soar-analysis

What Is A SOAR Analysis And How To Use It

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

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

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

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

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. 

Results

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.

Tangible goals

Incorporates tangible goals with facts regarding the business and market, unlike many other strategic frameworks.

Guidance

Provides important guidance on the future direction of the business when strengths and aspirations are identified.

Disadvantages of a SOAR analysis

Overlap

For businesses that have already defined a mission statement, the aspirations quadrant may be superfluous.

Wrong goals

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?

swot-analysis
A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

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

pestel-analysis
The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

Where the SOAR analysis looks at the business context by analyzing the Strengths, Opportunities, Aspirations, and Results of a business.

The PESTEL analysis looks at the external business environment based on a few key macro factors:

Thus the PESTEL analysis framework, in combination with the SOAR analysis, can help have an internal and external assessment of the business landscape.

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-business-model
Amazon has a diversified business model. In 2021 Amazon posted over $469 billion in revenues and over $33 billion in net profits. Online stores contributed to over 47% of Amazon revenues, Third-party Seller Services,  Amazon AWS, Subscription Services, Advertising revenues, and Physical Stores.

Strengths

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:

Low-cost structure

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.

Product selection

Amazon has an impressive inventory of around 12 million items, with this number increasing to around 350 million when one considers products sold by third-party sellers.

In comparison, major competitor Walmart sells around 160 million.

Platform attractiveness

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.

Opportunities

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.

Aspirations

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.

amazon-vision-statement-mission-statement (1)
Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” 

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.

Results

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

uber-business-model
Uber is a is two-sided marketplace, a platform business model that connects drivers and riders, with an interface that has elements of gamification, that makes it easy for two sides to connect and transact. Uber makes money by collecting fees from the platform’s gross bookings.

Strengths

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.

Opportunities

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.

Aspirations

uber-mission-statement
Uber’s mission statement is to ignite opportunity by setting the world in motion.

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.

Results

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.

Key takeaways

  • 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

Failure Mode And Effects Analysis

failure-mode-and-effects-analysis
A failure mode and effects analysis (FMEA) is a structured approach to identifying design failures in a product or process. Developed in the 1950s, the failure mode and effects analysis is one the earliest methodologies of its kind. It enables organizations to anticipate a range of potential failures during the design stage.

Agile Business Analysis

agile-business-analysis
Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Business Valuation

valuation
Business valuations involve a formal analysis of the key operational aspects of a business. A business valuation is an analysis used to determine the economic value of a business or company unit. It’s important to note that valuations are one part science and one part art. Analysts use professional judgment to consider the financial performance of a business with respect to local, national, or global economic conditions. They will also consider the total value of assets and liabilities, in addition to patented or proprietary technology.

Paired Comparison Analysis

paired-comparison-analysis
A paired comparison analysis is used to rate or rank options where evaluation criteria are subjective by nature. The analysis is particularly useful when there is a lack of clear priorities or objective data to base decisions on. A paired comparison analysis evaluates a range of options by comparing them against each other.

Monte Carlo Analysis

monte-carlo-analysis
The Monte Carlo analysis is a quantitative risk management technique. The Monte Carlo analysis was developed by nuclear scientist Stanislaw Ulam in 1940 as work progressed on the atom bomb. The analysis first considers the impact of certain risks on project management such as time or budgetary constraints. Then, a computerized mathematical output gives businesses a range of possible outcomes and their probability of occurrence.

Cost-Benefit Analysis

cost-benefit-analysis
A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a cost analysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.

CATWOE Analysis

catwoe-analysis
The CATWOE analysis is a problem-solving strategy that asks businesses to look at an issue from six different perspectives. The CATWOE analysis is an in-depth and holistic approach to problem-solving because it enables businesses to consider all perspectives. This often forces management out of habitual ways of thinking that would otherwise hinder growth and profitability. Most importantly, the CATWOE analysis allows businesses to combine multiple perspectives into a single, unifying solution.

