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Business Analysis Models STRATEGY #1 Model: Strategic Planning Model Stage 1: Strategic Position Stage 2: Strategic Choices Stage

3: Strategic Implementation

#2 Model: Johnson and Scholes Three Levels of Strategy Corporate Strategy

Business Strategy

Operational Strategy

#3 Model Johnson and Scholes Strategic Lenses

Ideas Design

Experience

STAKEHOLDERS, ETHICS AND CULTURE #4 Model: Mendelows Stakeholders Mapping


Low High

3. Keep Informed

1. Key Players (Most Important Stakeholders) 2. Keep Satisfied

Interest 4. Minimal Effort


High

Power

Low

#5 Model: Charles Handy Types of Culture Power culture Role culture Task culture Person culture Heavily centralized. Allows quick response to changes in environment Few people make the decisions in the organisation Lots of formalized procedures. Very bureaucratic. Useful in an environment that is stable. Emphasis on getting tasks done. Work is complex. Rules are hardly followed . Works well in complex, unstable environments. Purpose is purely to look after the individuals

#6 Model : Miles and Snow Strategic Cultures Organizations and the type of strategies they try to follow Like strategic options that have worked in the past Defender organizations Low risks. Secure markets Like options that would deliver results even if it entails high risks Prospector organizations Will move into new areas only after someone else have done so Analyzer organizations Do not plan ahead Reactor organizations

#7 Model: Johnson and Scholes - The Culture Web Culture is made up of seven elements. Tells why we do things like we do. What procedures are emphasized? Are status symbols used as rewards? Employee of the month. What are rewards given for? What is most closely monitored? Control Systems Organizational structures How tall/flat? How much centralization is there? Power structures Does news in the Co. focuses on successes or failures? Stories What assumptions are taken for granted? The Paradigm #8 Model: Johnson and Scholes Key Drivers of Change in the business environment Rituals and routines Symbols Market Globalization Cost Globalization Global competition Worldwide customers. Facilitated mainly by the internet Worldwide suppliers. Being able to get products and services from anywhere in the world Worldwide competitors/rivals

In addition to these if you have a UK Company use: Economic Environmental Legal Conditions are they are at the time of the exam The move towards more environmentally friendly products Minimum wage for unskilled labor

ENVIRONMENTAL ISSUES #9 Model PESTEL How to analyse the Macro Environment P E S T E L Political Economic Social Technological Environmental Legal Govt.s policy on education & infrastructure State of the economy, interest rates & tax levels Attitudes, demographics and household structures New technologies making current products obsolete The move toward environmentally cleaner products Changes in law making it harder or more expensive to operate

#10 Model - Porters 5 Forces Competitors (new) Competitors (existing) Customers Suppliers Substitutes Entrants of new competitors cause prices to drop To prevent new entrants barriers to entry are needed (high fixed costs or high capital requirements) Lots of rivalry would cause profit margins to be lower. Market growth is usually slow. Powerful customers prevent companies from increasing prices or implementing other changes Powerful suppliers cannot be stopped from increasing the cost of their supplies Substitutes are of three types: Direct, Indirect and Monetary Direct customer buys the same product from another company Indirect customer buys a substitute product for the original one Monetary customer buys a product that is not similar to the original. E.g takes a vacation instead of purchasing a TV.

#11 Model Porters National Diamond Reasons why companies in certain countries are more competitive (successful) than others. Factor Conditions Natural resources timber, raw materials Climate (some products can only grow in some countries) Communication infrastructure (roads, bridges etc.) Knowledge bases and logistic systems Attitude to short term profits National culture Level of domestic rivalry Market segmentation of home market Sophistication of buyers (Japanese demand high quality vehicles) Position within product life cycle in home market Anticipation of buyer needs Strengths of suppliers Quality of suppliers

Firm Strategy Structure & Rivalry Demand Conditions

Related and Supporting Industries

Porters national diamond must only be used when a company is moving to another country. Will it gain or lose benefits?

STRATEGIC CAPABILITY #12 Model: The nine M Model Nine possible areas where an organization can be strong: Machinery Money Materials Men and Women Makeup (culture) Markets Management information Management Methods (processes)

#13 Model: Porters Value Chain Porter divides a business into nine different areas: The five primary activities: (What customers are interested in) Inbound logistics e.g. JIT system Operations Manufacturing the products Outbound logistics Getting the products to the customers Marketing and Sales After sales service Service The four secondary activities: (what happens at Head Office) Firm infrastructure How is the Co. organized? Tall/ flat Human Resource mgt. The quality of staff Technology Development Technology is anything that is not people Procurement Buying the things that we store. Economies of scale Who our suppliers are etc.

#14 Model Porters Value Network This is an extension of the value chain to include customers and suppliers. For example: Customers retailer selling low priced basic products. The customer value chain will place heavy emphasis on low cost inbound logistics means that

The manufacturers value chain should emphasize low cost production means that

The manufacturer will choose suppliers whose value chain emphasize low cost materials.

