This section covers the essential and the most popular business strategy tools used by companies to implement their strategic plans to achieve a sustained competitive advantage. We also have articles on strategic management/strategic planning and its process.
Strategic management is the key process in every organization’s efforts to gain and sustain a competitive advantage. It is essential for both small and large organizations.
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5S is a workplace organization method sthat uses a list of five Japanese words: Seiri (Sort), Seiton (Set-in-order), Seisō (Shine), Seiketsu (Standardize), and Shitsuke (Sustain) to organize a workspace for efficiency and effectiveness. By identifying and storing the items used, maintaining the area and items, … Read more
Six Sigma (6σ, 6 sigma) is a data-driven and customer-focused approach to improving the quality and efficiency of business processes. It aims to reduce variation and defects in products or services and to achieve near-perfection in meeting customer expectations. Six Sigma was developed by Motorola … Read more
Pareto Analysis (also referred to as Pareto Chart or Pareto Diagram) is one of the Seven Basic Quality Tools[1] for process improvement. These seven basic tools form the fixed set of visual exercises most helpful in troubleshooting issues related to quality. They are called “basic” … Read more
This article is a comprehensive exploration of the Theory of Constraints (TOC), a process improvement approach that aims to improve the performance and profitability of any system by identifying and eliminating the “constraint” that limits its output, throughput, and goal achievement. Dr Eliyahu Goldratt[1], an … Read more
“Are you sure you have a strategy?” – was the title of the article in which Donald Hambrick and James Fredrickson introduced the “Strategy Diamond” – a management framework for strategy formulation.[1] Companies use the term strategy in various contexts, such as service strategy, branding … Read more
This article is a comprehensive exploration of the Blue Ocean Strategy that provides organizations with the frameworks and analytical tools to create and capture uncontested markets and unlock vast growth opportunities. The term Blue Ocean Strategy (BOS) was first coined by Professors Chan Kim and … Read more
What is McKinsey 7S Model? McKinsey 7S model is a tool that analyzes firm’s organizational design by looking at 7 key internal elements: strategy, structure, systems, shared values, style, staff and skills, in order to identify if they are effectively aligned and allow organization to … Read more
What is VRIO Framework? VRIO framework is the tool used to analyze firm’s internal resources and capabilities to find out if they can be a source of sustained competitive advantage. Term VRIO comes from the words value, rarity, imitability and organization. Understanding the tool In … Read more
Definition Value chain analysis (VCA) is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation. Value chain represents the internal activities a firm engages in … Read more
Definition Swot analysis involves the collection and portrayal of information about internal and external factors which have, or may have, an impact on business.[2] SWOT is a framework that allows managers to synthesize insights obtained from an internal analysis of the company’s strengths and weaknesses … Read more
Definition GE-McKinsey nine-box matrix is a strategy tool that offers a systematic approach for the multi business corporation to prioritize its investments among its business units.[1] GE-McKinsey is a framework that evaluates business portfolio, provides further strategic implications and helps to prioritize the investment needed … Read more
Definition BCG matrix (or growth-share matrix) is a corporate planning tool, which is used to portray firm’s brand portfolio or SBUs on a quadrant along relative market share axis (horizontal axis) and speed of market growth (vertical axis) axis. Growth-share matrix is a business tool, … Read more
Definition The Competitive Profile Matrix (CPM) is a tool that compares the firm and its rivals and reveals their relative strengths and weaknesses. Understanding the tool In order to better understand the external environment and the competition in a particular industry, firms often use CPM. … Read more
Definition Benchmarking is a strategy tool used to compare the performance of the business processes and products with the best performances of other companies inside and outside the industry. Benchmarking is the search for industry best practices that lead to superior performance.[1] Understanding the tool … Read more
Definition Internal Factor Evaluation (IFE) Matrix is a strategy tool used to evaluate firm’s internal environment and to reveal its strengths as well as weaknesses.[1] External Factor Evaluation (EFE) Matrix is a strategy tool used to examine company’s external environment and to identify the available … Read more
Definition Porter’s five forces model is an analysis tool that uses five industry forces to determine the intensity of competition in an industry and its profitability level.[1] Understanding the tool Five forces model was created by M. Porter in 1979 to understand how five key … Read more
Definition PEST analysis is an analysis of the political, economic, social and technological factors in the external environment of an organization, which can affect its activities and performance.[1] PESTEL model (or PESTLE model) involves the collection and portrayal of information about external factors which have, … Read more
Definition Mission statement is a description of what an organization actually does – what its business is – and why it does it.[1] Understanding the tool Often called the “credo”, “philosophy”, “core values” or “our aspirations”, organization’s mission is the statement that defines its core … Read more
Definition Vision is a statement that expresses organization’s ultimate objectives. Understanding the tool It is very important for any organization to have clear and attainable long-term vision; the statement that guides every chief executive, manager or employee in achieving the same organizational objective. A vision … Read more
Definition Vertical integration is a strategy used by a company to gain control over its suppliers or distributors in order to increase the firm’s power in the marketplace, reduce transaction costs and secure supplies or distribution channels. Forward integration is a strategy where a firm … Read more
Definition Horizontal integration is the process of acquiring or merging with competitors, leading to industry consolidation. Horizontal integration is a strategy where a company acquires, mergers or takes over another company in the same industry value chain. What is horizontal integration? It is a type … Read more
Definition Competitive advantage means superior performance relative to other competitors in the same industry or superior performance relative to the industry average.[1] What is competitive advantage? There is no one answer about what is competitive advantage or one way to measure it, and for the … Read more
Definition The resource-based view (RBV) is a model that sees resources as key to superior firm performance. If a resource exhibits VRIO attributes, the resource enables the firm to gain and sustain competitive advantage.[1] What is a resource based view? RBV is an approach to … Read more
Definition Strategic management process is a method by which managers conceive of and implement a strategy that can lead to a sustainable competitive advantage.[1] Strategic planning process is a systematic or emerged way of performing strategic planning in the organization through initial assessment, thorough analysis, … Read more
Definition Strategic management can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives.[1] What is that strategic management? Various definitions are used to describe the subject, but few give a full and … Read more