In the strategy planning process, what is factored into strategic analysis as the first step?

In the strategy planning process, the first step of strategic analysis often focuses on the organization’s mission, values, culture, and situational analysis. This foundational step is crucial because it helps define the identity and purpose of the organization, which in turn guides all subsequent strategic decisions. By clearly understanding the mission — the core purpose of the organization — and values — the beliefs that guide behavior and decision-making within the organization — leaders can align strategies that reflect the organization's identity.

Additionally, examining the culture allows for insights into how the organization operates internally and interacts with its external environment. The situational analysis, often encompassing a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), assesses the internal and external factors that affect the organization, giving a comprehensive view of the current situation. This thorough understanding is essential before considering specific market dynamics, customer preferences, financial forecasts, or competition, as it ensures that strategic initiatives are rooted in the organization’s core principles and current positioning.

Factors like competitors, customer preferences, and financial outlooks, while important, are typically analyzed following this initial understanding of the organization itself, making them secondary in the process.