1) Strategic Diamond

Basic formulation for a good strategy starts with the Strategy Diamond by refining the
elements of the strategy. To integrate the strategy intended you should be able to
answer all questions of the 5 elements:

Arenas: where will we be active?

Vehicles: how will we get there?
Differentiators: how will we win in the marketplace?
Staging and pacing: what will be our speed and sequence of moves?
Economic logic: how will we obtain our returns?

Arenas are the areas in which a firm will be active. Hereby we focus on which
product categories, channels, market segments, geographic areas, core technologies
and value-creation strategies?
Vehicles are the ways of getting to the arenas a firm intended. Here it makes sense
to look at internal development, possible joint ventures, licensing, alliances and
acquisitions.

Differentiators are the ways of being better and more appealing than rivals
(competitive advantage) by differentiating features of the product like image,
customization, price, styling, product reliability and speed to market. These
decissions are important, should be made early and are sometimes at the cost of
certain trade-offs.

Staging and pacing are speed of expansion and sequence of initiatives.

Economic Logic are the means by which a firm will earn a profit, by different
versions of using low cost production or premium prices.

2) SWOT analysis

The SWOT analysis is an internal and external based view of a firm and its
surroundings. It looks at the different Strenghts, Weaknesses, Opportunities and
Threats of a firm. In this model the Strenghts and the Opportunities are inextrectibly
linked with each other for a strenght is of no use without the opportunity. Same goes
for Weaknesses and Threats as a weakness is only of real danger when there is a
certain threat.

Internal Strenghts: Weaknesses:

view Good resources and cababilities
that may help a company reach its
objectives.
External Opportunities:
view Favorable external factors for the
company so it may be able to
exploit to its advantage
Internal limitations that may
interfere with the companys
ability to achieve its objectives.
Threats:
Current and emerging external
factors that may be infavorable for
the companys performance.

3) VRINE analysis
The VRINE model can be used to detect wheter a resource, capability or alliance
can be used to gain competitive advantage. When a resource or capability is deemed
useful for a competitive advantage, the firm can see by VRINE wheter or not is is
sustainable.

Valuable? Does it meet market Potential to contribute to

demand? normal profits
Rare? Is it scarce or also owned Temporary competitive
by competitors? advantage and above-
normal profits.
Inimitable or Can it be imitated or Above-normal profits for
Nonsubstitutable? substituted by extended periods of time
competitors?
Exploitable? Can the firm actually Relative lower
exploit it? performance if not
exploited

VRINE works differently for alliances. When used for alliance comparison one must
look at the following questions:

The alliance generates competitive advantage if:

Rivals cannot ascertain what generates the returns

Rivals can figure out what generates the returns but do not possess those
resources

Rivals cannot imitate practices or investments because they are missing

complementary resources

Rivals cannot find a partner with the comparable complementary strategic

resources

Rivals cannot access potential partners resources because they are indivisible

4) PESTEL analysis

The PESTEL anaalysis is used to identify influences around macro environment,

meaning an external based view. A firm can sketch alternative influences as well as
being prepared for several futures in which it operates, based on the 6 influences:

Political: focus is stability of political environment, local taxation policies,

government involvment in trading agreements (EU/NAFTA), foreign trade
regulations and social wellfare policies and most importantly, how these
factors affect the firms buisiness.

Economical: focus on current and projected interest rates, inflation, local

employment levels (and how are they changing), exchange rates rates
 between critical markets and how these factors will affect production and
distribution of your good

Socio-cultural: focus on local lifestyle trends, current and changing

demographics, level and distribution of education and income, dominant
religions, level of consumerism and popular attitudes toward it, legislation and
how these affect corporate social policies.

Technological: focus on level of research funding and possible change,

governments level of focus and interest on technology, status of intellectual
property issues and potential disruptive technolgies.

Environmental: focus on local environmental issues, pending ecological

issues, international pressure groups, environmental protection laws and
regulations regarding waste disposal and energy consumption. The relevant
issues should be looked in to carefully if they can negatively influence your
company.

Legal: focus on regulations regarding monopolies and private property, legal

protections of intellectual property, relevant consumer laws and status of
employment, health-and-safety, and product-safety laws. Again, how these
legal environment affect your buisiness is important.

5) Porters Five Forces analysis

The Five Forces model consists of 6 (originally 5) forces which define the state of the
industry environment, thus again we are dealing with a external view based
analysis.
Threat of New Entrants: the degree of firms being able to join the industry. Higher
Entry Barriers result is fewer rivals and a lower degree of rivalry which then
potentially results in higher profits. A few factors include:
- Absolute cost advantage
- Acces to inputs
- Capital requirements
- Economies of scale
- Switching costs

Supplier Power: the degree of which suppliers are able to bargain for higher prices
at the cost of a firms profit. With few suppliers, degree of supplier power is higher.
Factors include:
- Supplier concentration
- Threat of forward integration
- Cost relative to total purchases
- Importance of volume to supplier

Degree of Rivalry: pretty straight forward title. Higher degree of rivalry results in
lower profits and possible price-wars in which companies both lower their prices to
attract consumers but at the cost of lower profits overall. Factors:
- Exit Barriers
 - Industry concentration
- Industry growth
- Switching cost
- Product difference
- Diversity of rivals

Buyer Power: opposite of supplier power. Degree in which consumers are able to
influence prices to their benefit, in addition to the lower profits of a firm. Factors:
- Buyer concentration
- Importance of volume to customer
- Presence of substitute inputs
- Threat of backward integration
- Differentiaton of inputs

Threat of substitutes: degree in which other products are able to substitute your
product. A higher degree of substitutes means the cost of your product should not be
too high, otherwise consumers would switch to the substitute. Factors include:
- Switching costs
- Buyer inclination to substitute
- Price-performance tradeoff
- Variety of substitutes
- Necessity of product/service

Complementors: a little sub-force which boosts the profits of a product, whereas the
other 5 forces will only be of negative effect for the companys buisiness.
Complementers complement your product, simply by being related to usage of
another product. (Iphone+Bose). A few factors include:
- Number of complementors (of course)
- Relative value added
- Barriers to complement entry
- Buyer perception of complement
- Complement exclusivity

(When choosing an alliance partner, a firm can look at the Five Forces. Any
participant of one of the forces is a good possible alliance partner!)

6) Value Chain (analysis, kind of)

The Value-chain is used to identify the strategic surroundings in a firm, an internal
based view dus. We use this to see which primary activities are of good use and
which support activities are of good use.
TOEPASSING

- Zoek bij de casus het bijpassende model op, behorende bij de kernwoorden
van elk model en vermeld welk model je gebruikt!
- Kijk naar de plus punten en min punten van de onderdelen van een bepaald
model.
- Noem en beargumenteer de punten en weerleg ze indien nodig
- Schrijf een duidelijke conclusie waarin het totaalbeeld naar voren komt (noem
geen nieuwe argumenten in de conclusie).