Strategy Development Tools
By David Willden
Below are descriptions and/or links to various top strategy development tools:
Core Competence Analysis
Core competencies are those capabilities that are critical to an organization achieving its strategy and winning a competitive advantage.
Excellent article on core competence analysis
G.E. / McKinsey Matrix
This is a matrix used to screen portfolios of business units. Both the attractiveness of the industry and the strength of each business unit within the industry is plotted.
Key Success Factors
- These are the few characteristics, conditions, or variables that an organization must excel to be successful.
- Good example of key success factors
- Tool for translating your strategy into strategic projects
Marketing Mix Tools
- Marketing Mix Tools (4 Ps, 3 Ps, 4 Cs, 7 Cs)
Porter’s Five Forces
- Porter’s five forces, developed by Michael E. Porter, is a framework for analysis and strategy development.
Porter’s Generic Strategies
- “A firm’s relative position within its industry determines whether a firm’s profitability is above or below the industry average…There are two basic types of competitive advantage a firm can possess: low cost or differentiation.”
- PESTLE (Political, Economic, Social, Technological, Legal & Environmental) Analysis
- Political factors: areas to focus on include political direction, taxes, trade restrictions
- Economic factors: includes GDP, inflation, interest rates, exchange rates and other macro and micro economic factors
- Social factors: includes social trends, population growth rate, age distribution, career expectations, etc.
- Technology factors: includes equipment, information technology, R&D.
- Legal factors: include health, safety, employment, discrimination, consumer and antitrust laws.
- Environmental factors: includes weather and climate
- Scenario planning is a tool used to explore different future alternatives and their possible impacts on the organization. It is an approach intended to help the organization anticipate, strategize and plan for the future.
- SPACE analysis is a tool used to determine what type of strategy a company should undertake. The Strategic Position & Action Evaluation (SPACE) matrix a tool that focuses the competitive position of an organization.
Strategy Development Tools in Practice
- This two-page report from Warwick Business School identifies the 8 most used strategy development tools. These include: SWOT; Scenario Planning; Key Success Factors; Value Chain; Core Competence Analysis; Porter’s Five Forces; PESTLE Analysis; and Resource-Based Analysis.
- SWOT analysis involves looking at the internal and external factors that can impact the organization in achieving its vision.
- Strengths: factors that help the organization
- Weaknesses: internal factors that can harm the organization
- Opportunities: external factors that can help the organization
- Threats: external factors that can damage the organization
Value Chain Analysis
- Those strategic activities that an enterprise performs to create valuable products or services for its customers. Click here for more information.
Strategy Development Tools