Why Use a Multi-Criteria Analysis or Balance Scorecard?
Strategic analysis refers to the process of conducting research on a company and its operating environment to formulate a strategy. The definition of strategic analysis may differ from an academic or business perspective, but the process involves several common factors:
- Identifying and evaluating data relevant to the company’s strategy
- Defining the internal and external environments to be analyzed
- Using several analytic methods such as Porter’s five forces analysis, SWOT analysis, and value chain analysis
- Strategic alternatives evaluation and recommendation
Strategic alternatives evaluation and selection is the last step in a strategic planning process. To help financial analysts better compare the available strategic alternatives, a multi-criteria analysis or commonly called the balance scorecard is used to summarize all important attributes used to measure the profitability and attractiveness of the alternatives, such as revenue, operating margin, annual production capacity and number of employees employed.
The balance scorecard allows you to outline the criteria for an alternative to be considered "attractive", "moderately attractive" or "unattractive"; while the result scorecard helps you assign scores to the alternatives based on these criteria and finally choose the optimal strategy based on the total score. This balance scorecard template is a great tool for comparing strategic choices which are measured both quantitatively and qualitatively.
Screenshot from the template.
How to Use This Template
Download this balance scorecard template for your own strategic analysis! Determine your available strategic alternatives and the appropriate attributes to measure and compare their attractiveness. Assign a weight to each of the attributes and give each alternative a score on each line item. Finally calculate the total points scored by each alternative based the weighting and score, and identify the most attractive choice with the highest total points!
This business tool includes
Balance Scorecard PowerPoint Template
