Introduction to Issue-Based Strategic Analysis Model

The Issue-Based Or Goal-Based Model is one of the important strategic planning models that facilitate the enhancement of the basic plan and is mainly used by the organization that wants to go deeper into strategic planning. It is a conceptual model that is more dynamic and fluid as the Issue-Based Strategic Analysis Model helps to recognize various internal and external factors impacting the operations and achievement of various goals of the organization. The use of this model starts with the review of the organizational mission, vision, and guiding principles. This also ensures that the individual is practicing deep thinking and brainstorming practices to dig deeper and solve various business issues.

The need for an Issue-Based Strategic Analysis Model

You must also be aware of the fact that the business organization is surrounded by various issues and challenges which requires the organizations to determine how to address diverse issues. This issue can be addressed by the issue-based and goal-based strategic planning model.

The Issue-Based Strategic Analysis Model is one of the most important and common planning models used by tactical managers to identify and address various issues in the organization. The use of this model helps the organization to evaluate various issues and implement new strategies. Furthermore, this model is mainly used by business organizations with limited resources but diverse issues.

How to apply Issue-Based Strategic Analysis Model?

The Issue-Based Model is mainly used by established businesses by incorporating the results of the SWOT Analysis. The steps followed in the Issue-Based Strategic Analysis Model are shown as follows-

  • Performing SWOT Analysis to evaluate the internal and external factors impacting the business. While performing a SWOT Analysis, you need to consider the Strengths, Weaknesses, Opportunities, and Threats to the organization.
  • Identification of the major issues and goals of the organization.
  • Analysis of the mission, vision, and values of the organization.
  • Development of the action plans by considering the resource needs, issues, roles, and responsibilities of the team members. The action plans need to be defined in accordance with the mission, vision, and issues being faced by the organization.
  • Setting up a budget for the action plan
  • Execution and monitoring of the action plan to deal with various issues effectively.

When the Issue-Based Strategic Plan is developed and implemented, the organization should properly monitor the action plan to effectively deal with various threats and challenges.

Issue-Based Strategic Analysis Model real example

Let’s take the example of Starbucks Issue-Based Strategic Analysis Model to understand this model that can help organizations in dealing with various business issues.

Starbucks is an American MNC that operates a chain of coffee stores in 83 countries. The company is currently facing diverse issues due to political unrest, economic uncertainty, etc. To determine the current business situation of Starbucks, let us perform the SWOT Analysis of Starbucks.

Strengths Weaknesses
  • Number 1 brand in the coffee market
  • Premium brand image
  • Strong brand equity
  • Broad product range
  • Higher economies of scale
  • Strong social media presence
  • Wi-Fi network
  • Premium pricing strategy
  • Strong competition
  • Negative publicity
Opportunity Threats
  • Entry in new markets
  • Technological advancement
  • Product differentiation and diversification
  • Expansion of retail outlets
  • Extend supply chain network
  • Penetration pricing strategy
  • Threat from impacts of US-china war
  • Poor publicity
  • Change in government regulations
  • Business closure due to strong competition
  • Store closures due to the impacts of COVID-19
  • Supply chain disruptions
  • Product boycott

Starbucks is currently facing the issue of declining sales due to the impacts of COVID-19 and the US-China war. Further, Starbucks lost revenue of $ 3.2 billion during the third quarter of 2020 as a result of the store closure in the US and China due to the coronavirus pandemic. Along with this, the company also planned to close around 400 stores over the next 18 months to address the realities of the current situation and to focus on the expansion of the convenience format stores. The application of the SWOT Analysis model shows that the company is currently facing the problem of lower sales. In such a case, the company can use the Strategic Alignment Model to analyze the current strategies and determine future action plans. Further, the SWOT Analysis shows that the company has adopted the premium pricing strategy for its customers but the competitor firms such as McDonald’s adopt Low-Cost Pricing strategies for similar goods which are causing a shift in the company customers to the competitor firms. Besides this, the company also suffered a decline in sales by $ 16 million due to the occurrence of the racist incident at the workplace in Philadelphia.

Strategies to address these issues

To deal with the problem of declining sales, Starbucks should establish more pick-up stores in the urban markets and emerging countries to further deal with the problem of declining sales and store closures. In addition to this, Starbucks should also lower down the prices of its products to further attract a large number of customers. In addition, policies for promoting equality and diversity can also be strengthened to improve its reputation in the industry.

Establishing action plans

Problem Strategies Person responsible Timeline Budget
Declining sales due to store closures
  • Establishing more pick-up stores
  • Expansion of stores in emerging countries
 Top managers 3 months $ 100 million
Lower product affordability due to premium pricing strategies Price penetration strategies Production and financial head 2 months $ 20 million
Negative publicity due to occurrence of the racist incident in Philadelphia Effective policies for equality and diversity Human resource manager 1 month $ 5 million

Thus, it is found that the use of the Issue-Based Strategic Analysis Model can help Starbucks to identify and address diverse issues. Starbucks is facing the problem of declining sales due to changing external market conditions which include the outbreak of COVID-19, the US-China war, store closures, etc. The company has adopted Premium Pricing strategies which also results in lower sales of the company. Also, the company can improve its reputation by reducing the prices of its products to a certain extent and preventing the issues of discrimination and racism at the workplace.