Both economic and legal basic conditions force organizations to act efficiently in fulfilling corporate requirements. Factors influencing corporate requirements are fiscal, epidemiological, demographic and technical developments. Time and product quality can be additional objectives. Thus, any organization inevitably interacts with its environment. To achieve desired corporate goals, a strategic master plan that evaluates significant key figures is laid out and implemented by the organization’s management team.
Every strategic discussion begins with an audit that systematically reviews the current efficacy of a business situation in its entirety. Typical questions include the following: “How well does the corporate strategy work for the specific company as a whole, and for its individual business units?”, “Does the strategy gather information and opinions appropriately, and does it help implement strategic measures that win support and, ultimately, result in growth?”, “Does it fail in certain areas?”, “If yes, what are the reasons?”
Table of Contents
Introduction
External Analysis
1.1 Markets
1.1.2. McKinsey/GE Growth Share Matrix
1.2 Customer needs
1.3 Industry structure
1.3.1 Porter’s five Forces
1.3.2 Value Chain Analysis
1.4.Product structure
1.4.1Product breakdown
1.4.2.Product structure views
Internal Analysis
2.1. Resource Audit
2.2. Core Competence Analysis
2.3. Performance Analysis
2.4 Portfolio Analysis
2.5 SWOT Analysis
Objectives and Core Topics
The primary goal of this paper is to provide a structured overview of fundamental strategic and analytical management tools. It aims to demonstrate how organizations can effectively evaluate their environment and internal capabilities to develop, implement, and maintain a successful long-term business strategy.
- Strategic audit processes and business environment analysis
- Customer-driven marketing strategies and value perception
- Industry structure assessment using Porter’s Five Forces
- Operational and structural analysis of products and value chains
- Internal resource evaluation and portfolio management models
Excerpt from the book
1.3.1 Porter’s five Forces
Well known popular model for industry analysis,
In the early 1980`s Michael E. Porter developed the model of Five Competitive Forces that nowadays become a very important management tool for assessment of an organizations industry structure and the strategic processes within.
The basic theory is that a corporate strategy should meet the opportunities and threats in the organizations external environment. Porter’s model is based on the insight, competitive strategy should base on and understanding of variety industry structures and the way they change.
Porter has identified five competitive forces that shape every industry and every market. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization. Porter’s model supports analysis of driving forces in an industry. Based on this data management can decide how to influence or to change particular characteristics of their industry.
Summary of Chapters
Introduction: This chapter outlines the necessity for organizations to align with their economic environment through strategic planning and systematic audits.
External Analysis: This section details models for assessing market attractiveness, customer requirements, and the competitive landscape of an industry.
Internal Analysis: This chapter focuses on auditing a company's internal resources, core competencies, and overall strategic portfolio to ensure competitive advantage.
Keywords
Strategic Management, External Analysis, Internal Analysis, Porter's Five Forces, Value Chain Analysis, McKinsey/GE Matrix, BCG Portfolio Matrix, SWOT Analysis, Customer Needs, Core Competencies, Market Attractiveness, Competitive Strength, Business Strategy, Resource Audit, Corporate Goals.
Frequently Asked Questions
What is the fundamental purpose of this work?
This document serves as an overview of essential strategic management tools used to audit business situations and inform decision-making processes.
What are the central themes covered in the text?
The text covers two main pillars: External Analysis, which looks at markets and industry structures, and Internal Analysis, which examines resources and strategic capabilities.
What is the primary objective of a strategic audit?
The objective is to review the current efficacy of a business in its entirety to determine if current strategies are meeting organizational goals and to identify areas for potential growth.
Which scientific methods are primarily utilized?
The work utilizes established analytical frameworks including Porter's Five Forces, the McKinsey/GE Growth Share Matrix, the BCG Portfolio Matrix, and SWOT Analysis.
What is the focus of the main body of the text?
The main body breaks down the strategic audit process into market analysis, customer needs assessment, value chain analysis, and internal resource evaluation.
How would you characterize this work with keywords?
The work is characterized by terms like Strategic Management, Competitive Strength, Value Chain Analysis, and Business Audit.
How does the McKinsey/GE Matrix differ from the BCG matrix?
The McKinsey/GE matrix replaces "market growth" with "market attractiveness" and "market share" with "competitive strength" to provide a more comprehensive view.
What is the significance of "Customer Perceived Value" (CPV)?
CPV is defined as the difference between a customer's evaluation of all benefits and the total costs, serving as a key driver for building long-term customer loyalty.
Why is the concept of "Product Structure" included?
It is included to demonstrate how physical aspects and product hierarchies are modeled and managed to maintain consistency and change history within an organization.
What are the four quadrants of the BCG Portfolio Matrix?
The quadrants are Stars, Cash Cows, Question Marks, and Dogs, which help categorize business units based on their market share and growth potential.
- Quote paper
- Dr. Kadir Yilmaz (Author), 2009, Basics of major strategic (and analytic) tools, Munich, GRIN Verlag, https://www.grin.com/document/135955
