Top Business Strategy Frameworks

A set of successful business frameworks lies behind every successful business strategy consultant. This basic fact explains why “business frameworks” is such a broad term. For the modern corporate strategy consultant, there are hundreds of frameworks and tools to choose from.

Where do I begin? We’ll keep things basic in this post. Because, at the end of the day, as a company strategy consultant, you get out what you put in. That is, a handful of business strategy frameworks are all you need when used with rigor and consistency. In this article, we’ll look at some different business strategy frameworks:

What Business Frameworks Do Business Strategists Employ?

A business strategy consultant can use business frameworks to assist them think through important decisions like product, markets, resource allocation, competitive advantages, and more. A consultant can design a plan or outline using these frameworks and tools to help the organization achieve its objectives.

Business strategies can take many forms, but they always have one thing in common: they assist a firm in determining where it needs to go and how it intends to get there.

What Is the Importance of Business Strategy Frameworks?

Consider a business strategy framework to be a road map for a company’s success. You wouldn’t know where to go if you didn’t have one! Frameworks and methods for strategy development are essential for planning, also, identifying business possibilities, identifying company vulnerabilities, and determining how to maximize a firm’s potential.

Who should be in charge of creating strategy frameworks and tools?

Corporate strategy frameworks are beneficial to all levels of business leaders and managers. Most successful businesses have an overarching business plan that directs the company’s overall course. This high-level plan will most likely be developed by business strategy consultants in collaboration with top management and C-suite executives.

Business strategy consultants can use business strategy frameworks at a more granular level to guide their own teams and departments in ways that correspond with the overall corporate strategy. As a result, any manager making significant decisions that have a direct impact on business outcomes should pay attention to business strategy.

To Get You Started, Here Are the Business Strategy Frameworks

Navigating “best practices” when it comes to building a business strategy might be a bit of a rat race once again. For example, there are a dozen distinct ways to do competition analysis, and most frameworks are the same. Moreover, our goal is to provide you with a springboard to build your own business strategy consulting career using some of our favorite business frameworks.

• Competitor Analysis

Whether you’re just starting a firm or trying to reevaluate an existing one, a competitor study is a great location to start establishing a business strategy. A competitor analysis entails looking at the market as well as the space’s direct and indirect competitors.

Business executives can discover how competitors develop their own products, how they sell those products, and where the market is under or overserved by conducting a competition study. From there, you can plan for new product development, product sunsetting, pivoting possibilities, marketing, and sales concepts, and more. In competitor analysis, the discoveries that can be made are practically limitless.

• Five Whys

Five Whys is a problem-solving and root-cause analysis technique that can be used in a variety of scenarios. The concept is simple: ask “Why?” five times to go deeper into the problem’s fundamental cause. Here’s an example of how Five Whys might work in practice:

Problem: A company missed its sales target by 30%.

Five reasons:

1) Why did the company fail their sales target by 30% in the second quarter? Sales of businesses have plummeted.

2) What caused a significant reduction in enterprise sales? Leads were not efficiently converted by the sales staff.

3) What went wrong with the sales team’s lead conversion? The Account Executives were perplexed by the company’s new pricing approach.

4) Why were the Account Executives perplexed by the company’s new pricing model? No specific training on how to sell using the new pricing model was provided.

5) Why was there no formal sales training for the new price model?

Sales leaders placed a higher priority on the speed with which new pricing was implemented than on training.

So… What happened? The company fell short of its sales target by 30%, and the reason for this was that the sales force was ill-equipped to sell the company’s enterprise offering. Moreover, the solution becomes evident after asking the Five Whys: the sales crew has to be adequately trained on how to navigate and sell with the new enterprise pricing model.

• Porter’s Five Forces

Michael E. Porter, a Harvard Business School professor, established Porter’s Five Forces concept. Also, every market or industry, and hence every firm or organization, has five “forces,” according to the framework. Understanding market attractiveness, prospective profitability, competitive levels, and logistical limits require a thorough examination of Porter’s Five Forces as they apply to your organization. The five forces are as follows:

1) The possibility of substitutions

2) The possibility of new entries

3) Suppliers’ power

4) Buyers’ power

5) There is competition.

Any one of these five forces can provide significant benefits or drawbacks to businesses. Take the “power of suppliers” force, for example. Some of the world’s most advantaged corporations are vertically integrated companies that have managed to completely eliminate suppliers. Consider Ikea or Target, which both establish and maintain their own brands, giving them complete control over the supply chain. These companies, according to Porter’s Five Forces, may not be completely safe against new alternatives or market entrants, but they’ve established a significant lead over the competition by focusing on one of the other forces.

• Value Chain Analysis 

Because, well, it’s another Michael Porter framework, Value Chain Analysis is a perfect follow-up to Porter’s Five Forces. This one can get a little more complicated, but it’s a nice contrast to the Five Forces because it’s more contemplative (it focuses more on the company as opposed to the market).

A value chain is a diagram that depicts all of the procedures, actions, and resources involved in creating something of value, such as a product or service. Simply said, the purpose of a Value Chain Analysis is to assess the effectiveness of the value chain with the goal of identifying ways to create the product or service more cheaply, hence increasing the profit margin.

A value chain is made up of several “activities” that are necessary for the manufacture and maintenance of most products. Operations, procurement, marketing and sales, HR management, and other operations are examples. While certain “activities” are focused on the product (Sales & Marketing), others are focused on the people (HR Management), all of which are vital for the successful execution of a product.