strategic-analysis

Strategic Analysis Skill

Reusable workflow extracted from domik-mckinsey-strategic-decision-maker expertise.

Purpose

Apply McKinsey-level strategic analysis using MECE frameworks, hypothesis-driven problem solving, and quantitative prioritization to drive transformational business decisions with executive-ready recommendations.

When to Use

• Strategic initiative prioritization
• Business transformation planning
• Technology investment decisions
• Market entry/expansion strategy
• Digital transformation roadmaps
• M&A evaluation and due diligence
• Portfolio optimization
• Go/no-go decisions for major projects
• Executive decision support

Workflow Steps

1. Situation Assessment
2. Define the strategic question clearly
3. Understand current state and context
4. Identify key stakeholders and their perspectives
5. Map competitive landscape
6. Gather relevant data and metrics
7. Document constraints and assumptions

1. Issue Tree Construction (MECE)
2. Break down the strategic question into components
3. Ensure Mutually Exclusive, Collectively Exhaustive structure
4. Create hypothesis-driven issue tree
5. Identify key decision drivers
6. Prioritize branches for deep dive analysis

1. Hypothesis Formation
2. Formulate testable hypotheses about the answer
3. Define what evidence would prove/disprove each
4. Create hypothesis tree with supporting logic
5. Identify critical assumptions
6. Plan data collection to test hypotheses

1. Quantitative Analysis
2. Gather data to test hypotheses
3. Apply ISE Prioritization Framework (if applicable)
4. Calculate financial impact (NPV, IRR, ROI)
5. Perform sensitivity analysis
6. Create scenario models (best/base/worst case)

1. Qualitative Assessment
2. Evaluate strategic fit with company vision
3. Assess organizational capability and readiness
4. Consider market timing and competitive dynamics
5. Evaluate execution risk and mitigation strategies
6. Assess stakeholder alignment

1. Framework Application
2. Apply relevant strategic frameworks:
3. Porter's Five Forces (competitive analysis)
4. 7S Framework (organizational alignment)
5. Three Horizons (innovation portfolio)
6. Value Chain Analysis (competitive advantage)
7. SWOT Analysis (strategic positioning)
8. Synthesize insights across frameworks

1. Recommendation Development
2. Synthesize analysis into clear recommendation
3. Create executive summary (three key messages)
4. Develop implementation roadmap
5. Identify quick wins and long-term plays
6. Define success metrics and KPIs

1. Executive Communication
2. Structure as situation-complication-question-answer
3. Lead with recommendation, support with analysis
4. Create visual "so what" slides
5. Prepare for objections and questions
6. Define clear next steps with ownership

Inputs Required

• Strategic Question: Clear, specific decision to be made
• Business Context: Company strategy, market position, competitive landscape
• Financial Data: Revenue, costs, growth rates, market size
• Organizational Context: Capabilities, resources, constraints
• Timeline: Decision deadline, implementation window
• Stakeholders: Key decision-makers and their priorities

Outputs Produced

• Executive Summary: Three key messages with recommendation
• Strategic Analysis Report: Detailed issue tree and hypothesis testing
• Quantitative Models: Financial projections, scenario analysis, ROI
• Decision Framework Scorecards: ISE or custom scoring with justification
• Implementation Roadmap: Phased plan with milestones and accountability
• Risk Assessment: Key risks with mitigation strategies
• Presentation Deck: Executive-ready slides for decision meeting

MECE Framework Principles

Mutually Exclusive

• No overlap between categories
• Each item fits in only one bucket
• Clear boundaries between segments

Collectively Exhaustive

• All possibilities covered
• Nothing left out
• Complete picture of the problem space

Example Issue Tree

Should we enter Market X?

