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The most popular posts on strategy development and execution in 2018

Happy New Year to you all!

At the end of another year - where does the time go - I took time to reflect on the most popular posts on the Strategic Coffee blog during 2018.

Here they are:

10. What is a SWOT Analysis

Love it or loathe it, the humble SWOT analysis remains one of the most popular frameworks in the book, coming in in a respectable 10th place. See also 11 techniques to help you do a better SWOT analysis and The consistently popular SWOT analysis.

9. McKinsey 7S Case Study

This is the only case study we've ever blogged. Client confidentiality usually prevents us from writing case studies, but this one was kindly submitted by a reader. Perhaps you have another you'd like to share with us?

8. The BCG Matrix

The BCG Matrix is a portfolio analysis tool which can help you decide which subsidiary business, product or service lines you should invest in, hold or dispose of.

7. Harvey Balls Font

Harvey Balls, sometimes called Booz Balls, are those little circles with 1, 2, 3, 4 or no segments coloured in. They are useful for indicating high/medium/low, or degrees of strength without being as specific as using numbers would suggest. This post provides a link to a font you can install to make them incredibly easy to use in, say, Word, Powerpoint or even Excel.

6. How to use Porter's Value Chain Analysis

At one time, I thought Porter's Value Chain had fallen from favour, replaced by more modern alternatives such as the Business Model Canvas. This post's position on this list suggests otherwise.

5. How to use a RAID log

A RAID log is a staple tool in project management. Here, we adapt it for use as a strategic management tool.

4. Using the McKinsey 7S Framework to assess strategic alignment, strengths and weaknesses

The McKinsey 7S analysis makes a second appearance on this list in position 4. This time, it is a more conventional post explaining how to use it.

3. How to draw a Strategy Canvas in 4 easy steps

The Strategy Canvas, popularised in Blue Ocean Strategy, is a visual tool for differentiating your proposition to set it aside from the competition.

2. How to design a Target Operating Model (TOM)

In an environment where businesses must increasingly compete not just on what they deliver (products and services) but also on how they deliver, Target Operating Models are a key consideration for strategy execution.

1. 9 essential tools for Strategy Analysis

And finally, in the top stop, our ever-popular compendium of the 9 most essential tools for Strategy Analysis. This includes a number of those lower down on this list, plus several more.

In reviewing this list, it strikes me first of all that all of these articles are very practical guides on the basics of how to develop and execute strategy. I think this practical focus is heartening in a subject which can sometimes tend towards the theoretical on the one hand, and the hyperbolic on the other.

Secondly, I notice that many of these articles were written some years ago - albeit that many of them have been updated several times since they were first published.

That may point to the perennial nature of the subject - in a field which is constantly searching for the next big thing, many of the basics of how we do so have not changed terribly much.

But it may also point to the nature of SEO (Search Engine Optimisation). Most of our readers find the blog by searching on Google or Bing and search engines favour content which has been there for a longer time.

Do these posts reflect the kind of content you'd like to read on strategy development and execution? We're constantly looking for new content to keep the blog fresh, so why not let us know what type of content you'd like to see during 2019 by dropping us a note in the comments below? I'd love to hear what you think.

7 techniques and 5 tips for developing strategic options

So, you’ve completed your analysis. You now understand everything there is to know about your firm, the market in which it competes, and how you anticipate the future might unfold. Well, maybe not everything, but as much as you reasonably can.

Now what?

The next step is to develop strategic options for taking the firm forward. Options are simply things you could choose to do or not do.

But how exactly do you do that?

Contrary to popular belief, you don't have to rely on vague notions like 'blue-sky thinking'. Nor must you simply hope that inspiration strikes like a bolt from the blue (although a little inspiration never hurt anyone!) In contrast, there are specific processes you can undertake to develop strategic options.

7 techniques for generating strategy options

There are a number of ways to generate options, for example:

Use Ansoff’s matrix to consider all the possibilities of selling:

existing products to new customers (new geographies, customer segments, etc),
new products to existing customers, or even
new products to new customers (learn more).

Use the innovation templates for a systematic approach to developing new products and services (learn more).
Use Porter’s generic strategies as a framework for choosing between and developing options based on either:

Cost Leadership,
Differentiation or
Focus (learn more).

Add, change or remove a competitive factor on your Strategy Canvas (learn more). This best done using the Voice of the Customer (VOC) off the back of customer research.
Develop options which flow directly from the insights in your SWOT analysis (see below).
For a portfolio of businesses or products, use a BCG Analysis (learn more) or a Pareto Analysis (learn more) to understand and develop your options for shaping the portfolio.
Ask people for ideas (see below).

