McKinsey 7S Model

McKinsey 7S Model

Definition 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 achieve its objectives. Understanding the tool McKinsey 7s model was developed in 1980s by … Read more

VRIO Framework Explained

VRIO Framework

Definition 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 order to understand the sources of competitive advantage firms are using many tools … Read more

Value Chain Analysis

Value Chain Analysis

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 when transforming inputs into outputs. Understanding the tool Value chain … Read more

SWOT Analysis – How to Do It Properly

SWOT analys

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 with those from an analysis of external opportunities and threats.[3] … Read more

GE McKinsey Matrix

GE McKinsey Matrix

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 for each business unit (BU).[2] Understanding the tool In the … Read more

Boston Consulting Group (BCG) Growth-Share Matrix

BCG Matrix

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, which uses relative market share and industry growth rate factors … Read more

Competitive Profile Matrix (CPM)

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. The matrix identifies a firm’s key competitors and compares them … Read more

Benchmarking

Benchmarking

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 Comparing your own business to a rival is essential when … Read more

IFE & EFE Matrices

Ife Efe Matrices

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 opportunities and threats. Understanding the tool The internal and external … Read more

Porter’s Five Forces

Porter’s Five Forces

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 competitive forces are affecting an industry. The five forces identified … Read more

PEST & PESTEL Analysis

Pest and Pestel Analysis

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 involves the collection and portrayal of information about external factors which have, or may have, an impact on business.[2] Understanding the tool PEST or PESTEL … Read more

Mission Statement for Success

Mission Statement

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 purpose or reason for being. [2] It tells who a … Read more

Vision Statement

Business vision

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 statement asks ‘What does our business want to become?’ and … Read more

Vertical Integration

Vertical Integration

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 gains ownership or increased control over its previous customers (distributors … Read more

Horizontal Integration

Horizontal Integration

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 of integration strategies pursued by a company in order to … Read more

Competitive Advantage

Competitive Advantage

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 right reason. Nearly everything can be considered as competitive edge, … Read more

Resource-Based View

Resource-Based View

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 achieving competitive advantage that emerged in 1980s and 1990s, after … Read more

Strategic Management & Strategic Planning Process

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, strategy formulation, its implementation and evaluation. What is that strategic … Read more

Strategic Management & Strategic Planning

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 easy to understand answer. The combination of all 4 definitions … Read more