A Detailed Formula Sheet for Strategy Management Techniques

This document provides a comprehensive formula sheet for strategy management, encompassing several key frameworks and models. It begins with an overview of SWOT analysis, detailing its theories, strategy framework, models, tools, and formulas. Following this, it explores Porter's Five Forces, PESTEL analysis, the 7S framework, VRIO analysis, SAFe, and the Balanced Scorecard, each section covering the same aspects: theories, strategy frameworks, models, tools, and formulas. The document uses figures and examples to illustrate the application of each framework, providing a practical guide for strategic planning and analysis. The inclusion of real-world examples helps in understanding how these tools can be applied to solve business problems and make informed decisions. The document is designed to assist students and professionals in understanding and applying various strategy management techniques.

FORMULA SHEET FOR STRATEGY MANAGEMENT
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Table of Contents
1.0 SWOT:.......................................................................................................................................5
1) Theories:..................................................................................................................................5
2) Strategy framework:................................................................................................................5
3) Strategy Models:......................................................................................................................5
4) Strategy tools:..........................................................................................................................6
5) Formulas:.................................................................................................................................6
2.0 PORTER’S 5 FORCES:............................................................................................................7
1) Theories:..................................................................................................................................7
2) Strategy framework:................................................................................................................8
3) Strategy Models:......................................................................................................................8
4) Strategy tools:..........................................................................................................................8
5) Formulas:.................................................................................................................................9
3.0 PESTEL:..................................................................................................................................10
1) Theories:................................................................................................................................10
2) Strategy framework:..............................................................................................................10
3) Strategy Models:....................................................................................................................10
4) Strategy tools:........................................................................................................................10
5) Formulas:...............................................................................................................................11
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4.0 7S FRAMEWORK:.................................................................................................................12
1) Theories:................................................................................................................................12
2) Strategy framework:..............................................................................................................12
3) Strategy Models:....................................................................................................................12
4) Strategy tools:........................................................................................................................13
5) Formulas:...............................................................................................................................13
5.0 VRIO:......................................................................................................................................14
1) Theories:................................................................................................................................14
2) Strategy framework:..............................................................................................................14
3) Strategy Models:....................................................................................................................15
4) Strategy tools:........................................................................................................................15
5) Formulas:...............................................................................................................................15
6.0 SAFE:......................................................................................................................................17
1) Theories:................................................................................................................................17
2) Strategy framework:..............................................................................................................17
3) Strategy Models:....................................................................................................................18
4) Strategy tools:........................................................................................................................18
5) Formulas:...............................................................................................................................18
7.0 BALANCED SCORE CARD:................................................................................................19
1) Theories:................................................................................................................................19
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2) Strategy framework:..............................................................................................................19
3) Strategy Models:....................................................................................................................20
4) Strategy tools:........................................................................................................................20
5) Formulas:...............................................................................................................................20
References:....................................................................................................................................21
Appendix:......................................................................................................................................23
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1.0 SWOT:
1) Theories:
 SWOT is a strategic planning model to evaluate strength, weakness, opportunity and
threat of a business model.
 Strength is the attributes which could help in achieving future business goals and
sustainability.
 Weakness is the attribute that puts a barrier in the overall business growth.
 Opportunity factor reads how the external business condition can help in achieving the
business objective.
 Threat provides an insight which external factors could hamper the business performance.
2) Strategy framework:
Figure 1: Strategy framework of SWOT
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(Source: (Source: Phadermrod, Crowder & Wills, 2019)
3) Strategy Models:
The right strategy model for SWOT:
Useful Harmful
Internal
factors
Strength Weakness
External
factors
Opportunities Threats
4) Strategy tools:
SWOT tool executes a few benefits such as:
 Helps in assessing future goals through adequate analysis of opportunity and threats
 Prioritizes on key external and internal factors
 Easy to understand by the organization
5) Formulas:
 2*2 Matrix is used to execute strategic analysis of internal and external factors
 Strength and opportunity is placed in the matrix using an aggressive strategy
 Weakness and threat is placed using a defensive strategy
Example: Penetration into a new market based on the existing strength and weakness of the
brand and future opportunity and threat perceived out of the market is a real-world example of
application SWOT framework.