VTDF Framework

competitor-analysis
It’s possible to identify the key players that overlap with a company’s business model with a competitor analysis. This overlapping can be analyzed in terms of key customers, technologies, distribution, and financial models. When all those elements are analyzed, it is possible to map all the facets of competition for a tech business model to understand better where a business stands in the marketplace and its possible future developments.

Pareto Analysis

pareto-principle-pareto-analysis
The Pareto Analysis is a statistical analysis used in business decision making that identifies a certain number of input factors that have the greatest impact on income. It is based on the similarly named Pareto Principle, which states that 80% of the effect of something can be attributed to just 20% of the drivers.

Comparable Analysis

comparable-company-analysis
A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company. To find comparables you can look at two key profiles: the business and financial profile. From the comparable company analysis it is possible to understand the competitive landscape of the target organization.

SWOT Analysis

swot-analysis
A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

PESTEL Analysis

pestel-analysis
The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

Business Analysis

business-analysis
Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.

Financial Structure

financial-structure
In corporate finance, the financial structure is how corporations finance their assets (usually either through debt or equity). For the sake of reverse engineering businesses, we want to look at three critical elements to determine the model used to sustain its assets: cost structure, profitability, and cash flow generation.

Financial Modeling

financial-modeling
Financial modeling involves the analysis of accounting, finance, and business data to predict future financial performance. Financial modeling is often used in valuation, which consists of estimating the value in dollar terms of a company based on several parameters. Some of the most common financial models comprise discounted cash flows, the M&A model, and the CCA model.

Value Investing

value-investing
Value investing is an investment philosophy that looks at companies’ fundamentals, to discover those companies whose intrinsic value is higher than what the market is currently pricing, in short value investing tries to evaluate a business by starting by its fundamentals.

Buffet Indicator

buffet-indicator
The Buffet Indicator is a measure of the total value of all publicly-traded stocks in a country divided by that country’s GDP. It’s a measure and ratio to evaluate whether a market is undervalued or overvalued. It’s one of Warren Buffet’s favorite measures as a warning that financial markets might be overvalued and riskier.

Financial Analysis

financial-accounting
Financial accounting is a subdiscipline within accounting that helps organizations provide reporting related to three critical areas of a business: its assets and liabilities (balance sheet), its revenues and expenses (income statement), and its cash flows (cash flow statement). Together those areas can be used for internal and external purposes.

Post-Mortem Analysis

post-mortem-analysis
Post-mortem analyses review projects from start to finish to determine process improvements and ensure that inefficiencies are not repeated in the future. In the Project Management Book of Knowledge (PMBOK), this process is referred to as “lessons learned”.

Retrospective Analysis

retrospective-analysis
Retrospective analyses are held after a project to determine what worked well and what did not. They are also conducted at the end of an iteration in Agile project management. Agile practitioners call these meetings retrospectives or retros. They are an effective way to check the pulse of a project team, reflect on the work performed to date, and reach a consensus on how to tackle the next sprint cycle.

Root Cause Analysis

root-cause-analysis
In essence, a root cause analysis involves the identification of problem root causes to devise the most effective solutions. Note that the root cause is an underlying factor that sets the problem in motion or causes a particular situation such as non-conformance.

Blindspot Analysis

blindspot-analysis

Break-even Analysis

break-even-analysis
A break-even analysis is commonly used to determine the point at which a new product or service will become profitable. The analysis is a financial calculation that tells the business how many products it must sell to cover its production costs.  A break-even analysis is a small business accounting process that tells the business what it needs to do to break even or recoup its initial investment. 

Decision Analysis

decision-analysis
Stanford University Professor Ronald A. Howard first defined decision analysis as a profession in 1964. Over the ensuing decades, Howard has supervised many doctoral theses on the subject across topics including nuclear waste disposal, investment planning, hurricane seeding, and research strategy. Decision analysis (DA) is a systematic, visual, and quantitative decision-making approach where all aspects of a decision are evaluated before making an optimal choice.

