A SOAR analysis is a technique that helps businesses at a strategic planning level to:
- Focus on what they are doing right.
- Determine which skills could be enhanced.
- Understand the desires and motivations of their stakeholders.
- Perform a SOAR Analysis
- Understanding a SOAR analysis
- Advantages of a SOAR analysis
- Disadvantages of a SOAR analysis
- SOAR vs. SWOT Analysis: What to use?
- SOAR Analysis vs. PESTEL Analysis
- Amazon SOAR analysis case study
- Uber SOAR analysis case study
- Key takeaways
- What is the difference between SWOT and SOAR analysis?
- Why is SOAR analysis better than SWOT?
- Why SOAR analysis is important?
- Connected Analysis Frameworks
Perform a SOAR Analysis
Understanding a SOAR analysis
The SOAR analysis is an acronym for Strengths, Opportunities, Aspirations, and Results.
The analysis is a positive evaluation because a business focuses on what it is doing well and then takes steps to do more of it. In other words, they endeavor to build on strengths instead of correcting weaknesses.
The SOAR analysis can be created as a simple 2 x 2 matrix with the four resulting quadrants making up the acronym itself.
Let’s now have a more detailed look at each.
Strengths are what a business does exceedingly well. They may relate to important assets, capabilities, resources, or accomplishments.
Strengths also relate to unique selling propositions and competitive advantage.
Opportunities are circumstances that a business can take advantage of to increase the odds of success – namely, those relating to market share and profitability.
What partnerships could a business create to enhance market share? What trends do they foresee, and how might any threats be reframed as opportunities to thrive?
Aspirations are visions that build on the strengths identified earlier. They must be challenging, inspiring, and meaningful.
That is, the business must be passionate about making a positive difference.
The organizations that take the time to create aspirations determine who they want to be and what they stand for.
Once aspirations have been qualified, it is time to quantify them with results. Results inform businesses on whether they have achieved success by helping them clarify their visions and aspirations into tangible outcomes.
Advantages of a SOAR analysis
Forward-looking and strength-focused
Especially compared to the similar SWOT Analysis which focuses more resources on rectifying weaknesses.
Incorporates tangible goals with facts regarding the business and market, unlike many other strategic frameworks.
Provides important guidance on the future direction of the business when strengths and aspirations are identified.
Disadvantages of a SOAR analysis
For businesses that have already defined a mission statement, the aspirations quadrant may be superfluous.
The strength-centric focus of the SOAR analysis does not take into account marketplace competition, potentially leading businesses to focus on what makes them uncompetitive.
As a result, the organization may set and achieve goals (and define success) based on metrics that will result in them becoming very much unsuccessful.
SOAR vs. SWOT Analysis: What to use?
The SWOT analysis looks at four factors: Strengths, Weaknesses, Opportunities, and Threats.
It aims to understand internal and external factors that make up the business landscape in which the organization operates.
And based on that, it aims to create a qualitative assessment of the business strategy.
On the other hand, the SOAR analysis looks at Strengths, Opportunities, Aspirations, and Results.
Similarly to the SWOT, Strengths and Opportunities help the organization look into the internal and external positive factors that make up its business landscape.
While on the other hand, identifying Aspirations and Results. In short, where the SWOT analysis looks at both positive and negative aspects of the business landscape.
The SOAR analysis focuses on the positive side.
Therefore, the SOAR, combined with the SWOT, can give a better representation for a proper assessment of the business landscape.
With the SWOT, you can assess both opportunities and threats.
With SOAR, you can devise an action plan based on strengths and opportunities ahead!
SOAR Analysis vs. PESTEL Analysis
Where the SOAR analysis looks at the business context by analyzing the Strengths, Opportunities, Aspirations, and Results of a business.
Amazon SOAR analysis case study
Below we will look at each of the four quadrants of the SOAR analysis matrix for the eCommerce company Amazon.
Amazon is the largest online retailer in the world, so it is no surprise that the company possesses strengths in many different areas. Here are just a few of them:
Like all online companies, Amazon avoids the costs associated with selling products in physical retail outlets.
In combination with its vast distribution network, the company can sell more units without an increase in marginal costs and then pass those savings to consumers.
In comparison, major competitor Walmart sells around 160 million.
A core component of Amazon’s business model is how it accommodates third-party sellers who take advantage of the company’s fast shipping and traffic levels, among other perks.
As more sellers flock to Amazon’s platform, its retail market share increases which creates a positive feedback loop.
Since there is relatively little scope for Amazon to increase its online retail market share, a potential opportunity for the company is expansion into physical retail stores.
This may improve its competitiveness against big-box retailers such as Target and Best Buy.
It may also provide an opportunity for more consumers to engage with the Amazon brand.
Amazon has of course made several acquisitions in related industries to either increase market share or establish itself in a new industry.
Notable acquisitions include Whole Foods Market, Zappos, Kiva Systems, Souq, and Twitch.
The company has also made sizeable investments in electric and autonomous vehicles and a personalized shopper service for Prime members.
When Jeff Bezos founded Amazon in 1994, he had aspirations to become the largest online book retailer in the United States.
While the company is now much more than a bookseller, a section of Amazon’s mission statement outlining an aspiration to be “Earth’s most customer-centric company” has remained more or less the same.
Today, the company’s mission statement also clarifies that Amazon wants to be the world’s best employer and also the safest place to work.
