Business models and frameworks used to improve organizational performance through alignment to the broader business strategy These help understand company’s competitive position including internal and external forces, firm’s maturity and customer base. The below frameworks and diagrams are widely used by top consulting firms, corporations, business schools and MBA students
Bullwhip effect (or Whiplash Effect) is a recurring phenomenon in inventory management and order demand forecasting. The orders to upstream members of the supply chain (e.g. producers of raw materials) exhibit greater variance than actual orders demanded by the end consumers.
The below graphic demonstrates the variance between retails sales and orders shipped by manufacturers to distributors due to seasonality.
The variance grows with each additional member of the supply chain.
Business Model – Business Model Development – Business Model Analysis – Business Model of a company involves a number of characteristics. The business model development consists of the following stages and answers the following fundamental business questions: how will I make money, how will I sell products, how will I manufacture the product or how will I deliver the service, where in the supply chain will I be, is my business disruptive to the existing players, am I creating a new way of conducting business, how do I plan to engage the market?
Answering these basic business questions will help you develop your company’s business model.
Strategy Matrix – Strategy Matrix Analysis – Strategy Framework – Many strategy analysis frameworks have been developed over the years. The strategy matrix tries to define the outcome of the various strategies by identifying whether the activities facing the firm are core vs. critical vs. commodity and whether a firm wants to produce, partner or purchase the good from another supplier.
If a firm defines something as its core, i.e. the ultimate strategic value, then it should not purchase this service from another supplier, otherwise it is risking to lose the competency. The matrix effectively tells you whether the strategy is a good one depending on the type of activity and purchasing strategy.
Value Net – Value Net Analysis – Value Net is a business framework that recognizes relationships between a company, its competitors, customers, suppliers and complementors (i.e., complementing products). This methodology focuses on competitive analysis and is somewhat similar to Porters Five Forces. Value net framework emphasizes linkage between the key competitive forces and firm’s complements.
The framework helps identify rivals, partners, suppliers, customers and connections between them, including competitive dynamics and power relative to the key players in the industry. Overall, Value Net model is a good approach to solving business problems in relation to company’s competitive position.
Growth Strategy Matrix – Growth Strategy Matrix Analysis – Growth Strategy Matrix Framework – Growth Strategy Matrix Business Methodology – Growth strategy model prescribes a type of strategy depending on whether the markets are existing or new and whether the product is existing or new.
The four growth strategies are: market penetration, market development, product development and diversification. When market is fully penetrated, it is advised for businesses to either proceed with the market development for existing product or product development for existing market. Diversification is usually difficult to achieve. Below matrix identifies various growth strategies and gives examples of real businesses.
Sales Strategy – Sales Strategy Analysis – Sales Strategy Framework – Sales Strategy Business Methodology – Sales Growth Strategy model helps a business to grow its revenues. There are a number of strategies that can be used to achieve sales growth; these include: increasing sales per customer, stealing customers from competition, expanding to new markets and developing new products.
Each of the above strategies has its own implementation plan. For example for increasing sales per customer this includes offering bulk discounts and expanding loyalty programs. Below diagram outlines various sales growth strategies.
Motivation, defined in relation to employees in the workplace, is the extent to which persistent effort is directed towards a goal. The different factors motivating employees at work can be further subdivided into two broad categories – extrinsic and intrinsic. Extrinsic motivation stems from the work environment external to the task and it is usually applied by others (e.g. regular salary, fringe benefits, cash awards for excellent performance, etc.). Alternatively, intrinsic motivation, is thought to result from the direct relationship between the worker and the task and to come from within (e.g. one’s interest in the task, feeling competent, recognition, etc.).
While certain motivational factors fall clearly within these categories, there is some degree of overlap. For example, receiving a compliment or a promotion from a boss are both examples of extrinsic motivation. At the same time both are targeted at eliciting a positive feeling of competence and/or recognition of one’s achievement, both of which fall under the intrinsic motivation category.Thus, a given motivational event can be part-intrinsic and part-extrinsic.