DESTEP Analysis

destep-analysis
A DESTEP analysis is a framework used by businesses to understand their external environment and the issues which may impact them. The DESTEP analysis is an extension of the popular PEST analysis created by Harvard Business School professor Francis J. Aguilar. The DESTEP analysis groups external factors into six categories: demographic, economic, socio-cultural, technological, ecological, and political.

STEEP Analysis

steep-analysis
The STEEP analysis is a tool used to map the external factors that impact an organization. STEEP stands for the five key areas on which the analysis focuses: socio-cultural, technological, economic, environmental/ecological, and political. Usually, the STEEP analysis is complementary or alternative to other methods such as SWOT or PESTEL analyses.

STEEPLE Analysis

steeple-analysis
The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.

Activity-Based Management

activity-based-management-abm
Activity-based management (ABM) is a framework for determining the profitability of every aspect of a business. The end goal is to maximize organizational strengths while minimizing or eliminating weaknesses. Activity-based management can be described in the following steps: identification and analysis, evaluation and identification of areas of improvement.

PMESII-PT Analysis

pmesii-pt
PMESII-PT is a tool that helps users organize large amounts of operations information. PMESII-PT is an environmental scanning and monitoring technique, like the SWOT, PESTLE, and QUEST analysis. Developed by the United States Army, used as a way to execute a more complex strategy in foreign countries with a complex and uncertain context to map.

SPACE Analysis

space-analysis
The SPACE (Strategic Position and Action Evaluation) analysis was developed by strategy academics Alan Rowe, Richard Mason, Karl Dickel, Richard Mann, and Robert Mockler. The particular focus of this framework is strategy formation as it relates to the competitive position of an organization. The SPACE analysis is a technique used in strategic management and planning. 

Lotus Diagram

lotus-diagram
A lotus diagram is a creative tool for ideation and brainstorming. The diagram identifies the key concepts from a broad topic for simple analysis or prioritization.

Functional Decomposition

functional-decomposition
Functional decomposition is an analysis method where complex processes are examined by dividing them into their constituent parts. According to the Business Analysis Body of Knowledge (BABOK), functional decomposition “helps manage complexity and reduce uncertainty by breaking down processes, systems, functional areas, or deliverables into their simpler constituent parts and allowing each part to be analyzed independently.”

Multi-Criteria Analysis

multi-criteria-analysis
The multi-criteria analysis provides a systematic approach for ranking adaptation options against multiple decision criteria. These criteria are weighted to reflect their importance relative to other criteria. A multi-criteria analysis (MCA) is a decision-making framework suited to solving problems with many alternative courses of action.

Stakeholder Analysis

stakeholder-analysis
A stakeholder analysis is a process where the participation, interest, and influence level of key project stakeholders is identified. A stakeholder analysis is used to leverage the support of key personnel and purposefully align project teams with wider organizational goals. The analysis can also be used to resolve potential sources of conflict before project commencement.

Strategic Analysis

strategic-analysis
Strategic analysis is a process to understand the organization’s environment and competitive landscape to formulate informed business decisions, to plan for the organizational structure and long-term direction. Strategic planning is also useful to experiment with business model design and assess the fit with the long-term vision of the business.

Related Strategy Concepts: Go-To-Market StrategyMarketing StrategyBusiness ModelsTech Business ModelsJobs-To-Be DoneDesign ThinkingLean Startup CanvasValue ChainValue Proposition CanvasBalanced ScorecardBusiness Model CanvasSWOT AnalysisGrowth HackingBundlingUnbundlingBootstrappingVenture CapitalPorter’s Five ForcesPorter’s Generic StrategiesPorter’s Five ForcesPESTEL AnalysisSWOTPorter’s Diamond ModelAnsoffTechnology Adoption CurveTOWSSOARBalanced ScorecardOKRAgile MethodologyValue PropositionVTDF FrameworkBCG MatrixGE McKinsey MatrixKotter’s 8-Step Change Model.

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