Porter’s Five Forces Model

 

 

 

 

 

 

 

 

 

 

 

Five Forces Radar Diagram

The relative power of each force is reflected in each of the five axes from a high to a low rating.

 

The total area enclosed by the lines between the axes represent the profit potential of the industry (Johnson et al., 2014, p.53).

 

In the text book two radar diagrams are plotted, illustrating competitive forces over time.

Industry Life Cycle

Segmentation – Scout Group

 

 

 

 

 

 

 

 

 

 

 

Part 2 – Environmental analysis

4. Internal environment analysis (Chapter 3 Johnson)

Resource based view (RBV) of strategy:

McKinsey’s 7S Framework (1980) to assess fit between the company’s strategy, structure, systems, staff, style, skills and superordinate goals

Barney’s VRIN/VRIO Framework (1991) applied to the distinctive capabilities

Value chain analysis identifying where the strategic capabilities reside in the value chain

Summary identifying the internal strengths and weaknesses.

 

 

 

 

 

 

 

 

 

 

 

McKinsey 7S Framework

 

 

 

 

 

 

 

 

 

 

 

Exploring Strategy: Text & Cases, 10th edition (2014) pp. 454-455 by Johnson et al.

Internal Analysis – Education Provider

 

 

 

 

 

 

 

 

 

 

 

Internal Analysis – WTSI

 

 

 

 

 

 

 

 

 

 

 

 

VRIN Framework (Barney, 1991)

 

 

 

 

 

 

 

 

 

 

 

Exploring Strategy: Text & Cases, 10th edition (2014) pp. 76-82 by Johnson et al.

VRIN vs VRIO Framework (Barney, 1991 & 1995)

 

 

 

 

 

 

 

 

 

 

 

Exploring Strategy: Text & Cases, 10th edition (2014) pp. 76-82 by Johnson et al.

Originally developed in his work ‘Firm Resources and Sustained Competitive Advantage’ four attributes that a firm’s resources must possess in order to become a source of sustained competitive advantage were identified; valuable, rare, imperfectly imitable and non-substitutable.

In his later work ‘Looking Inside for Competitive Advantage’ Barney introduced the VRIO framework, which was an improved version of VRIN;

valuable?

rare?

costly to imitate?

firm organised to capture the value of the resources?

 

VRIO Framework (Barney, 1995)

 

 

 

 

 

 

 

 

 

 

 

VRIO analysis – Education Provider

 

 

 

 

 

 

 

 

 

 

 

Value chain analysis

Example: Value chain mapping can used to understand how to improve quality (or lower costs) to understand how the various activities in delivering care fit together with the patient as the focus as opposed to the creation and delivery of a product or service. Connecting patients to the right services so that they benefit from the entire set of activities required for proper care.

Part 2 – Environmental Analysis

5. Strategic fit with the operating environment

 

SWOT Analysis summarising main findings from macro and micro trend analyses.

Application of the EVR framework (Thompson 2005) to evaluate the company’s strategic fit in respect of its congruence with its operating environment.

 

 

[Topic 3 refers]

 

 

 

 

 

 

 

 

SWOT Analysis – Scout Group

 

 

 

 

 

 

 

 

 

 

 

 

SWOT analysis – Education Provider

SWOT analysis – WTSI

 

 

 

 

 

 

 

 

 

 

 

 

EVR Framework

An organisation achieves congruence when its environment, resources and values are mutually reinforcing.

Strategic drift

Strategic drift

Exploring Strategy: Text & Cases, 10th edition (2014) pp. 162-166 by Johnson et al.

Part 3 – Strategic options

Based on the SWOT map the strategic options onto a TOWS matrix.

Evaluate the feasibility, acceptability and suitability (SAFe) of the strategic options to inform selection of one preferred option.

 

 

 

 

 

 

 

 

 

 

 

TOWS Matrix

Part 4 – Proposed strategy & implementation challenges

Change in business strategy for a SBU

Porter’s generic strategies

Faulkner & Bowman’s strategy clock

New corporate strategy direction

Ansoff matrix

Boston Consulting Group (BCG) matrix

Feasibility, implementation challenges & risks

Conclusion with triangulation

 

 

 

 

 

 

 

 

 

 

Strategy clock

Non-competitive strategies are ultimately destined for failure.

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