic alternatives address root causes; they do not address or mask symptoms. Strategic alternatives are forward-looking. They do not fix yesterday’s problems. Strategic alternatives are realistic in both practical and ethical senses. They are economically viable. It is important that strategic alternatives are well developed and explained so they can be implemented by the firm.

Identify at least three strategic alternatives that address all areas in the strategic issue. Then confirm line of sight and congruence between the strategic issue and the strategic alternatives.

A few questions to consider include:

  • Is there a clear line of sight between the strategic issue and the strategic alternatives?
    • Is there a clear logic between the strategic issue and the strategic alternatives?
  • Is there congruence between the strategic issue and the strategic alternatives?
    • Ensure that everything that is included in the strategic issue is addressed by each strategic alternative.
    • Ensure that nothing present in the strategic issue is omitted by each strategic alternative.
Line-of-sight and congruence can be used when mapping a strategic issue to a strategic alternative
Figure 6.6: Strategic alternatives

Most often, complete and immediate resolution of the strategic issue may not be realistic. Because strategic issues are complex and the result of multiple causes, strategic alternatives may begin by mitigating the circumstances causing the strategic issue or by aiming to improve the situation if a full resolution is not immediately possible.

In our example, you determined the firm’s strategic issue to be “How can [company] continue to innovate so that it can successfully capitalize on rapidly changing technology in an increasingly competitive market?” Next determine three strategic alternatives that address the strategic issue. This requires critical thinking and judgment and a thorough knowledge of the case.

One strategic alternative may be “partner with [technology company].” From your knowledge of the case, you know which company the firm is likely to consider. You also know that the firm you are analyzing is not in direct competition with the technology company, so a partnership may be a viable option to explore. It could be mutually advantageous for both companies. Perhaps you also know that the firm engages in a variety of cooperative relationships with other firms, so their culture would support such an alternative.

Another strategic alternative may be “invest heavily in talent acquisition and succession planning specifically aimed at innovation leaders.” You know from your knowledge of the case that the founders of the company remain their corporate leaders and are instrumental in setting the culture of innovation in the firm. However, while this hands-on approach was a key to their early success, the firm’s age and maturity and changing market conditions mean it is time to ensure the company’s early success can continue into the future.

A third strategic alternative may be “backwardly integrate into their value chain and acquire [technology company].” You know that one of their current suppliers is a small technology company that may be inclined to consider this option. This would require the firm to change their mission and vision to align with becoming a producer of the technology rather than just a consumer of it.

This is step eight in the case analysis process.

8. Determine strategic alternatives.

  1. Determine the strategic issue from the major areas of strategic concern.
  2. Ensure line of sight and congruence between the major areas of strategic concern and the strategic issue.

Application

  • Consider your strategic issue that you determined above.
    • Identify three strategic alternatives that address all areas in the strategic issue. Explain how each strategic alternative addresses all areas in the strategic issue.
    • Confirm line of sight and congruence between the strategic issue and the strategic alternatives.
Key Takeaways

A strategic alternative is an action that addresses and has the potential to resolve every aspect of a strategic issue. All strategic alternatives resolve the same strategic issue, just in different ways. Strategic alternatives address root causes, are forward-looking, are realistic practically and ethically, are economically viable, and can be implemented by the firm. Aim for about three strategic alternatives.

6.9 Evaluate Strategic Alternatives

Once you have determined three strategic alternatives, you need to recommend one. If you are conducting an abbreviated case analysis, you likely will not evaluate your three strategic alternatives.

If you evaluate the strategic alternatives, first identify the criteria you plan to use to evaluate the strategic alternatives. The criteria may vary depending on the specifics of the company being analyzed and may include, but are not limited to, the degree to which the strategic alternative resolves the strategic issue. Sometimes complete and immediate resolution of the strategic issue may not be realistic.

Another criterion to consider when evaluating strategic alternatives is whether they are consistent with the firm’s mission, purpose, vision, and values. Consider whether the strategic alternatives are consistent with the external and internal environments of the firm. Strategic alternatives should also be consistent with existing or needed firm resources, capabilities, and core competencies, and they should create a competitive advantage for the firm. Another criterion to consider is whether the strategic alternatives add value to the firm overall.

Whether strategic alternatives are financially realistic for the firm and how they impact a firm’s profitability also are important. Ask whether the strategic alternatives are realistic given the economic resources of the firm, as recommending a strategic alternative that a firm cannot fund is not helpful. Consider whether the strategic alternatives enable the firm to earn a profit by asking if they add value and increase price or if they add value without increasing costs. In addition, you must consider whether the strategic alternatives improve profitability.

Use the table below to evaluate the strategic alternatives against the criteria you choose. Delete criteria that you do not use, and add criterion that you use that do not appear in the table. Include a robust description of whether and in what ways each strategic alternative meets each criterion.

