For my first proper week of B121, I’ve been looking at models to aid understanding of organisational context, and help reveal factors that could shape strategy.
The models are:
This model helps you think about the environment in which your organisation operates, and enables you to construct a forecast based on the following key factors:
PEST and PESTLE
Similar to STEEP, but focusing more on the following factors for PEST:
and the same again, plus the following for PESTLE:
Porter’s Five Forces
Possibly one of my favourite models for understanding the forces shaping an industry. Porter’s Five Forces looks at:
- The threat of new entrants
- The bargaining power of suppliers
- The bargaining power of buyers
- The threat of substitutes or alternatives
- The rivalry among existing competitors
Porter’s Value Chain
Another interesting model that I have never really looked at before, which is concerned with the activities or functions within an organisation which contribute to the creation of the product or service delivered to customers. The five primary activities are:
- Inbound logistics
- Outbound logistics
- Marketing and sales
- Aftersales service
However, Porter also adds support activites:
- Firm infrastrusture (e.g. finance, planning)
- Human resource management
- Technology development
There is a good diagram in the Manager’s Good Study Guide on p. 205.
I’ve used this one many times before. It’s perhaps one of the most common models to aid understanding of organisational context, and looks at:
The key here is that the SWOT analysis helps to identify an organisation’s strengths and weaknesses, giving a picture of the organisation as it is now. The opportunities and threats give two possible future pictures – one negative, the other positive.
Using the components identified by Porter’s Value Chain model aids the analysis of strengths and weaknesses within SWOT, while STEEP and Porter’s Five Forces model aid analysis of opportunities and threats.
(Source: Tyler, 2007).