Developing options from the insights in your SWOT analysis

Weaknesses:

Strengthen your capability or acquire the resources
Partner with some who is strong at it
Avoid it by focusing on customer segments who value it less highly
Discount opportunities which rely on it

Strengths:

Find other products, services or customer segments which rely on it
Promote it to your customers
Target customers who prize it most highly

Opportunities:

Invest in building and using related strengths
Position and promote yourself as a leader in the field
Conceal your intentions so that competitors are less aware of the opportunities

Threats:

Exit or de-emphasis directly affected markets
Capitalise on a competitor's weaknesses in this area
Seek to neutralise it

Look especially for examples where your strengths play into opportunities. And take evasive action where your weaknesses most expose you to threats.

Don't forget to just ask people

In addition to using the other techniques, don't forget the simplest one of all: just ask people what they think you could or should do. You could ask colleagues, customers, distributors, suppliers, and, of course, professional consultants. When doing so, it is best to follow the brainstorming guidelines of suspending judgement of those ideas until later.

5 tips for generating strategic options

The purpose of developing options is to allow for choice. As Porter said:

Strategy is about making choices, trade-offs; it's about deliberately choosing to be different.

Here are some tips to ensure your options allow for real choice.

Don't just stop once you've found an option you like.

If you'll do, you'll never know if the next option would not have been even better. Work through the full range of options.
Look for options which are mutually exclusive and/or involve tradeoffs.

This will help to ensure you're making the really tough calls to differentiate yourself in the market, and not simply executing as many of the ideas as you can.

For example: Airline brands must typically choose to position themselves as either 'discount' or 'premium'. By eliminating meal options, discount airlines can reduce flight turnaround times and costs (well beyond the cost of the meals themselves). However, this would deter premium customers.

Far from being a limitation, such mutually exclusive options are strategically valuable. They allow different competitors to take up different positions without competing head-on.
Beware Hobson's choice.

Hobson's choice creates the illusion of choice by positioning one option as the only alternative to either doing nothing or failing. I've seen people do this when they only really have one option (see tip 1).

For example: We must replicate a competitor's last move or lose market share. Instead, ask: What else could you do to retain and even grow market share?
When faced with a large number of options, group mutually reinforcing options into themes.

Strategy is a pattern of decision making, rather than a number of decisions made independently of each other. Grouping options into themes can help to highlight those patterns. Some options can be included in more than one theme.

In extreme case, themes can have their own vision and mission statements. Values, however, should remain consistent across all the options and themes.

Theming options presents you with two levels of choice:

which themes to pursue / not pursue, and
which options to pursue / not pursue within them.

Suspend judgement until the end

Resisting the temptation to judge options as either good or bad too early in the process. This will cloud your judgement. An option which does not appear very good in isolation might be a vital component of a very powerful theme.

Once you're done, you're ready to move on to the next step: How to evaluate and prioritise strategic options.

Which of these do you already use? Which of these do you planning on trying out next? Please share your stories and plans in the comments below.

Image adapted from: marfis75 decisions ( #cc ) via photopin (license)

The consistently popular SWOT analysis

A recent Google Trends analysis (see below) highlights some interesting insights in the popularity of some of the most widely used Strategy Analysis tools:

The chart above shows the popularity, measured in terms of Google search frequency, of 5 popular strategy analysis tools. (Google Trend analysis allows only 5 search terms at a time.)

Looking at this analysis, I draw 3 interesting conclusions:

Despite being much maligned by many as being too simplistic to be of any real value, the humble SWOT analysis is the most popular of the three models by a wide margin. This is consistent with my own experience: the SWOT analysis is the cornerstone of any analysis, and whilst it is easy to abuse, it is a vital tool when in the hands of a skilled strategist.
The popularity of all of the search terms, especially "SWOT analysis" is noticeably seasonal, peaking each November and March. This suggests that interest is still tied to some annual planning process. It is disappointing to see that strategy is still seen as a periodic episode linked to some financial and business planning calendar and not a more fundamental way of thinking about how a business is run on an ongoing basis.
Finally, the popularity of all search terms appears to be gradually diminishing over time. It would be heartening to believe that this is simply because everyone is now familiar enough with these terms to no longer need to search them on Google, but my own experience suggests that it is more likely to be because people are more inclined to chase the latest fad rather than relying on fundamental strategic analysis, as suggested by the Strategic Learning framework..

14 essential tools for strategy analysis [Updated 2023]

Strategic Analysis is a core step in the Strategic Learning Cycle. Every strategist should have a toolbox of analytical models at his or her disposal.

Having the right tools won't necessarily make you a good mechanic. Nor will having the right strategy analysis tools make you a good business strategist. But they will help a good strategist get the job done more effectively.