Criteria Strategic alternative 1 Strategic alternative 2 Strategic alternative 3
1. Resolves the strategic issue
2. Is congruent with the firm's mission, purpose, vision, and values
3. Is consistent with the external environment
4. Is consistent with the internal environment
5. Is consistent with the existing or needed firm resources, capabilities, and core competencies
6. Creates a competitive advantage for the firm
7. Adds value
8. Is realistic given available funding
9. Enables the firm to earn profit.
(A) Adds value and increases price
(B) Adds value without increasing cost
10. Improves profitability

Figure 6.7: Evaluate strategic alternatives

The last task for the strategic alternatives is to explain how each alternative meets the evaluation criteria. Give a full and clear explanation.

This is step nine in the case analysis process.

9. Evaluate strategic alternatives.

  1. Determine criteria to evaluate the strategic alternatives.
  2. Use criteria to evaluate the strategic alternatives.
  3. Clearly indicate how the strategic alternatives meet the evaluation criteria.

Application

  • Consider your strategic alternatives that you determined above.
    • Use figure 6.7 to identify criteria to evaluate the strategic alternatives.
    • Explain how each strategic alternative meets the evaluation criteria.
Key Takeaways

Once you have determined three strategic alternatives, you need to recommend one, which is achieved by evaluating the alternatives (unless you are conducting an abbreviated case analysis). If you evaluate the strategic alternatives, identify the criteria you plan to use to evaluate them. The criteria may vary depending on the specifics of the company being analyzed. Use the criteria to evaluate each alternative, explaining how each strategic alternative meets the evaluation criteria.

6.10 Recommend a Strategic Alternative

Once you have determined three strategic alternatives, you now recommend one. If you conduct an abbreviated case analysis, you may not have used criteria to evaluate your strategic alternatives. In this case, use critical thinking to recommend the best strategic alternative. You may still explain why you chose the strategic alternative that you did. If you use criteria to evaluate your strategic alternatives, explain how the strategic alternative you recommend best meets the criteria used.

This is step ten in the case analysis process.

10. Recommend strategic alternative.

  1. Recommend one strategic alternative using the evaluation criteria.

Application

  • Consider how each strategic alternative meets the evaluation criteria you used above.
  • Recommend a strategic alternative that best meets the criteria you use.
  • Explain how the strategic alternative you recommend best meets the criteria you use.
Key Takeaways

Once you have determined three strategic alternatives, you now recommend one either using critical thinking or criteria you identify.

6.11 Design an Implementation Plan

Now that you have recommended one strategic alternative, you may design an implementation plan to execute the recommended strategic alternative. As with the criteria to evaluate the strategic alternatives, implementation plans may vary depending on the specifics of the company being analyzed.

Implementation plans may include assumptions regarding implementation of the strategic alternative, such as changes in demand, price, and costs that factor in competitor reactions, customers’ willingness to pay a higher price, and realistic cost projections.

Implementation plans outline an implementation timeline that may include stages of the implementation plan, duration of each stage of the implementation plan, activities in each implementation stage, duration of activities in each implementation stage, and who is responsible for each activity.

New resources required will likely be addressed by an implementation plan. These include financial resources, such as available cash, stocks, and loans. The human resources of time and talent are also important. Other resources to consider are whether the firm has sufficient facilities and appropriate technology.

When designing an implementation plan, it is helpful to consider whether new or revised value chain activities are needed. Likewise, ask if new resources, capabilities, or core competencies are required. Consider whether changes are needed in organization structure or firm infrastructure, such as new positions and restructuring. Changes in organizational systems, such as incentive programs that will support the success of changes, may be helpful.

Use the table below to design the implementation plan against the criteria you choose. Delete criteria that you do not use, and add criteria that you use that do not appear in the table. Place a robust description of whether and in what ways the strategic alternative you recommend to be implemented meets each criterion.

This is step eleven in the case analysis process.

11. Design implementation plan.

  1. Design an implementation plan for the recommended strategic alternative.
Criteria Recommended strategic alternative
1. Assumptions regarding implementation of the strategic alternative
(a) Changes in demand
(b) Price and costs that factor in competitor reactions
(c) Customers' willingness to pay a higher price
(d) Realistic cost projections
2. An implementation timeline
(a) Stages of the implementation plan
(b) Duration of activities in each implementation plan
(c) Activities in each implementation plan
(d) Duration of activities in each implementation plan
(e) Who is responsible for each activity
3. New resources required
(a) Financial (available cash, stocks, loans)
(b) Human
(c) Facilities
(d) Technology
4. New or revised value chain activities
5. New resources, capabilities, or competencies required
6. Changes needed in organization structure
7. Changes needed in firm infrastructure
(a) New position needed
(b) Restructuring

Figure 6.8: Design an implementation plan

Application

  • Consider the strategic alternative you recommended above.
    • Use figure 6.8 and design an implementation plan.
Key Takeaways

Now that you have recommended one strategic alternative, you may design an implementation plan to execute the recommended strategic alternative. As with the criteria to evaluate the strategic alternatives, implementation plans may vary depending on the specifics of the company being analyzed.

6.12 Confirm Line of Sight and Congruence across the Entire Case Analysis

Line of sight and congruence are important throughout the case analysis process. Up to now, you have considered line of sight and congruence within a strategic management tool, among strategic management frameworks, and between steps in the case analysis process. It is now time to assess line of sight and congruence across the entire case analysis. Review the entire strategic analysis, ensure there is direct and clear logic connecting all elements in the strategic analysis, and confirm there is a one-to-one relationship between two or more things.