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2.0 PORTER’S 5 FORCES:
1) Theories:
Threat of new entrants: Threat is high when:
 Investment is lesser
 Competitors are weak
 Government is liberal and
 Products are almost similar
Bargaining power of suppliers: Bargaining power is high when:
 Number of suppliers are less
 Suppliers have scarce products
 Switching cost is high
Bargaining power of buyers: Bargaining power is high when:
 Number of suppliers are higher
 Suppliers have varied substitutes
 Switching cost is low
Threat of substitutes: The threat is high when the product ranges are varied, upgraded in quality
and cheap against others.
Rivalry within existing competitors: Rivalry is high when:
 Customer loyalty is low
 Equal competition among rivals
 Exit barriers are high
 Product substitution is higher
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2) Strategy framework:
Figure 2: Porter’s 5 forces model
(Source:Bruijl, 2018, 18)
3) Strategy Models:
 Five forces determine the industry structure and the overall competition level.
 Stronger competitions are low in profit.
 Attractive and unattractive industries are high and low in profits respectively (see
appendix)
4) Strategy tools:
This tool is helpful in determining:
 The competitive position of an industry
 The structure of the industry and buyer-seller relationship
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 Industry rivalry is driven by threat of entry, bargaining power of buyer and suppliers and
threat of substitutes.
5) Formulas:
Step 1: Collect information on five forces
Step 2: Evaluate the results and make diagrammatic display
Step 3: Create strategy based on the results
Final formula: Step 1+Step 2+Step 3
Example: Launching a new product into the highly competitive market may require the
management to conduct a Five Force analysis to assess the degree of competitiveness and
organisation’s relative position with respect the same.
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3.0 PESTEL:
1) Theories:
 PESTEL is used by the global marketers to examine and monitor the macro-
environmental factors.
 Pan, Chen & Zhan (2019) stated that the analysis of an external marketing environment
affects the strategic planning of an organisation to maximize its market opportunities and
minimize its threats into the operating market
2) Strategy framework:
Figure 3: PESTEL Framework
(Source: Pan, Chen & Zhan, 2019)
3) Strategy Models:
Refer to figure 9, appendix.
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4) Strategy tools:
 Define the long-term influence on the operational activities and performance of the firm.
 Review the current and future strategies as per the marketplace.
 Focus to offer a new direction, product or plan for the business.
 Helps to identify the solution of any external issue.
 Provide strategic benefits over the opponents.
 Evaluate the risks allied with the current or new market.
5) Formulas:
Step 1: Collecting information about the PESTEL of the operating market.
Step 2: Identifying the best suitable PESTEL factors which represent the opportunities
Example: Management of a company may want to assess the viability of a newly conceived
capital intensive project that is planned to be introduced in a new territory. For the purpose, the
management may conduct a macro-economic analysis with respect to the 5 aspects of PESTLE
framework to understand the market better.
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4.0 7S FRAMEWORK:
1) Theories:
The McKinsey 7-S framework has been designed to assist the managers with its hard and soft
elements so that the influential factors of the firm can be identified and the organisational
condition can be improved accordingly.
2) Strategy framework:
Strategy: Maintaining and constructing a competitive benefit over rivals.
Structure: Dealing with all the departments of the organisation.
Systems: Regular activities that employees need to be engaged to complete the job.
Shared Values: The core values of the firm related to company culture and the general principle
Style: The leadership style adopted for the employees.
Staff: The workforces and the general competences.
Skills: The genuine skills and aptitudes of the workforces.
3) Strategy Models:
Refer to Appendix, figure 6
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