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.

Understanding a SOAR analysis

The SOAR analysis is an acronym of Strengths, Opportunities, Aspirations, and Results. The analysis is very much a positive evaluation, in the sense that 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 are determining 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 and disadvantages of a SOAR analysis

Advantages

  • 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

  • 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.

Amazon SOAR analysis case study

Below we will look at each of the four quadrants of the SOAR analysis matrix for 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 4 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.

Connected strategic frameworks

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.

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.

Porter’s Five Forces

porter-five-forces
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces

Growth-Share Matrix

bcg-matrix
In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful business product portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.

Root Cause Analysis

5-whys-method
The 5 Whys method is an interrogative problem-solving technique that seeks to understand cause-and-effect relationships. At its core, the technique is used to identify the root cause of a problem by asking the question of why five times. This might unlock new ways to think about a problem and therefore devise a creative solution to solve it.

NOISE Analysis

noise-analysis
A NOISE analysis is a strategic planning tool that is a useful alternative to the SWOT analysis. Conversely, the NOISE analysis allows decision-makers to analyze the current state of the business and create a strategic improvement plan. It incorporates solution-focused language that helps teams build upon their knowledge and goals and overcome identified obstacles.

SCOC Analysis

scoc-analysis
The SCOC analysis is an asset-based strategic planning tool focusing on the core strengths of a business, building upon what it claims to be the shortcomings of a traditional SWOT analysis. Indeed, the SCOC analysis claims that the SWOT analysis focuses on threats that might never materialize, thus underweighting potential opportunities.

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.

TOWS Matrix

tows-matrix
The TOWS Matrix is an acronym for Threats, Opportunities, Weaknesses, and Strengths. The matrix is a variation on the SWOT Analysis, and it seeks to address criticisms of the SWOT Analysis regarding its inability to show relationships between the various categories.

Other related business frameworks:

Additional resources:

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