Strategic Management: Analysis, Choice and Implementation
From analysis to choice
Strategy questions test the process: where are we now, where do we want to be, how do we get there. Be fluent with the toolkit - PESTLE for the macro-environment, Porter's Five Forces for industry attractiveness, the value chain and the resource-based view (VRIO: valuable, rare, inimitable, organised) for internal capability, SWOT/TOWS for synthesis, and Ansoff and BCG for direction and portfolio.
Traps that lose marks
- SWOT is a list; TOWS converts it into options. A question asking for 'strategic options' wants SO/ST/WO/WT pairings, not a repeated SWOT.
- Five Forces means five: new entrants, substitutes, buyer power, supplier power, rivalry. Complements are sometimes called a sixth force but are not part of Porter's original model.
- BCG axes are relative market share (against the largest competitor) and market growth. A 'cash cow' is high share/low growth and generates cash; a 'dog' is low/low. Questions frequently invert these.
- Porter's generic strategies demand a clear choice; 'stuck in the middle' is the failure mode, with hybrid and blue-ocean thinking as the modern counterpoint.
- Mintzberg: realised strategy is usually a blend of deliberate and emergent, so 'the plan said X' does not prove X happened.
Worked example
A firm holds 40% of a market growing at 2%, while the leader holds 50%. Relative share = 0.8, which is not high. Low growth plus relative share below 1 places the business in the dog/cash-trap box: harvest or divest, do not 'invest for growth'.
Rule of thumb: name the tool, apply it to the case facts, then state the implication. Marks come from the 'so what', not from the definition.