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We discuss analyses plenty here — it’s in the website name, of course!
We highlight many different types on a weekly basis. But what exactly is ‘analysis’?
It starts with the definition.
If you do a Google search akin to “define analysis”, you’ll most likely come across something like this:
Analysis; detailed examination of the elements or structure of something, typically as a basis for discussion or interpretation.
And while this is true it’s also very… dry. And broad.
When we define analysis, we’re examining the study of something. Often, the analysis corresponds to a business or business project. It addresses a fundamental problem and provides a solution or thorough response to understand issues in a more defined, or data-driven way.
Types of Analysis and Their Meaning
Take risk analysis. This kind of analysis examines the nature and impact of risk. But its primary purpose is to reduce risk to allow for successful projects.
The analysis utilizes key information to identify risks. And that information is used to craft a step-by-step plan to eliminate and/or reduce the risks before they occur. Thus, helping the company streamline productivity without facing any major fallouts.
We mention PEST(LE) and SWOT analysis often. They both have different goals, but the analysis aids in making informed decisions that are right for the business needs.
PEST(LE) analysis examines specific external factors that affect a business. These factors are…
And you can include legal and environmental in there as well.
The purpose of this analysis is to understand the types of external factors that influence businesses. The internal team can’t change these factors — in fact, the team often has no influence whatsoever on these factors.
Yet to be successful, the business must live cohesively with the influences.
On the other hand, SWOT analysis examines internal factors that affect a business positively and negatively. SWOT consists of:
Strengths are to be maximized. Weaknesses should be reduced or eliminated. Opportunities should be utilized to the company’s advantage. And threats must be realized to counteract adverse effects.
This analysis helps a business understand what they’re doing well, what they need to work on, what could help them, and what could destroy them.
Every type of Analysis Has One Major Thing in Common
Let’s look at our above examples.
Risk, PEST(LE) and SWOT are all very different analyses. And while they seem to do very different things, they share the same definition.
Analysis helps a business make informed decisions. That’s its purpose.
Every business requires decisions to go from A to B (from unsuccessful to successful). And the decisions to reach B must be informed, accurate, and backed by data.
That’s how we define analysis — as an informed method to move businesses towards success. That’s how it should be viewed when conducting an analysis of your own.
Remember how formal the dictionary definition of analysis was:
A detailed examination of the elements or structure of something, typically as a basis for discussion or interpretation.
It’s correct. But ‘discussion and interpretation’ for us means decision making backed by research, data, and necessary information.
Some analysis requires heavy research. And others only take a couple of hours to complete. But each type of analysis helps to make decisions that will benefit the company as a whole.
Image: Norman Chan/Shutterstock.com