1. Key Stakeholders
A stakeholder is any person or group that has an interest in a company and can affect or be affected by its actions.
Mendelow's Matrix:
A tool to analyze stakeholders based on their Power and Interest.
- High Power / High Interest: Manage Closely (e.g., CEO, major investors).
- High Power / Low Interest: Keep Satisfied (e.g., Government, Banks).
- Low Power / High Interest: Keep Informed (e.g., Employees, Vendors).
- Low Power / Low Interest: Monitor (e.g., Media, general public).
2. Strategic Drivers
These are the core components that differentiate a company and drive its performance.
- Industry & Markets: Understanding your position relative to competitors (e.g., using Strategic Group Mapping).
- Customers: Knowing who buys your product vs. who uses it (Customer vs. Consumer).
- Products/Services: Managing your offerings, branding, and pricing.
- Channels: How you sell and deliver your product (e.g., retail stores, online, direct sales).
3. Core Competencies
A core competency is a unique set of skills or technologies that gives a company a key advantage. It's what the company does best.
Think of Honda's expertise in engines, which they apply to cars, motorcycles, and lawnmowers.
To be a core competency, a capability must be:
- Valuable, Rare, Costly to Imitate, and Non-substitutable.
4. SWOT Analysis
A classic tool that combines internal and external analysis.
- Strengths (Internal): What do you do well? (e.g., Strong brand).
- Weaknesses (Internal): Where do you need to improve? (e.g., Outdated technology).
- Opportunities (External): What market trends can you exploit? (e.g., A growing market).
- Threats (External): What obstacles do you face? (e.g., New competitors).
5. Competitive Advantage
A company has a competitive advantage when its profitability is higher than the industry average. It's about being unique and superior.
How to sustain it?
- Durability: How long does it last?
- Transferability: Can rivals easily buy it?
- Imitability: Can rivals easily copy it?
- Appropriability: Who gets the profits from it?
6. Strategy: Cost Leadership
This strategy is about becoming the lowest-cost producer in the industry for a broad market.
It requires a relentless focus on efficiency, low overheads, and cost control.
Classic Example: Walmart. Their massive scale and efficient supply chain allow them to offer "Everyday Low Prices."
7. Strategy: Differentiation
This strategy involves creating a product or service that is perceived as unique across the industry.
This uniqueness allows the company to charge a premium price.
Classic Example: Apple. They differentiate through design, user experience (iOS), and a strong brand image, allowing them to command high prices.
8. Strategy: Focus & Best-Cost
This strategy targets a narrow market segment or niche.
Two variants:
- Focused Cost Leadership: Low cost in a narrow market (e.g., a local, no-frills grocery store).
- Focused Differentiation: Unique product for a narrow market (e.g., Ferrari makes high-performance cars for a very specific customer).
A Best-Cost Provider strategy tries to blend low cost with differentiation.