├─ Market Attractiveness (IS the opportunity good?)
│  ├─ Market size and growth
│  ├─ Competitive intensity
│  └─ Profitability potential
│
├─ Strategic Fit (SHOULD we pursue it?)
│  ├─ Alignment with company strategy
│  ├─ Synergies with existing business
│  └─ Risk profile compatibility
│
└─ Ability to Win (CAN we succeed?)
   ├─ Competitive advantage
   ├─ Required capabilities vs current state
   └─ Resource availability and commitment

ISE Prioritization Framework

Initiative-Level Assessment (1-5 scale)

Customer Value

• 5: CxO-validated outcomes with precise benchmarks
• 4: Defined outcomes with preliminary benchmarks
• 3: Aspirational outcomes without clear benchmarks
• 2: Problem identified, outcomes vague
• 1: No clear problem or impact defined

Microsoft Value (Annual NNR)

• 5: >$50M annual NNR
• 4: $20M-$50M annual NNR
• 3: $5M-$20M annual NNR
• 2: $1M-$5M annual NNR
• 1: <$1M annual NNR

Ecosystem Impact

• 5: Microsoft-wide blueprint with PG interest
• 4: Multi-industry use case, strong partner enablement
• 3: High relevance across industry, aligned to priority use case
• 2: Replicable across customer segment, moderate TAM
• 1: Replicable to 1-2 similar customers, low TAM
• 0: Highly tailored, not replicable

Technical Innovation

• 5: Transformational initiative co-led with PG
• 4: Deep frontier tech use, co-engineering with PG
• 3: Technically innovative, partially aligned with PG
• 2: Moderate complexity, some key Azure services
• 1: Not new, novel, or complex

Engineering Time to Solution

• 5: <60 Dev Days
• 4: 61-199 Dev Days
• 3: 200-499 Dev Days
• 2: 500-999 Dev Days
• 1: >1000 Dev Days

Time to Full Production

• 5: ≤2 months
• 4: 2-4 months
• 3: 4-8 months
• 2: 8-12 months
• 1: >12 months or no Azure tenant

Composite Score Calculation

Total Score = (Customer Value + Microsoft Value + Ecosystem Impact +
               Technical Innovation + Engineering Efficiency +
               Time to Production) / 6

Interpretation:
4.5-5.0: Strategic priority - immediate investment
3.5-4.4: Strong candidate - detailed planning
2.5-3.4: Conditional - requires optimization
1.5-2.4: Deferred - not currently strategic
<1.5: Decline - does not meet minimum criteria

Executive Summary Template

# Strategic Recommendation: [Clear Decision Title]

## Recommendation

[One sentence: What should we do?]

## Three Key Messages

1. **[First key message]** - [Why it matters]
2. **[Second key message]** - [Supporting evidence]
3. **[Third key message]** - [What it means]

## Strategic Rationale

[2-3 paragraphs explaining the "why" behind the recommendation]

## Expected Impact

- Financial: [Revenue/cost impact with timeframe]
- Strategic: [Competitive advantage, market position]
- Organizational: [Capability building, culture]

## Implementation Roadmap

- **Phase 1 (Months 1-3)**: [Quick wins, foundations]
- **Phase 2 (Months 4-6)**: [Scale, optimization]
- **Phase 3 (Months 7-12)**: [Full deployment, measurement]

## Key Risks & Mitigation

1. **[Risk]** - Mitigation: [Strategy]
2. **[Risk]** - Mitigation: [Strategy]

## Investment Required

- Capital: $[amount]
- People: [FTE count] over [timeframe]
- Timeline: [Duration]
- Expected ROI: [X]% by [timeframe]

## Success Metrics

- [KPI 1]: [Target by date]
- [KPI 2]: [Target by date]
- [KPI 3]: [Target by date]

## Next Steps

1. **[Action]** - Owner: [Name], Due: [Date]
2. **[Action]** - Owner: [Name], Due: [Date]

Example Usage

Input: Should we invest in building an AI-powered customer service platform?

Workflow Execution:
1. Situation: Current support costs $5M/year, 24-hour response time,
   custom