Industry Analysis - industry size, trends, opportunities, threats (what forces are shaping the industry)

Company Analysis – strengths, weaknesses, market share, core competencies, available resources, current financial metrics

Competitive analysis – current competitors (strengths, weaknesses, market shares, financial results and resources, anticipated future moves) and other competitive forces (customers, suppliers and product substitutions)

PEST Analysis – the political, economic, social and technological factors that could impact the organization

Identifying where the organization would like to go versus where it is today

Gap Analysis – What resources are required in order to achieve the desired position (financial capital, human capital, equipment and processes)

Evaluating Strategic Alternatives – Dr. Michael Porter has done extensive research and published several books and articles on achieving a competitive advantage. Professor Porter has identified cost leadership, differentiation and focus as three generic strategies when considering strategic alternatives.

A cost leadership strategy emphasizes efficiency – high volumes of a standardized product marketed to a large customer base. Maintaining this strategy requires continuous cost reductions, process engineering skills and an extensive distribution network.

A differentiation strategy involves creating a product (or service) that is unique. Because customers see the product as unequalled, customers tend to be more loyal to the brand. The company may be able to charge a premium. Strong research and development skills, product innovation, good engineering and marketing skills are required.

A focus strategy concentrates on a few select market segments. By focusing the organization's marketing efforts and product mix to one or two narrow market segments, a company can gain a competitive advantage through effectiveness as opposed to efficiency.

In their recent book Blue Ocean Strategy, Professors W. C. Kim and R. Mauborgne maintain that while traditional strategies (“red ocean” strategies) are important, they are insufficient to be able to sustain high performance. In order to seize profit and growth opportunities, companies must go beyond competing. Companies must create “blue oceans”.

In red oceans, industry boundaries are defined and accepted. Companies attempt to outperform one another in order to increase market share. As the market place becomes increasingly crowded, opportunities for growth and enhanced profits are reduced. Products become commodities. One company’s gain is achieved at another company’s loss. Intense and aggressive competition turns the ocean bloody, thus creating the term red oceans.

Blue oceans on the other hand represent the unknown market space, unspoiled by competition. Blue ocean strategy is based on the position that market boundaries and industry structure are undefined and can therefore be created by the actions of the industry players. Competition is irrelevant as the rules of the game have yet to be established.

In blue oceans, demand is created as opposed to being contested. This requires a shift of attention from supply to demand, from focusing on competition to a focus on customers and on creating innovative value.

Innovations (in products, services or delivery) must create value for the market, while reducing or eliminating features or services that are less valued by the market. This can only be accomplished via simultaneously pursuing differentiation and low cost.

Red oceans will always be a fact of business life. The authors maintain that it will always be important to swim successfully in the red oceans by out competing opponents. But with supply often exceeding demand, the ultimate goal is to find new and untapped markets, increasing both growth and profits while making competition irrelevant.

Operations – implementation to support the growth – innovations, product development, technology development, equipment, people, systems, cost leadership, allocation of resources

Finance – capital expenditures, working capital requirements, financial metrics - balance sheets, income statements, cash flow statements

Human Resources – recruitment, compensation, training programs, recognition and reward programs

Risk Analysis and Contingencies – competitive reactions, supplier changes, customer changes, financial shortfalls

Critical success factors - who, what, when

Monitoring and tracking to performance metrics