It is also true that most of the employees are motivated by a variety of factors which are likely to come from both categories. Managers need to be aware of the diversity in the workplace and realize that the same conditions will not motivate everyone. Flexibility to employees’ needs is especially important given the increasing productivity demands placed on modern organizations. To stay globally competitive organizations need to replace rigid systems of rules, regulations and procedures by higher levels of initiative among its employees, which would help deliver greater levels of attention to customer needs. This, of course, requires that employees be motivated to add value by looking for ways to improve their performance as opposed to doing a base-line or even sub-par job.
How does a manager, then, determine what kind of motivation would work best for his or her employees? A few conclusions supported by a review of motivational research may help guide the search for optimal motivators.
First, employees motivated by intrinsic factors feel more in control of their motivation, as opposed to those motivated by extrinsic rewards. This results in more effective performance, especially on complex tasks. Therefore, if a manager’s goal is to solicit a performance improvement that may require the employee to identify and analyze possible deficiencies in their current job, the manager would need to ensure that the employee is intrinsically motivated.
This conclusion relates to the second fact discovered by a review of motivational research. It has been shown, that availability of extrinsic motivation may reduce the intrinsic motivation stemming from the task itself. In other words, when employees believe that they perform well as a result of external rewards, it makes them feel less in control of their own behaviour diminishing the power of the intrinsic motivation.
However, such negative effects of extrinsic rewards occur only under limited conditions and are avoidable. Moreover, in line with the idea of the blurred line between extrinsic and intrinsic motivation categories, when extrinsic rewards are seen as symbols of achievement they increase task performance. Thus, both reward types are important and should be combined to achieve greatest employee motivation in the workplace.
Change Management – Change Management Analysis – Change Management Framework – Change Management Business Methodology – Change management is a step-by-step process that enables an organization to achieve transformation.
Change is painful for the organization, its employees and culture. While in transition, many employees are unhappy, and communication and motivation become key in making sure everyone is aligned with the change and its impact (e.g. technological or process change). Below is an examples of a change management process.
Sustainable Competitive Advantage – Sustainable Competitive Advantage Analysis – Sustainable Competitive Advantage Framework – Sustainable Competitive Advantage Business Methodology – Competitive Advantage is a favorable relevant position of a company in a market place above its competitors. This may include possession of a superior product, better supply chain, talented workforce, etc.
The sustainable competitive advantage is essentially a recurring or continuous favorable position in regards to competitors. Some argue that this is the holy grail of business, something everybody dreams of but no one is really able to achieve unless one is a monopoly in the market and is protected from other market participants. However, this does not mean one should give up trying and if location, operational, product and customer excellence are achieved, at least temporary, the customer value is created and the competitive advantage is achieved.
Project Management – Project Management Analysis – Project Management Stages – Project Management Framework – Project Management Business Methodology – Project Management model is one of the top business frameworks used for managing and leading projects and other kind of engagements. The model brings some structure to the project phases and makes it more organized.
The project stages include initiation, planning and design, executing or implementation, monitoring and controlling, closing. There may be other stages depending on the nature of the work. Work planning varies depending on the resources assigned, project timelines, etc. Below sample images are examples of Project Management stages.
Time Cost Quality – Time Cost Quality Analysis – Time vs. Cost vs. Quality Trade-offs – Time Cost Quality Framework – Time Cost Quality Business Methodology – Time Cost Quality model is one of the business strategy frameworks that states that you can provide a product which is either of low cost, high quality or delivered quickly or a combination of any of the two components. However, because of the trade-offs, you cannot have all three.
This has been disputed somewhat in recent history and many companies are trying to achieve all three. Think of an Apple’s Iphone when it first came out, it was so revolutionary that you could argue that it met all three criteria. New inventions and blue ocean ideas can sometimes break the tradeoffs associated with time, cost and quality and allow for all three to be present as part of one’s product. Below sample images are examples of Time vs. Cost vs. Quality frameworks used in business management.
