The initial phase of a strategic study should incorporate a review of the external environment within which a company operates. This includes such factors as the economic climate, current regulations and potential regulatory changes, and any relevant technological developments. One recognized approach to reviewing and evaluating the impact of the external environment is to undertake what is PEST analysis.
The analysis of relevant internal factors is also important. A typical approach is to undertake a form of SWOT analysis (strengths, weaknesses, opportunities and threats). This type of approach provides the opportunity for a company to review its position within the market-place with respect to its products, the demand for its products, the service it offers its customers and the position of its competitors.
In addition to a company’s corporate or business strategy, the other element that is crucial is the competitive strategy that the company plans to adopt. Competitive strategy has a major influence on the development of logistics strategy and in the way the physical structure of the operation may be configured. There are a number of important factors, but the key ones include the extent of globalization, the type of competitive positioning adopted and the degree to which the supply chain is an integrated one.
