Framework Internal External Corporate Business Purpose Use in Strategy Essential Useful Notes

Level Level
Ansoff’s Matrix Evaluating Strategic Evaluation Guides the user about potential
* * Direction (assessing * direction – requires good
risk) analysis to evaluate market
attractiveness
Blue Ocean Strategic innovation – Innovation Interesting. Requires the user
* * avoiding competition * to develop strategy based on
changing industry
Boston Matrix Making Corporate Evaluation A simple way of thinking
* * level decisions about * about investment decisions.
Strategic resource Requires knowledge of Market
investment at Business Share and Market growth
Level potential. Heavily criticised as
having recommendations that
lack subtlety and flexibility.
Cascade of Overarching Crafting Strategy Reflects how Strategy is really
Choices * * framework guiding * developed. Users must not
elements of Strategic ignore the fact that it is a
Choice continuing process, not a static
one (hence the flow arrows in
the model)
GE Matrix Making Corporate Evaluation Similar comments and
* * level decisions about * criticisms to the Boston
Strategic resource Matrix.
investment at Business
Level
PESTEL Macro environment Evaluation Commonly known and nearly
* * focus to organise data * always done badly. Must be
about drivers of applied to the industry and
change on industries NOT the company. Of limited
use if it is used to look at the
current position. Useful if it is
used to assess potential
developments. Best used when
link to something else (Poss. 5
Forces, SWOT and Scenarios).
Find out from research if all
elements of the PESTEL are
important or relevant in the
industry. Don’t just fill it out
because there are 6 boxes!
Porter’s 5 Forces Method of Evaluation Misunderstood and misused. It
* * understanding the * is designed to look at industry
competitive forces that profitability. Pretty useless if it
dictate industry s being used to make decisions
profitability about the future and is used
only to assess the current
situation. Used well to assess
potential change it is useful.
Don’t ignore the arrows
linking each force – assess
from analysis how the
development in each force
affects the others and therefore
affects the whole.
Porter’s Generic Strategy Crafting Strategy Again heavily criticised but
Strategies * * Development. Focuses * still heavily used. Useful for
on Business level thinking about an overall
choices about strategic position but does not help you
positioning. to develop the sources of
competitive advantage (it
doesn’t claim to either!).
Used badly as people often
substitute ‘Cost’, for ‘Price’ –
Porter means ‘Cost’. Needs to
be linked to a method of
thinking about value creation.
Modern business often
combines differentiation and
cost – this doesn’t.
Resource Based An alternative view to Theoretical understanding Excellent way of
View * Strategic positioning * understanding that Strategy is
that suggests not just about industries and
competitive advantage Positioning. Not however a
lies in the tool or framework. You should
competencies and know about it but can’t use it
capabilities of the firm as a tool.
and how they are
deployed.
Scenario Planning Method of developing Dealing with uncertain Can be used simply or in a
* plausible alternative futures * very complex way. Useful
industry futures as a because it helps us to imagine
means of developing how things might be rather
strategy. than how they currently are.
Must have research behind it.
It needs to consider things that
might lie outside of the
industry currently. (An
example – the music industry
did not consider that file
sharing could be combined
with music. The two were
considered as separate. They
were combined. Result – when
was the last time you bought a
CD?)
Strategy clock Strategy Crafting strategy This is now disappearing from
* * Development. Focuses * a lot of Strategy texts. It takes
on Business level a more customer focused view
choices about strategic than the Generic Strategy
positioning model. It essentially does the
same job but looks at Price
and not Cost and allows for a
‘Hybrid’ position. Establish
thinking about a position but
not the sources of competitive
advantage i.e. a Position (say
Hybrid) is NOT strategy it is
just a position. Often used at
the same time as Porter’s
Generic Strategy model –
DON’T DO THIS. They do
just about the same thing!
SWOT Means of evaluating Evaluation Simple and easy to understand.
* * internal resources and * And that is the problem Often
capabilities relative to used to create an unjustified
external contexts. list in each box. It needs deep
thought and linkage between
the boxes. For example
something is only an
Opportunity if you have the
Strengths to exploit it. Needs
 evidence – why is something a
Strength? Where is the
evidence that it is attractive to
customers; superior to
competitors; can exploit
developing trends? Used well
it can be good. It is almost
never used well!!
Value Chain Method of analysing Analysis Porter again. Often used but
* * how business * realistically cannot be used
functions link together properly as you will not be
to create (or destroy) able to get sufficient data to
profit margin. fully calculate where the value
is lost or gained. Better suited
to manufacturing than
services. Useful for
understanding but not so much
for application.
VRIO A means of assessing Evaluation Very useful for thinking about
* * * competencies and * resources and competencies
Capabilities relative to but similar to the value chain it
competitors and in the is almost impossible to
context of customers actually find out about
or other key competencies from outside the
stakeholders. organisation. It is really hard
to do it from within! Need to
know it but avoid using.
VUCA Providing context for This is a very useful thinking
* Strategic Thinking * tool. It helps to think about
contexts and very helpful for
linking to scenario
development. You can’t
however ‘do a VUCA’ – it is
for thinking and
contextualising.
Value Proposition Method of designing Crafting value propositions Very useful if your task is to
Canvas * * * specific Value (often innovation) * develop specific a Value
Propositions based on proposition, particularly if this
Customer need, pains focuses on a change of
and gains. (links to the Strategy or Innovation. Think
Business Model about the task you are being
Canvas) asked to do first before you
deploy this!
Business Model Method of developing Crafting Business models Same as above but for
Canvas * * * Business Models by (often innovation) * Business Models.
linking elements of the
business to its
customers or potential
customers in order to
create innovative
models or superior
value.