In addition to customer-centricity, Amazon also has a core focus on long-term thinking, invention, and operational excellence.
Amazon’s results speak for themselves. Revenue for 2021 alone was $469.82 billion with over 200 million Amazon Prime members around the world.
Almost 90% of buyers trust Amazon over other eCommerce platforms, with this number increasing to 98% and 99% for those that purchase each day and a few times a week respectively.
The company now operates the four key businesses of Amazon Marketplace, Amazon Web Services (AWS), Amazon Prime, and Subscription Services.
Each business supports the other three and creates synergies that would not exist if they operated independently.
In short, Amazon’s key businesses deliver speed, capacity, convenience, and traffic that no other competitor can match.
Read Also: Amazon Business Model
Uber SOAR analysis case study
Many believe Uber to be a harmful disruptor of the taxi industry, but the tech company has nevertheless reimagined personal transportation and connected the digital and physical worlds to help people move around more easily.
The company’s technology now enables people to move and connect in over 10,000 cities across 70 countries.
Uber has also grown into a global platform of affiliated services such as Uber Eats, Uber for Business, and Uber Freight.
In the process, it has allowed thousands to earn an income and its detailed driver verification checks have made chauffeured transport safer and more attractive.
As the first mover, the company has cemented itself as a leader in an industry it created.
Despite the appearance of several relatively successful copycat companies, Uber generated $17.4 billion in revenue in 2021 with 6.3 billion trips completed.
While Uber’s two primary drivers of growth are mobility (rides) and its delivery business, a third segment, Uber Freight, is an advanced logistics platform for shippers and carriers that is poised for growth.
Indeed, the segment was created in response to the popularity of eCommerce and a market expected to be worth around $2.7 trillion by 2026.
Uber has also made several divestitures in recent years, particularly in risky, cash-burning assets such as Uber Elevate, Joby Aviation, and autonomous driving segment Aurora.
With extra liquidity, the company can then acquire other companies that are more related to its core offering. These are rides, mobility, and freight businesses such as Postmates, Drizly, Transplace, and the P2P car sharing platform Car Next Door.
Uber has a relatively lengthy mission statement, but in general, the company is in the relentless pursuit of helping people go anywhere, get anything, or earn an income.
Uber also wants to be a transportation company that operates “in a way that’s sustainable for our planet.
And regardless of your gender, race, religion, abilities, or sexual orientation, we champion your right to move and earn freely without fear.”
Uber has aspirations of a 100% zero-emission platform by 2040 by assisting in the transition to electric vehicles, offering more green rides, and working with NGOs and private businesses to expedite the process.
In addition to providing a safe and reliable way for people to move around, the company also wants to remove barriers to healthcare and enable companies to provide a seamless travel experience for their employees.
Uber’s dominant market share speaks for itself, but the fact that the company was able to weather COVID-19 and high inflation surprised many analysts.
It posted second-quarter revenue of $8 billion in August 2022 – a 105% increase over the previous period in 2021 – with $382 million in free cash flow.
Uber’s vision to allow ordinary drivers to make an income is also flourishing, despite more expensive gasoline prices and continued involvement in various legal disputes.
The company now has almost five million drivers around the world, representing a 31% increase from last year.
- A SOAR analysis is an approach to strategic thinking where a business constructs its future through collaboration, understanding, and action.
- A SOAR analysis is visually represented by a four quadrant matrix containing the Strengths, Opportunities, Aspirations, and Results of a business.
- The SOAR analysis is a forward-looking strategy that links somewhat intangible strengths and aspirations with a more tangible goal setting. However, the strength-centric nature of the analysis may blind the organization to external factors or give it an inaccurate view of success.
What is the difference between SWOT and SOAR analysis?
The SWOT analysis looks at four factors: Strengths, Weaknesses, Opportunities, and Threats. The SOAR analysis looks at Strengths, Opportunities, Aspirations, and Results. The SWOT analysis looks at the business landscape’s positive and negative aspects. The SOAR analysis focuses on the positive side.
Why is SOAR analysis better than SWOT?
Since the SOAR analysis focuses on the positive side, adding in the mix of Aspirations and Results is an actionable framework compared to the SWOT analysis, primarily to understand the market’s landscape. Instead, the SOAR takes a step further by enabling a business to set further actions based on the context.
Why SOAR analysis is important?
The SOAR analysis is a helpful framework. Combined with other frameworks like SWOT, it can be actionable and help an organization understand what steps to take in the marketplace to build a competitive position.
Connected Analysis Frameworks
Related Strategy Concepts: Go-To-Market Strategy, Marketing Strategy, Business Models, Tech Business Models, Jobs-To-Be Done, Design Thinking, Lean Startup Canvas, Value Chain, Value Proposition Canvas, Balanced Scorecard, Business Model Canvas, SWOT Analysis, Growth Hacking, Bundling, Unbundling, Bootstrapping, Venture Capital, Porter’s Five Forces, Porter’s Generic Strategies, Porter’s Five Forces, PESTEL Analysis, SWOT, Porter’s Diamond Model, Ansoff, Technology Adoption Curve, TOWS, SOAR, Balanced Scorecard, OKR, Agile Methodology, Value Proposition, VTDF Framework, BCG Matrix, GE McKinsey Matrix, Kotter’s 8-Step Change Model.