ABSTRACT
This chapter analyses the location and sources of bargaining power, the nature and creation of different kinds of customer and company value, and the degree to which firms possess resources that would equip them with a competitive advantage. The purpose of this analysis is to diagnose the current condition of the organization and reveal the challenges it is facing, identify critical competitive pressures, question the validity of the organization's current value proposition and determine the strategic value of its current way of competing. Organizations are complex entities, both separate from, and comprising, people with different interests and perspectives. The chapter considers how decisions are made, and shows how strategic directions might be crafted, and how the proposed bases of competitive advantage might be evaluated and selected. Strategic analysis is an iterative and continual process involving the use of formal analytical models for evaluating an industry environment or a firm's value system.
