The six questions of external analysis present a reliable framework which allows companies to correctly determine their position in the industry and assess available options of gaining a competitive advantage, yet it also has weaknesses. This approach’s primary strength manifests itself in the flexibility it provides since almost any business can use it to apply it to their particular field of work. Moreover, the framework gives an opportunity to reflect on the progress a specific company has made and through this process discover important aspects which guaranteed success in the past. Additionally, it can serve as an essential tool for correcting the current strategic model adopted by the company since it takes into consideration both the existing situation and possible future scenarios. Many businesses, despite having considerable resources, fail to utilize them properly as a result of poor strategic planning and understanding of the market, which is evidenced by Nokia’s example (Lamberg et al., 2019). The six questions of external analysis can be a simple but effective way for companies to become more aware of the existing trends and adjust their strategy based on this information.
Nevertheless, this framework also possesses specific weaknesses which negatively impact its effectiveness and may prevent some companies from achieving positive results when applying it. The primary problem of the approach is the fact that the questions are too broad and lack focus. For example, the question “What does it mean for us?” can be understood differently depending on the context. Another problem of this framework is its analytical nature, which constitutes itself in the fact that the model does not provide any practical solutions. It implies that the users will have to devise a strategic plan themselves, which is often difficult, especially for small enterprises. Thus, the six questions can be considered a useful tool for external analysis, but the one which lacks practical solutions.
Reference
Lamberg, J.A., Lubinaitė, S., Ojala, J., & Tikkanen, H. (2019). The curse of agility: The Nokia Corporation and the loss of market dominance in mobile phones, 2003–2013. Business History, 61, 1–47.