#15 Model: The product Life Cycle Introduction Growth Maturity Senility Low sales and the problem of attracting new customers Product grows in popularity. May enter new markets Profits at their highest but may have many rivals Sales fall to zero

#16 Model Nanaka and Takeuchi Tacit and explicit knowledge Tacit knowledge is knowledge that staff possesses Explicit knowledge is knowledge that has been recorded by the organization Nanaka and Takeuchi say knowledge can be transferred by: Socialization informal exchanges/discussions where knowledge is shared Externalization Formal. The knowledge is documented or recorded. Internalization using own ideas to Combination putting together different areas

STRATEGIC OPTIONS: #17 Model: Ansoffs Growth vector matrix


Existing Markets New Markets

Product Development

Diversification - Direct - Indirect

New Products

Market Penetration

Market Development

Existing Products

#18 Model: Porters Generic Strategies One possibility is to change how the company competes. Porter describes three possibilities: Being the cheapest within a category Cost Leadership Being the best within a particular category Product differentiation Focusing on a particular type of customer #19 Model: Johnson and Scholes Strategic Clock Strategies can be placed on a clock 1 No frills Low price 2 3 4 5 6 7 8 Low price Hybrid Differentiation Focused differentiation Failing strategy Failing Stretegy Failing Strategy Low Price Low price Medium Price High Price High Price High Price Medium price

Low added value Medium added value High added value High added value Medium added value Medium added value Low added value Low added value

Used for market entry need a great deal of customers who are price conscious

Use cost leadership to provide a better value product than rivals Needs low cost base (economies of scale). Can be used short term for the market entry or to build up market share. Aim is to build up market share by charging reasonable price Looks for high premium for high degree of differentiation

#20 Model: The BCG Matrix


Low High

Market Share Question mark Stars

High

Market Growth Dogs


Low

Cash Cows

STRATEGIC CHOICE: #21 Model: Johnson and Scholes - Strategic Rationale The three ways that Head Office can create value in the business These businesses find undervalued companies, acquire them and then aim to Portfolio Managers Synergy managers Parental developers
improve profitability. These businesses look for synergy between existing and future SBUs. These companies look to use the competencies based at Head Office, such as tight financial control, to improve the performance of all SBUs.

#22 Model: The Ashridge Portfolio Model This model links with the Strategic Rationale Model to see which divisions are the most useful to keep and which should be closed or sold off. Feel
(How much overlap between the CSFs of the division and the parent) High Benefits/Low Field High Feel/High Benefits

Value Trap
(business may not be of benefit unless the parent can develop its skills) Low Field/Low Benefits

Heartland Business
(Parent should concentrate on these businesses) High Feel/Low Benefits

Alien Business
(should be sold out)

Ballast Business (parent should leave business to


run on its own)

#23 Model: Johnson and Scholes SFA test Johnson and Scholes suggest that for any option to be considered seriously it must pass three tests. Suitable Feasible Acceptable

MARKETING: #24 Model: Value Based Marketing #25 Model: The Marketing Mix The marketing mix states that once a market segment has been identified then the following needs to be decided. Product Price Place

IMPROVING BUSINESS PROCESSES #26 Model: Hammer and Champy Business process re-engineering (BPR) The ideas behind BPR are: Managers try to see how processes affect each other Try to think of one continuous process from when the customer makes contact with the company until payment is received This long process can then be broken down into a number of smaller processes IT can be used to make processes more efficient /effective Look at the processes from the customers point of view #27 Model: Rummler and Brache Gaps and Disconnects The emphasis in this model is on the problems involved when different department need to communicate. This identifies three levels where problems occur. The organization as a whole The process The job They also divide the types of problems into three kinds: Those to do with departments trying to pursue different goals Those to do with processes being poorly designed or being implemented poorly Those to do with processes being managed poorly

#28 Model: Harmons Process Strategy Matrix There are four approaches to change depending on: Is the process strategically important? (does it tie up with SWOT?) Is the process complex? This leads to High Importance/Complex processes focusing on staff High Importance/Simple - Use an automated ERP solution Low Importance/Complex Outsource Low Importance/Simple Automate

Low

Complexity ERP
(Bespoke Enterprise Resource Planning System) High Importance/Low Complexity

High

STAFF
(make sure they are able to do it) High Complexity/High Importance

AUTOMATE (off the shelf system)


Low Complexity/Low Importance

OUTSOURCE (Marketing. IT) High Complexity/Low Importance

#29 Model: Skidmore and Eva Stages in selecting software When a company decides to purchase a specially written package (bespoke model) there are five stages it goes through. Obtain tenders First pass selection Second pass selection Implementation Managing long term relationships

E-BUSINESS: #30 Model: Mc Farlands Grid This looks at how important IT is to the organization in particular how it can help with the organizations strategy The grid looks at: The impact of current IT systems on gaining an advantage The potential impact of future IT systems on gaining an advantage
Current High/Future Low Current High/Future High

