What are the best tools and frameworks for conducting a strategic analysis of your industry and competitors?

1 PESTEL Analysis

A PESTEL analysis is a framework that examines the political, economic, social, technological, environmental, and legal factors that affect your industry. It can help you identify the macro-level trends and forces that shape your market and influence your customers, suppliers, and competitors. To conduct a PESTEL analysis, you need to research each of the six dimensions and evaluate their impact on your industry. For example, you can ask yourself how the current or future regulations, consumer preferences, technological innovations, or environmental issues might affect your industry's growth, profitability, or competitiveness.

2 Porter's Five Forces

Porter's five forces is a framework that analyzes the competitive intensity and attractiveness of your industry. It can help you identify the sources of rivalry, bargaining power, and barriers to entry that determine your industry's profitability and potential. To conduct a Porter's five forces analysis, you need to assess each of the five forces and their impact on your industry. For example, you can ask yourself how strong or weak are the existing competitors, potential entrants, suppliers, buyers, and substitutes in your industry, and how they affect your ability to create and capture value.

3 SWOT Analysis

A SWOT analysis is a framework that evaluates the strengths, weaknesses, opportunities, and threats of your organization. It can help you identify the internal and external factors that influence your performance and position in your industry. To conduct a SWOT analysis, you need to list and prioritize each of the four elements and their implications for your organization. For example, you can ask yourself what are the core competencies, resources, or advantages that you have or can develop, what are the gaps, limitations, or vulnerabilities that you need to address or overcome, what are the favorable or unfavorable situations or trends that you can exploit or avoid, and what are the potential or existing challenges or risks that you need to face or mitigate.

4 Value Chain Analysis

A value chain analysis is a framework that examines the activities and processes that your organization performs to create and deliver value to your customers. It can help you identify the sources of differentiation, cost efficiency, and competitive advantage that you have or can create in your industry. To conduct a value chain analysis, you need to map and analyze each of the primary and support activities that you perform, and their contribution to your value proposition and margin. For example, you can ask yourself how you can improve or innovate your inbound logistics, operations, outbound logistics, marketing and sales, and service, and how you can optimize or leverage your firm infrastructure, human resource management, technology development, and procurement.

5 VRIO Analysis

A VRIO analysis is a framework that evaluates the value, rarity, imitability, and organization of your resources and capabilities. It can help you identify the sources of sustainable competitive advantage that you have or can develop in your industry. To conduct a VRIO analysis, you need to apply each of the four criteria to your resources and capabilities, and determine their level of competitiveness. For example, you can ask yourself if your resources and capabilities are valuable, rare, costly to imitate, and supported by your organization, and how they affect your performance and position in your industry.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?