BUSINESS STRATEGY MODELS Model

Porter's Diamond

Rational Model Box

Environmental Analysis

Why?
.. is used to understand why one country is more competitive in an industry than another

Adv/Pros
h h h h

Diadv/cons
Cannot rely soley on favourable diamond conditions for competitive advantage No mention of internal factors; ability to exploit related industries for example Increased globalisation mean some of the diamond advantageous factors are reduced, e.g. advanced factor conditions; can use offshore staff/ virtual networks Model relies on a static picture of the competition and therefore plays down the role of innovation Overemphasises the importancfe of the wider environment and therefore ignores the significance of possible individual company advantages with regard to resources, capabilities and competence

Porter's 5-forces

Environmental Analysis

.. is used to assess the competitve industry environment (consider government as 6th force with a significant impact on the dynamics of industry) TO IDENTIFY LEVEL OF PROFITABILITY IN INDUSTRY

Id areas where own power is low and so can focus on strategies to overcome; e.g. build barriers to entry to reduce threat from new entrants

Balanced Scorecard

Review and Control

.. is used as it considers a broad range of stakeholders which may have different objectives, covering financial and non-financial measures ENABLE COMPREHENSIVE PERFORMANCE MEASUREMENT

h Consider objectives of a wide range of stakeholders h Considers short-term, medium-term and long term objectives h Considers internal and external factors BETTER OBJE

h h h h h h h

May be difficult to attain accurate data (access to information) Difficult to prioritise measures Lack of expertise and knowledge Time and cost needed to measure and utilise effectively POTENTIAL CONFLICT OF NEEDS Doesn't consider internal Information overload Doesn't include the weather No connection to industry of firm, macro-economic Inflexible Stifles innovation, prescriptive

Stakeholder Analysis PEST Analysis

Mission and Objectives Environmental Analysis

.. is performed to assist in setting objectives that consider the needs of stakeholders (i.e. anyone with an interest in the organisation) .. is used to identify the opportunities and threats of the general environment that will aid or deminish the ability of the firm to filfill its objectives

Rational Model

All

h Easy to communicate to stakeholders (ICE) h Aids management as ensures you consider planning communication, co-ordination and control h Considers internal and external factors - SWOT .. is used as a communication document, and to trigger objective setting

h h

Mission Statement

Mission and Objectives

Customer Profitability Analysis

Position Audit

.. to assess the financial impact of a client

h h h h Can dispose unprofitable customers h h Can allocate resources more heavily to highly profitable clients, and h vice versa h h

Can be vague Not communicated Not bought in to Ignores customer life cycle, customer may grow over time Ignores positive impact of reference customers Short-termist Narrow - only considers financial impact

Mendelow's Stakeholder Matrix Ansoffs Product/market matrix BCG Matrix Benchmarking Business Process Re-engineering (BPR) Change Management Corporate Social Responsibility (CSR) Customer Lifecyle Analysis Direct Product Profitability (DPP) Economic Value Added / Shareholder Value Analysis Emergent Strategies Gap Analysis GE Business Screen Goold & Campbell I. C. E. Incremental strategies Knowledge Management Lynchs Expansion matrix Ms Model Marketing mix (4Ps) Opportunism Performance Pyramid

Mission and Objectives

.. is used to prioritise stakeholders because they have different objectives causing conflict .. used to evaluate the product portfolio in order to manage internal project risk, through a balanced portfolio

Position Audit

Mission & Objectives Outside of RM Review and Control Strategic Option Generation Position Audit Position Audit Outside of RM

.. is used to identify and group stakeholders

h Discover who stakeholders are, important as they provide companies objectives directly and/or indirectly

Too simple, general categeries give no guidance of how to deal with each group

.. is used to analyse a company internally as part of a position audit .. is used to ensure the controllable variables that a firm can use to influence a target market are taken into account .. is used as it highights the links between the vision of a company and it's functional objectives. It hopes to ensure a consistencyt of performance across all business areas.

h Covers a wide range of internal factors h Covers 4 major factors that should be considered when developing a marketking strategy h Inappropriate for a service industry (use 7 Ps, + process, people, physical evidence)

Porters Generic Strategies

.. is used in order to concentrate strategies and objectives in line with corporate mission by focusing on cost leader ship or product/service differnetiation in order to develop and sustain competitive advantage

Gives point of reference to initially assess objectives and strategies

Level generic strategies should be applied and followed is unclear SBU? Corporate? Some products may fit better under CL and another Diff e.g. VW group Skoda (CL) vs Audi (Diff)

Porters Value Chain Positioning approach outside in Product Life Cycle Project Management Ratio Analysis Resourced Based approach inside out

Model
SAF

Rational Model Box

Why?

Adv/Pros

Diadv/cons

SMART

Strategic Evaluation and .. is used to evaluate strategic options based on their Suitability (at achieving the Choice objectives), Acceptability (satisfies stakeholder requirements), Feasibility (can it be done with availible resources, and is it legal) .. is used to ensure objectives are useful and complete h Can aid motivation h Can aid control

TOWS analysis VFM Audits 3Es