Corporate strategy development via numerical situation analysis

Abstract

Purpose

Using the numerical situation analysis (NSA) technique in the development of corporate strategy provides senior managers with a suitable methodology for the creation of alternative strategic options. Subsequently, it may be used to evaluate those options for possible selection and implementation by the company concerned. In addition, the technique provides a graphic temporal point description of an organisation's strategic situation. Consequently, the aim of this paper is to outline the technique of NSA via a hypothetical example and thereby illustrate its use in practice.

Design/methodology/approach

By using a paradigm approach, the paper indicates the correct application of the NSA technique as a means of defining and evaluating alternative strategic options within a manufacturing company. As proposed, the methodology also permits several graphic illustrations of the strategic situation to be drawn, along with a scheme for monitoring the effectiveness of an adopted strategy.

Findings

The evolution of the suggested NSA technique and its application to the formulation of strategic options for a manufacturing company are outlined in the paper. In practice, its application in four differing industries has resulted in some caveats regarding its use, and to some provisional conclusions being drawn in respect of its usefulness to senior management. These are recorded in the concluding section of the paper.

Research limitations/implications

The design, development and application of NSA proposed in this paper together with the experience of its implementation and use, in practice, highlight a potentially useful extension to existing methods of strategy formulation. The methodology offers senior management a technique, whereby alternative strategic options may be defined and evaluated for possible adoption along with diagrammatic illustrations of an organisation's strategic situation. In addition, the approach allows a selected strategy to be monitored over time for effectiveness, thus providing an early warning mechanism in respect of strategic inutility.

Originality/value

The paper contributes to the existing knowledge based on strategy development, evaluation and selection. It also provides a mechanism for monitoring a selected strategy for effectiveness over time and a structured framework for senior management to undertake the strategic planning process. It may when used in practice achieve an improved level of strategic understanding on the part of senior management and thereby stimulate improved corporate performance.

Citation

Davies, A., John, E. and Thomas, A. (2014), "Corporate strategy development via numerical situation analysis", Benchmarking: An International Journal, Vol. 21 No. 4, pp. 619-633. https://doi.org/10.1108/BIJ-05-2012-0033