Operational Analysis

Last Updated: April 28, 2024

Operational Analysis

Operational Analysis

In a business setting, it is very important to make sure that  the tools and strategies are working effectively. This is to ensure progress and stability of a company. In a small business setting, it is most likely that a big chunk of a marketing plan goes to operations. After all, it is the life and blood of a company.

In a business, most owners focus on the end results. However, what we forget sometimes is if we are using the proper action plan in accordance to the business goals and objectives. Unlike ratio analysis which focuses on the quantity of results in a financial statement, operational analysis delves into the examination if the strategies used could effectively come up with a positive result.

Performance Operational

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Annual Operational

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Modern Analysis Sample

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What Is an Operational Analysis?

Operational analysis is a feasibility study conducted to evaluate a company’s method of operation and to assess if the performance is effective enough to meet its goals.

It is an effective tool to verify any incompetency or detect factors that pulls any possibility of progress in the business analysis. It is also a method to create an incident analysis because anything that arises from any incident is involved during the operations.

It involves gathering of information to communication with people in the operation to better identify what works and what are those that needs to be eliminated for a better performance.

How to Write an Operational Analysis

To write a good operational analysis, you need to know the details that are included in the operation of the business. As a  formal analysis for business, an analyst needs to include the following details in the operational analysis.

  • The Location. Sometimes the location of the business could be a big factor to its progress. It could be distant from suppliers or consumers.
  • Materials. This is most applicable among manufacturing businesses. Using the right equipment and materials are factors to be always considered.
  • Manufacturing and Distribution. You wouldn’t know unless you see for yourself how the operation goes. Manpower is needed in a manufacturing industry. And if there is not enough of this or the method used in manufacturing is not effective, progress is out of reach.

Traffic Operational Analysis

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Comprehensive Analysis

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Operational Risk Analysis

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Operational Impact Sample

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Difference between Strategic Analysis and Operational Analysis

Although these two kinds of analyses are focus on the practical factors on how to improvement a company’s performance, they are different in their essence and modus operandi. Strategy plan and Operation are two of the most important factors in a business.

However, they are different in their focuses.

  • Operational analysis focuses on the larger sense of performance. It touches the activities such as operation management, supply of materials, marketing, sales, production, and finances.
  • Meanwhile, strategic analysis gives a brief study on what should be done in the company or the actions needed to stay and be ahead of the competition.

Purpose of Operation Analysis

As we have discussed in the early parts of this article, operation analysis is important to provide a general overview of a company’s performance in all aspects of the business. This written business analysis is an aid to guide business owners which company branches need improvements.

Like the mechanical build of a car, everything needs cooperation to provide the car its full potential. In the same way as how a company should work, coherence is important. Operation analysis will provide the needed remedy in attaining the company’s smart goal and for the business to be a success.

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