Factory Position
Current Low/Future Low

Strategic
Future High/Current Low

Support

Turnaround

# 31 Model: Nolans use of IT within the organization Nolan argues that organizations go through six distinct stages in their use of IT Initiation use of IT for support functions Contagion rapid and uncoordinated growth in the use of IT Control senior management attempt to control the use of IT, often preventing new developments Integration IT hardware is used to support the organizations strategy Data Administration the emphasis switches to using information and knowledge rather than the technology Maturity IT and information are used to support the organizations strategy Like with all other types of strategy we should ensure that any approach to e-commerce is Suitable Feasible Acceptable #32 Model: The 6 Is of e-marketing Interactivity Integration Intelligence Industry Independence Individualisation

#33 Model: Adcocks guide to Customer Relationship Management (CRM) In order to build relationships with customers, businesses need to: Build a customer database Develop customer oriented service systems Have more direct contacts with customers #34 Model: The customer life cycle The relationship with customers goes through four stages. Customer selection what type of customer do we want? Customer acquisition pursuing the customer to buy for the first time Customer retention keeping the existing customers by continually meeting their needs Customer extension persuading existing customers to buy more through: o Upgrading to newer versions o Upgrading to more expensive versions o Cross-selling

PEOPLE IN ORGANISATION: # 35Model: Mintzbergs Structural configurations Mintzberg divides the organization into six areas: Ideology the culture of the organization Strategic Apex senior management Middle Line middle managers Operating core employees directly involved in the production of goods and services Technostructure providing technical support Support staff providing general support Mintzberg then classifies organizations based on which of the areas are most important Machine bureaucracy operating core is the most important Simple structure strategic apex is the most important

# 36 Model: Hackman characteristics of job enrichment Range of skills and talents Task closure Task significance Autonomy Feedback Japanese management This includes a number of techniques: Total Quality Management (TQM) Cellular manufacturing where multi-skilled teams of workers are responsible for the complete assembly of something Just-in-time manufacturing Job re-engineering This is simply the change in the tasks of an individual after the business processes have been re-engineered. This is likely to be significant if IT is being used to radically alter the process.

PROJECT MANAGEMENT #37 Model: Tuckmans stages of Group Formation Forming Storming Norming Performing #38 Model: Belbins Personality Mix Co-ordinator Shaper Plant Monitor-evaluator Resource-investigator Implementer Team worker Finisher

CHANGE AND DEVELOPMENT #39 Model: Johnson and Scholes Types of Change There are two aspects to change: The scope of the change minor or fundamental The nature of the change gradual or sudden Johnson and Scholes then classify change as: Adaptation minor and gradual Reorganization minor and sudden Evolution fundamental and gradual Revolution fundamental and sudden

#40 Model: Balogun and Hope Hailey Acceptance of Strategic Change Fundamental change is likely to be resisted unless there are good reasons for stakeholders to accept it. Balogun and Hope Haley list the contextual features which stakeholders will consider: Time is the organization in a crisis or is there time for gradual change? Scope will many people/divisions/depts.. be affected or just a few? Preservation are there processes, competences and staff that will need to be retained? Diversity different parts of the business may have their own culture and interests. Will the proposed change impact on these? Capability do senior mgt. have the knowledge and experience to deal with change? Capacity does the organization have the resources required to undertake the change? Readiness are the key stakeholders aware of why change is needed and are they likely to accept it? Power can senior managers force change even if it is against the wishes of other stakeholders?

They argue that it is necessary to answer all the above questions before change is implemented.

#41 Model: Lewins Force Field Analysis Lewin identifies that there are always two forces at work whenever change is being considered: Driving Force Restraining Force

He argues that change will not take place unless the driving force outweighs the restraining ones. To do this: Build up the driving forces Reduce the restraining forces

#42 Model: Maurik Qualities of the Transformational Leader Leaders in a dynamic environment need to: Change from within Empower others Work with teams Provide clarity of direction To be visionary

#43 Model: Lewins 3 step process Lewin identifies that three stages are necessary for something to change Unfreeze it must be accepted that change is needed Change the change takes place Refreeze it should be made difficult to go back to the earlier position

#44 Model: Johnson and Scholes - Approaches to Change Management The approaches to change management are: Participation involving employees directly in decision-making Coercion forcing employees to accept change Negotiation employees and employer bargain over approach and goals.

In addition: Education mgt explain what is happening and why Support mgt provide counseling and other services to help individuals

Finally: Manipulation mgt. only tell employees information which supports change, not telling them information which would build resistance.

#45 Model: Johnson and Scholes management of Turnaround The seven elements to successfully turnaround a company are: Crisis stabilization stop things from getting worse Changes to management fire some managers Communication with stakeholders tell them the what and the why Attention to target markets Concentration of effort concentrate on core business Financial restructuring turning debts to equity Prioritization do most urgent things first