Understanding Relative Analysis in Business Strategy

Understanding Relative Analysis in Business Strategy

Relative analysis is a key tool in business strategy. Relative analysis, often referred to as relative valuation, of one parameter with respect to the other. 

Benefits of Relative Analysis

·        It can be performed relatively quickly, providing a fast way to gauge an asset’s value.

·        It can be applied across various industries and assets, making it a versatile tool for investors and analysts.

·         It incorporates, perceptions and expectations particular asset about the other asset or company.

Example in Relative Analysis

We can consider growing parameters for employee and company, and then measure the out comes in various boxes from company and employee point of view. The picture will come out how they view each other.

For growth parameter for company – we can consider profit growth, new acquisition, hire of new employees etc as some of the parameters.

For Growth of employee, we can consider – promotion, skill training program, mentoring etc. as some of the parameters.