STRATEGIC ANALYSIS AND

CHOICE
 Process of strategic choice
• It is essentially a decision making process which
consist of setting objectives, generating
alternatives, choosing one or more alternatives
that will help the organization achieve its
objectives.
• There are 4 steps in the process of choice:
1. Focusing on strategic alternatives
2. Analyzing the strategic alternatives
3. Evaluating the strategic alternatives
4. Choosing from the strategic alternatives
 Focusing on strategic alternatives
• The aim of focusing on a few strategic
alternatives is to narrow down the choice to a
manageable number of feasible strategies
• For resolving the dilemma a decision maker
has to focus on a reasonable number of
alternatives
• Focusing on alternative could be done by
visualizing the future state and working
backwards, this can be done by Gap analysis
 Gap analysis
• A company sets objectives for future period of
time, may be for 3 to 5 years and then works
backward to find out where it can reach
through the present level of efforts.
• By analyzing the difference between the
projected and desired performance, a Gap
could be found.
• At the corporate level, the strategic
alternatives are 4 viz expansion, stability,
retrenchment & combined
• Where the gap is narrow stability strategies
would seem to be a feasible alternative
• If the gap is large due to expected
environmental opportunities expansion is
better
• If the gap is large due to past and expected
bad performance then retrenchment
• In a complex scenario where multiple reasons
are responsible for the gap then combination
is suitable
 Analyzing the strategic alternative
• The analysis has to rely on certain factors which are
termed as selection factors
• Further divided into :
 Objective: based on analytical techniques and are
hard facts or data used to facilitate a strategic
choice. They could be termed as rational, normative
or prescriptive. Example market share in % and sales
in units or in revenue.
 Subjective: based on one’s personal judgment,
collective or descriptive factors. Example company
top management perception of business growth
• Evaluating the strategic alternative: selection
factors are the criteria on the basis of which a
final choice of strategy has to be made by
considering both the facets.

• Choosing from among the strategic

alternatives: clear assessment of alternatives
and selection of most suitable.
TOOLS AND TECHNIQUES FOR
STRATEGIC ANALYSIS