Customer Lifecycle – Customer Life Cycle – Customer Lifecycle Analysis – Customer Lifecycle Framework – Customer Lifecycle Business Methodology – Client Lifecycle model is a key business strategy tool that shows the customer loop from the very initiation through purchase to advocacy. The importance of this framework is in the fact that the client goes through a number of stages and a business needs to be aware of these lifecycle stages and travel with the customer at each phase. There should be a tactic or a strategy for each of the customer phases that a company needs to think of.
Below sample Customer Life cycle chart is a useful business management tool. The stages include: awareness, knowledge, consideration, selection, buying, satisfaction, loyalty and advocacy.
Porters Value Chain – Porter’s Value Chain Analysis – Porters Value Chain Framework – Porters Value Chain Business Methodology – Porters Value Chain model is an approach developed by Michael Porter to complete an internal analysis of a company focusing on its value chain: its primary and secondary activities. Primary activities include logistics, operations, marketing and sales. Secondary activities include infrastructure, human resources, technology and procurement.
Understanding all of these business processes helps develop a business strategy for the company and improve its operations. Below sample images are examples of Porters Value Chain used in business management.
Priority Matrix – Priority Matrix Analysis – Priority Matrix Framework – Priority Matrix Business Methodology – Priority Matrix model is one of the frameworks that is useful for setting business priorities by categorizing them by their importance and time to completion.
This is very useful not only for one’s business but also personal life. How do you identify the right priorities in life and make sound decisions? How do you make sure that whatever that you spend your time is actually important? Below sample images are examples of Priority Matrix used in business management.
Roadmap – Roadmap Analysis – Roadmap Framework – Action Plan – Action Plan Chart. Roadmap is a company’s action plan to realizing a certain business strategy consisting of concrete steps to be undertaken for realization of business goals and priorities.
Roadmap includes a timeline and intiatives categorized by a certain work stream. Below sample images are examples of roadmaps used in business management.
Business Strategy – Business Strategy Analysis – Business Strategy Framework – Business Strategy
Methodology – Business Strategy model is an approach to developing a company’s strategy and ultimately resolving business problems and creating a unique market position.
The business strategy development process starts with understanding of one’s mission, beliefs and values. Then company needs to understand where it currently stands, e.g. via a conducting a SWOT analysis. Then the company is to set goals and priorities, establish targets and measures and finally develop a roadmap or an action plan. Below sample images are examples of Business Strategy development cycle used by company’s management.
BCG Matrix – BCG Matrix Analysis – Bcg Matrix Framework – Bcg Matrix Business Methodology – Bcg Matrix model categorizes companies and products by the type of market they are in. Matrix has four quadrants divided by the market growth and market share on each of the axis.
Each of the quadrants in the bcg matrix represents a certain market position and is depicted by a symbol a star, which stands for high growth, high market share; the cow (also known as a cash cow) stands for high market share and low growth, a dog for low market share and low growth and a questin mark, which represents high growth but low market share. BCG Matrix developed by the BCG consulting company is one of the top business frameworks. Below sample images are examples of bcg matrix used in business management.
Porters Five – Porters Five Analysis – Porters Five Framework – Porters Five Business Methodology – Porters Five model is one of the top business frameworks allowing managers to make sound decision by evaluating their external environment, including supplier power, customer power, threat of substitutes, barriers to entry and at the center of the model, industry rivalry.
Below sample images are examples of Porter 5 forces used in business management with descriptions of what each of the parts of this model means.
Swot Analysis – Swot Analysis – Swot Analysis Framework – Swot Analysis Business Methodology – Swot Analysis model is an approach to solving business problems that identifies Strengths, Weaknesses, Opportunities and Threats facing a company.
While strengths and weaknesses are internal factors, opportunities and threats are external. Understanding of the SWOT variables helps formulate company’s business strategy. Below sample images are examples of swot analysis used in business management.