This is step twelve in the case analysis process.

12. Confirm line of sight and congruence across the entire case analysis.

Application

  • Review the entire strategic analysis you have conducted on one of your favorite companies.
  • Confirm there is line of sight and congruence across your entire analysis.
Key Takeaways

As a final check, assess line of sight and congruence across the entire case analysis.

6.13 Write and/or Present the Case Analysis

Now that you have conducted a case analysis, you will likely write it as an assignment and/or present it. A case analysis is not a data dump of every point of information produced. It is a presentation of a coherent and logical narrative.

This is step thirteen in the case analysis process.

13. Write and/or present case analysis.

Application

  • Review the entire strategic analysis you have conducted on one of your favorite companies.
  • Determine a coherent and logical narrative to present your analysis.
  • Discuss how you can avoid your case analysis being a data dump of every point of information you produced.
Key Takeaways

When you have completed your analysis, write it as an assignment and/or present it.

6.14 Conclusion

In strategic management, a SWOT framework is used to synthesize the analysis you have conducted so far. When you synthesize the analysis using a SWOT framework, this is referred to as a SWOT analysis. In strategic management, a SWOT framework is never used as a standalone tool. It is used only after you have completed your analysis of a company to synthesize that analysis. In strategic management, once you have completed your SWOT analysis, you use your completed SWOT analysis to determine the firm’s strategic issue.

A firm’s strategic issue is the most important, broad, long-term, and urgent matter that the company is facing. Strategic issues are the result of multiple causes in multiples areas of a business. They require significant organizational talent and resources to resolve. Addressing a strategic issue moves a firm toward its mission and vision while supporting its values. A strategic issue addresses what is happening with this firm, at this time, in this place, and under these circumstances. It is focused on the present and specific context.

To determine a strategic issue, determine themes in your SWOT analysis, determine major areas of strategic concern, write a draft strategic issue, and finalize it based on your knowledge of the case. Determine strategic alternatives, which are actions that address and have the potential to resolve every aspect of a strategic issue. Evaluate and recommend a strategic alternative, develop an implementation plan to implement your recommended strategic alternative, and present your case analysis.

Demonstrate Your Knowledge, Skills, and Competence

Use these questions to test your knowledge of the chapter:

  1. Describe a SWOT framework and how it is utilized in strategic management. Explain why you place your external analysis on the bottom of the grid and your internal analysis on the top of the grid. Discuss why a SWOT analysis is never used as a standalone tool in strategic management.
  2. Unpack the definition of a strategic issue to be sure you understand all its critical elements.
  3. Describe how you determine the major areas of strategic concern for a firm.
  4. Describe how to use major areas of strategic concern to identify a company’s strategic issue.
  5. Describe the criteria you may use to evaluate a firm’s strategic alternatives and how you would use these to recommend a strategic alternative.
  6. Describe the criteria you may use to design an implementation plan.
  7. Describe what confirming line of sight and congruence across the entire case analysis involves and why this is essential to a robust case analysis.

By answering these questions, you have demonstrated your thorough knowledge of how to synthesize your analysis and determine a firm’s strategic issue. This is essential to robust case analysis. Well done!

Figure Descriptions

Figure 6.2: Internal analyses for strengths and weaknesses include organizational performance, VRIO, and VCA. Strengths: strong resources, strong capabilities, strong core competencies, competitive advantages, and primary and secondary activities. Weaknesses: missing/weak resources, missing/weak capabilities, missing/weak core competencies, competitive disadvantages, primary and secondary activities, and weaknesses in the general, industry, and competitive environments. External analyses for opportunities and threats include organizational performance, PESTEL, P5, and strategic mapping. Opportunities: opportunities in the general, industry, and competitive environments, and industry opportunities. Threats: threats in the general environment and industry threats. This graphic is yellow.

Figure 6.3: Four separate yellow boxes representing strengths (S1, S2, and S3), weaknesses (W1, W2, and W3), opportunities (O1, O2, and O3), and threats (T1, T2, and T3).

Figure 6.5: Three major areas of strategic concern (most important to least important), each have a relationship with each other. These three areas point to “Draft strategic issue”, which then points to “Strategic issue.” This graphic is yellow.

Figure 6.6: Strategic issue points to three separate strategic alternatives, each of the three arrows represents line-of-sight and congruence. This graphic is yellow.

Figure References

Figure 6.1: SWOT framework. Kindred Grey. 2025. CC BY.

Figure 6.2: Synthesize analysis using a SWOT framework. Kindred Grey. 2025. CC BY.

Figure 6.3: Determine themes in your SWOT analysis. Kindred Grey. 2025. CC BY.

Figure 6.4: Major areas of strategic concern. Kindred Grey. 2025. CC BY.

Figure 6.5: Identify a strategic issue. Kindred Grey. 2025. CC BY.

Figure 6.6: Strategic alternatives. Kindred Grey. 2025. CC BY.

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Strategic Management and Case Analysis: An Integrated Approach Copyright © 2025 by Lori Anderson, Dirk Buengel, and Joseph J. Simpson is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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