Here is my list of 10 essential strategic analysis tools:

1. SWOT

The SWOT is the most basic form of strategic analysis. Simply list the organisation's Strengths, Weaknesses, Opportunities and Threats. (learn more about SWOT)

2. Porter's Value Chain

The value chain is a simple (graphical) method for identifying and describing a firm's main functions and understanding how they contribute to value creation. (learn more about Porter's Value Chain)

3. The Strategy Canvas

The Strategy Canvas was popularised in the book "Blue Ocean Strategy" by W. Chan Kim and Renee Mauborgne. You can use it to understand how a firm differentiates itself from its competitors and other alternatives. (learn more about the Strategy Canvas)

4. The Business Model Canvas

Alexander Osterwalder and Yves Pigneur introduced The Business Model Canvas in the book "Business Model Generation". It is a very effective way of describing the key components of a business model. You can use it as the starting point for strategic analysis as well as for exploring alternative business models. (learn more about the Business Model Canvas)

5. PESTEL

The PESTEL is a macro-scanning framework which is useful for ensuring that you consider a broad range of possible sources of opportunities and threats. The letters represent the Political, Economic, Social (or Socio-economic), Technological, Environmental and Legal opportunities and threats in the firm's environment. (learn more about PESTEL)

6. McKinsey 7S

The McKinsey 7S is useful for ensuring that you consider all aspects of the organisation when identifying its strengths and weaknesses. The 7 Ses stand for: Structure, Systems, Style, Staff, Skills, Strategy and Shared Values. (learn more about McKinsey 7S)

7. Porter's 5 Forces

Porter's 5 Forces model is another framework for identifying threats and opportunities within the firm's environment. It considers the bargaining position of suppliers and customers (including distributors), the threat of new entrants and substitutes, as well as competitive factors within the industry itself. (learn more about Porter's 5 Forces)

8. Pareto Analysis

A Pareto Analysis is based on the maxim that 20% of the products, services, customers or distribution deliver 80% of the profits. A Pareto chart is a useful visualisation for showing this. However, its accuracy depends on the reliability of your cost allocation system. (learn more about Pareto Analysis)

9. BCG Matrix

You can apply the BCG Matrix to any business with more than one product or service line, or more than one customer segment. Plot the market share against the market growth rate for each product, service or customer segment. Then consider strategic options based on their relative position on the chart. (learn more about BCG Matrix)

10. Scenario Analysis

The future is inherently uncertain. Fortunately, good business strategy only requires you to be able to anticipate the future. You don't need to be able to predict it. Scenario Analysis is a tool to help you to anticipate multiple different futures. This allows you to construct your strategy around the premise that you can't be sure which, if indeed any, of them will come to pass. (learn more about Scenario Analysis)

11. Value Proposition Canvas

The Value Proposition Canvas helps to understand what a particular customer segment and how the business satisfies it (the value proposition). For each segment, it allows you to match the customer segments Jobs to be Done, pains and gains. These are then matched against the organisations products and services, gain creators and pain relievers. Pains, gains, pain relievers and gain creators help to move the perspective from the what to the why of an organisations value proposition. This supports better strategic analysis, as well as more strategically aligned marketing.

Given that the customer segments and the value proposition both appear on the Business Model Canvas, the Business Model Canvas and Value Proposition Canvas make very complementary companions. (learn more about the Value Proposition Canvas)

12. Lean Canvas

The Lean Canvas is a version of the Business Model Canvas which is favoured by some people for use in the early stages of conceptualising a new startup. 6 of the 9 categories are identical to those on the Business Model Canvas. However, whereas the Business Model Canvas includes Key Partners, Key Activities, and Key Resources, the Lean Canvas replace these with Problem, Solution and Key Metrics. The similarities between the two make it easy to progress from one to the other as your thinking evolves. (learn more about the Lean Canvas)

13. The Ansoff Matrix

The Ansoff Matrix is a strategic planning tool that helps businesses determine their growth strategy by exploring four key areas: Market Penetration (selling existing products to existing markets), Product Development (introducing new products to existing markets), Market Development (expanding into new markets with existing products), and Diversification (offering new products to new markets). This framework assists in evaluating the risks associated with each strategy, making it a valuable tool for businesses looking to expand or consolidate their market position. (learn more about the Ansoff Matrix)

14. The Balanced Scorecard

The Balanced Scorecard is a strategic tool used for performance management. It translates an organization's mission and vision into tangible objectives and measures across four perspectives: Financial, Customer, Internal Business Processes, and Learning & Growth. By balancing financial measures with those from these additional perspectives, it provides a more comprehensive view of business performance. This approach helps organizations monitor and manage their strategies effectively, ensuring that short-term achievements are aligned with long-term goals. (learn more about The Balanced Scorecard)

You can work with all of these strategic tools online in the StratNavApp.com online application. It's free. And if you are working in a team, you can collaborate with your team members in building your strategic models. Click here to get started.