Strategic Management Frameworks and Core Concepts
Posted on Feb 1, 2026 in Business Administration and Management (BAM)
Module 1: Strategy and Business Models
| Concept | Key Definition | Levels & Frameworks |
| Strategy | The long-term direction of an organization to achieve Competitive Advantage (doing things differently). | 3 Levels: 1. Corporate (Scope). 2. Business (How to compete). 3. Functional (Execution). |
| Strategy Statement | Vision (The Future), Values (Core principles that do not change), Objectives (Specific targets). | 3 Steps: Understand to Decide to Execute. |
| Business Model | Explains how a firm creates, delivers, and captures value. | Key Components: Value Proposition, Customer Segments, Revenue Streams, Cost Structure. |
Modules 2 & 3: External Analysis (The Environment)
1. Macro-Environment (PESTEL and Forecasting)
| Framework | Purpose | Key Factors (Opportunities/Threats) |
| PESTEL | Identifies major external forces and Key Drivers of Change (KDCs). | Political, Economic, Social, Technological, Ecological, Legal. |
| Scenario Analysis | Creates 2-4 alternative views of the future when uncertainty is high (based on KDCs). | Helps prepare the firm for different plausible futures. |
Porter’s Five Forces Analysis
Objective: Evaluate Industry Attractiveness (Profit Potential)
| Force (Threat is High When…) | Power is High When… | Implication |
| Threat of Entry | Barriers are low (low capital/easy access). | |
| Threat of Substitutes | Substitute has superior price/performance ratio. | Limits the price you can charge. |
| Bargaining power of Buyers | Buyers are concentrated, large, or have low switching costs. | Drives prices down. |
| Bargaining power of Suppliers | Suppliers are concentrated or provide rare/specialist inputs. | Drives costs up. |
| Competitive Rivalry | Low market growth and high exit barriers. | Reduces overall industry profit. |
| Blue Ocean | Creating a new market space where competition is irrelevant. | Opposite of Red Ocean (crowded, high rivalry). |
Module 4: Internal Analysis (VRIO Framework)
| Concept | Definition | VRIO Test |
| Resources | The assets you have (e.g., cash, patents, machines). | V-R-I-O |
| Capabilities | The unique ways you use those assets (e.g., efficiency, specialized team skills). | |
| Threshold Capabilities | The minimum required just to compete. | |
| Distinctive Capabilities | Unique things needed to achieve competitive advantage. | |
| VRIO Framework | Assesses if a capability leads to Sustainable Competitive Advantage. | Value (to customer), Rarity (few rivals have it), Inimitability (hard to copy/patents), Organizational Support (structure exploits it). |
Module 5: Stakeholders and Corporate Governance
| Concept | Core Definition/Conflict | Management & Strategy |
| Stakeholders | Individuals/groups the firm depends on (e.g., owners, employees, NGOs). | Managed using Power/Attention matrix. Key Players (High P/High A) must be Actively Cultivated. |
| Principal-Agent Problem | Managers (Agents) act in their own interest, potentially against Owners’ (Principals) interests. | Arises from the separation of ownership and control. |
| Shareholder Model | Focus: Maximizing short-term returns for shareholders (US/UK). | Risk of short-termism (sacrificing long-term investment). |
| Stakeholder Model | Focus: Long-term survival for the entire corporate network (Europe/Japan). | Promotes a balanced approach to accountability. |
