Framework Description Why it is used

O-S-A Objective: Should be specific, Define the strategy of a firm

measurable and time-bound -> A single completely
goal
Scope: Includes three dimensions ->
customer or offering, geographic
location and vertical integration
Advantage: Statement of customer
value proposition (why the customer
should buy) + Unique activities that
enable the firm alone to deliver the CVP
Porter's Five Degree of rivalry Helps explain why different
Forces Threat of Entry industries are able to sustain
Threat of Substitutes different levels of profitability
Buyer Power The forces are frequently used to
Supplier Power measure competition intensity,
attractiveness and profitability of
an industry or market
Balanced Identify goals, measures, targets and Identify metrics and measures to
Scorecard initiatives that answer the following assess company strategy
questions Communicate new strategy
Financial Perspective: How should we through Balanced Scorecard
appear to our shareholders? - RoE
Customer Perspective: How should we
appear to our customers? - On Time
Delivery
Internal Business Process Perspective:
What business processes should we
excel at? - Cycle Time
Learning and Growth Perspective: How
will we sustain our ability to change
and improve? - Time to market
Value Chain Primary Activities: Disaggregates a firm into its
1. Inbound logistics: Receiving, storing strategically relevant activities in
and disseminating inputs to the order to understand the behavior
product -> Material handling, of costs and sources of potential
Warehousing, Inventory Control, differentiation
Vehicle Scheduling and Returns to Value chain helps us analyze
Suppliers whether the company's activities
2. Operations: Transforming inputs to are a fit with the O-S-A
product -> Machining, packaging,
assembly, equipment maintenance,
testing, printing and facility operations
3. Outbound Logistics: Collecting,
storing and physically distributing the
product to buyers -> FG Warehousing,
 Material Handling, Delivery Vehicle
Operation, Order Processing and
Scheduling
4. Marketing and Sales: Means by which
buyers can purchase the product and
inducing them to do so -> Advertising,
promotion, sales force, quoting, channel
selection, channel relations and pricing
5. Service: Providing service to enhance
or maintain value of the product ->
Installation, repair, training, parts
supply and product adjustment
Support Activities: Procurement
(function of purchasing inputs),
Technology Development, Human
Resource Management, Firm
Infrastructure
3 Tests of The attractiveness Test: Industry must To check whether diversification
Acquisition be or can be made structurally will create shareholder value
attractive
Cost of entry test: Must not capitalize
future profits (project should be
economically viable)
Better off test: New unit must get
competitive advantage from link with
acquirer or vice versa
2 Tests of 1. Better-Off Test: Whether industry is Whether membership in a
Diversification attractive, competitive advantage (cost particular corporate family is
effects, willingness to pay or both), risk likely to help or hamper a
considerations particular business unit:
2. Best Alternative Test: Transaction 1. If you are considering adding a
costs -> Ownership, Partnership and business unit
issues with it 2. Divesting a unit to narrow
scope
3. Deciding how to manage a
portfolio of businesses
Ansoff's Matrix Market Penetration: Increase the per Identify the common thread for
capita consumption business/corporate strategy
Market Development: Increase the
number of customers
Product Development: Increasing the
choices available to existing customers
- May result in a decrease in
penetration
Diversification: Acquiring new
competencies
Seven Selling existing products to existing A tool you can use to identify
Strategic customersAcquiring new customers in opportunities for expansion that
Degrees of existing marketsCreating new products you may otherwise overlook
Freedom and servicesDeveloping new value-
delivery approachesMoving into new
geographiesCreating a new industry
structureOpening up new competitive
arenas
7S Strategy: The ways in which For proposing and evaluating
competitive advantage will be achieved plans for changing an
Structure: Way in which people, organization
activities, reporting relationships and Build organizational ability to
tasks are divided, and authority is deliver using 7S
distributed
Systems: Formal processes and
procedures used to manage the
organization, including budgeting,
management control systems,
performance measurement and reward
systems, information systems and
distribution systems
Staffing: People, background and
competencies -> Organization's
approach to recruitment, selection and
socialization
Skills: Competencies that reside in the
organization -> Includes people,
management practices, systems and
technology
Style: Leadership styke of top
management, including operating style
and small, symbolic acts
Shared Values: Core set of values