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Top 7 Business Strategy Models

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UPDATED POST- Some Models I use for Business Strategy- to analyze the huge reams of qualitative and uncertain data that business generates. I have added a bonus the Business canvas

  1. Porters 5 forces Model-To analyze industries
  2. Business Canvas
  3. BCG Matrix- To analyze Product Portfolios
  4. Porters Diamond Model- To analyze locations
  5. McKinsey 7 S Model-To analyze teams
  6. Gernier Theory- To analyze growth of organization
  7. Herzberg Hygiene Theory- To analyze soft aspects of individuals
  8. Marketing Mix Model- To analyze marketing mix.

http://en.wikipedia.org/wiki/Porter_five_forces_analysis

1. A Model to Analyze Industries

It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An “unattractive” industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching “pure competition”, in which available profits for all firms are driven to normal profit.

 

2.Business Canvas

http://en.wikipedia.org/wiki/Business_Model_Canvas

The Business Model Canvas is a strategic management template for developing new or documenting existing business models. It is a visual chart with elements describing a firm’s value proposition, infrastructure, customers, and finances.[1] It assists firms in aligning their activities by illustrating potential trade-offs.

The Business Model Canvas was initially proposed by Alexander Osterwalder

Business_Model_Canvas (1)

3. BCG Matrix is best used to analyze your own or target organization’s product portfolio- applicable for companies with multiple products

http://en.wikipedia.org/wiki/Growth-share_matrix

To  help corporations with analyzing their business units or product lines. This helps the company allocate resources

 

 

4. To Analyze Countries for both customers ot vendors you can use the modified Diamond Model again by M Porter

http://en.wikipedia.org/wiki/Diamond_model

an economical model developed by Michael Porter in his book The Competitive Advantage of Nations,  where he published his theory of why particular industries become competitive in particular locations.

5.  To check which teams work and which teams done (within an organization) use

http://en.wikipedia.org/wiki/McKinsey_7S_Framework

a strategic vision for groups, to include businesses,business units, and teams. The 7S are structure, strategy, systems, skills, style, staff and shared values.

The model is most often used as a tool to assess and monitor changes in the internal situation of an organization.

Related-Also by Tom Peters

http://en.wikipedia.org/wiki/Management_By_Walking_Around

The expected benefit is that a manager, by random sampling of events or employee discussions, is more likely to facilitate the productivity and total quality management of the organization, as compared to remaining in a specific office area and waiting for employees, or the delivery of status reports, to arrive there, as events warrant in the workplace

6. Stages in Organizational Growth

http://accel-team.com/techniques/orgGrowth.html

developed by Larry E. Greiner is helpful when examining the problems associated with growth on organizations and the impact of change on employees. It can be argued that growing organizations move through five relatively calm periods of evolution, each of which ends with a period of crisis and revolution.

  • Each evolutionary period is characterized by the dominant management style used to achieve growth, while
  • Each revolutionary period is characterized by the dominant management problem that must be solved before growth will continue.

1

7. Stages in Individuals- Motivation

What motivates people to contribute (or fail to contribute) to teams, products, organizations, nations.

From-

http://en.wikipedia.org/wiki/Frederick_Herzberg

and http://en.wikipedia.org/wiki/Two_factor_theory

The following table presents the top seven factors causing dissatisfaction and the top six factors causing satisfaction, listed in the order of higher to lower importance.

Leading to satisfaction
  • Achievement
  • Recognition
  • Work itself
  • Responsibility
  • Advancement
  • Growth
Leading to dissatisfaction
  • Company policy
  • Supervision
  • Relationship with boss
  • Work conditions
  • Salary
  • Relationship with peers
  • Security

BONUS-This is more of a marketing and less of strategy model but still added here

What to sell and how to sell- Marketing Mix Model

Strategies-for-Marketing

Source-

http://en.wikipedia.org/wiki/Marketing_mix

Classification
Category Definition
Product A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible good or an intangible service. Intangible products are service based like the tourism industry, the hotel industry and the financial industry. Tangible products are those that have an independent physical existence. Typical examples of mass-produced, tangible objects are the motor car and the disposable razor. A less obvious but ubiquitous mass-produced service is a computer operating system.[1]Every product is subject to a life-cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales falls. Marketers must do careful research on how long the life cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves through each stage.[1]The marketer must also consider the product mix. Marketers can expand the current product mix by increasing a certain product line’s depth or by increasing the number of product lines. Marketers should consider how to position the product, how to exploit the brand, how to exploit the company’s resources and how to configure the product mix so that each product complements the other. The marketer must also consider product development strategies.[1]
Price the amount a customer pays for the product. The price is very important as it determines the company’s profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix.[1]When setting a price, the marketer must be aware of the customer perceived value for the product. Three basic pricing strategies are: market skimming pricing, market penetration pricing and neutral pricing. The ‘reference value’ (where the consumer refers to the prices of competing products) and the ‘differential value’ (the consumer’s view of this product’s attributes versus the attributes of other products) must be taken into account.[1]
Promotion all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion.[1]Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relations (see ‘product’ above).[1]
distribution (Place) refers to providing the product at a place which is convenient for consumers to access. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix.[1][3]

and a reworked version at

“P” category “C” category “C” definition
Product Consumer shifting the focus to satisfying the consumer needs. By defining offerings as individual capabilities that are combined and focused to a specific industry, the result is a custom solution rather than the pigeon-holing of a customer into a product.
Price Cost reflecting the total cost of ownership. Many factors affect Cost, including but not limited to the customer’s cost to change or implement the new product or service and the customer’s cost for not selecting a competitor’s product or service.
Promotion Communication represents a broader focus. Communications can include advertising, public relations, personal selling, viral advertising, and any form of communication between the organization and the consumer.
distribution (Place) Convenience With the rise of Internet and hybrid models of purchasing, Place is becoming less relevant. Convenience takes into account the ease of buying the product, finding the product, finding information about the product, and several other factors.

 4cs_marketing_mix_l


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