Business frameworks are practical tools that may assist with problem-solving, thought organization, and recommendation-sharing. You can scale a more comprehensive conceptual framework to suit your needs. You can adapt a business framework’s starting point and common terminology to suit your own purposes. A business framework should, in the end, establish structure and simplify difficult business challenges. The most well-known business, management, and strategy frameworks and models in use today are listed below. Frameworks can be grouped according to a number of levels of analysis:
Also Read: SWOT Analysis: Bringing Internal and External Factors Together
- Hofstede’s Cultural Dimensions
- Porter’s Diamond of National Advantage
- PESTEL Analysis
- Industry Life Cycle
- Porter’s Five Forces
- Value Net Model
- Acquisition Integration Approaches
- T. Kearney Strategy Chessboard
- BCG Growth-Share Matrix
- GE/McKinsey Matrix
- McKinsey 7S Model
- Strategy Diamond
- Ansoff Matrix
- Bartlett and Ghoshal’s Matrix
- Business Model Canvas
- OLI Paradigm
- Porter’s Generic Strategies
- Profit Tree
- SWOT Analysis
- Value Chain Analysis
- Value Disciplines
- VRIO Framework
- AIDA Model
- Marketing Funnel
- Technology Adoption Life Cycle
- Product Life Cycle
- Price Elasticity
- Blake and Mouton’s Managerial Grid
- Fiedler’s Contingency Model of Leader-Situation Matches
- Hersey and Blanchard’s Leadership Styles
- Kotter’s 8 Steps of Change (Management) Model
- Lewin’s 3 Step Model of Change (Management)
Hofstede’s Cultural Dimensions
Geert Hofstede created the cultural aspects theory as a foundation for intercultural communication. Using a structure developed from component analysis, it examines how a society’s culture affects the values of its people and how these values connect to behaviour. This research produced six cultural dimensions—Power Distance, Individualism/Collectivism, Masculinity/Femininity, Uncertainty Avoidance, Long-term/Short-term Orientation, and Restraint/Indulgence—on which nations may be rated across time.
Porter’s Diamond of National Advantage
The Porter Diamond is a model created to explain how governments can act as catalysts to improve a country’s position in a highly competitive international economic environment. It is intended to help understand the competitive advantage that nations or groups possess due to certain factors available to them.
This framework, which was formerly known as PEST Analysis, is used in the early stages of developing a strategy to explain the terrain and environment in which a corporation works (PESTEL stands for Political, Economic, Social, Technological, Environmental and Legal). The acronyms SLEPIT (Social, Legal, Economic, Political, Intercultural, Technological), STEEPLE (Social, Technological, Economic, Environmental, Legal, Ethical), and DESTEP are variations of the term (Demographic, Economic, Social, Technological, Environmental, Political). When launching a new firm or expanding into a foreign market, this tool is extremely helpful. In order to provide a thorough knowledge of a scenario and related internal and external aspects, it is frequently used in conjunction with other analytical business tools like the SWOT analysis and Porter’s Five Forces.
Industry Life Cycle
Porter’s Five Forces
A framework for assessing the degree of rivalry within a given industry is Porter’s Five Forces study. When launching a new company or entering a new industry area, it is extremely helpful. This concept claims that rivals are not the only sources of competitiveness. Instead, five fundamental forces—the danger of new entrants, suppliers’ negotiating strength, buyers’ bargaining power, the threat of substitute goods or services, and existing industry rivalry—determine the level of competition in a given sector.
Value Net Model
The Value Net Model, an alternative to Porter’s Five Forces, acknowledges the significance of complementary and rival items in the market. Customers, complementors, competitors, and suppliers are the four key groups that the model focuses on as influencing factors in a company’s immediate environment. Porter’s model is used to characterize both customers and suppliers. However, under this paradigm, competitors include current rivals, new entrants, and substitutes. A novel component of the paradigm is the Complementors.
Acquisition Integration Approaches
Depending on a company’s requirement for Strategic Interdependence between the acquirer and the target business and the need for Organizational Autonomy, this framework defines four alternative methods to acquisition integration or merger integration: preservation, symbiosis, holding, and absorption.
A.T. Kearney Strategic Chessboard
Using these two dimensions—predictability and a company’s capacity to mould or adapt to its industry—A.T. Kearney suggests four different strategic stances.
BCG Growth-Share Matrix
The Boston Box, commonly known as the BCG Matrix, is a framework for decision-making about current product lines. It was created in the 1970s and is now used to assess how a firm should see its portfolio based on two criteria: the market’s growth rate and the relative market share of a product. This results in four archetypes: the Dogs, Question Marks, Stars, and Cash Cows.
The GE McKinsey Nine-Box Matrix provides a methodical way for the decentralized organization to choose where its funds should be invested. The corporation can evaluate a unit based on two variables that will decide whether it will succeed in the future rather than relying just on each business unit’s forecasts of its prospects: the attractiveness of the relevant sector and the unit’s competitive power within that market.
McKinsey 7S Model
Robert Waterman Jr. and Tom Peters, two business consultants, created the McKinsey 7S Framework as a management framework in the 1980s. Structure, Strategy, Systems, Skills, Style, Staff, and Shared Values are the seven S’s. The model is most frequently used as a tool for organizational analysis to evaluate and track changes in an organization’s internal environment. The concept is founded on the idea that these seven components must be coordinated and supportive of one another in order for an organization to function effectively. The model may therefore be used to determine what needs to be realigned in order to increase performance or to keep alignment (and performance) throughout other sorts of change.
The framework (created by Donald Hambrick and James Frederickson) centers the study around economic reasoning. Arenas, Vehicles, Differentiators, Staging, and Economic logic are the five dimensions that are examined. Making crucial decisions is the essence of strategy, and the Strategy Diamond’s actual strength lies in the way it incorporates crucial decisions into a larger picture as opposed to taking a piecemeal approach.
There are several strategies for business expansion. Igor Ansoff compiled his four growth techniques into the so-called Ansoff Matrix. The Product/Market Expansion Grid, another name for the Ansoff Matrix, enables managers to quickly summarize various prospective expansion plans and assess the risk involved with each one. The theory holds that danger increases every time you enter a new quadrant (horizontally or vertically).
Bartlett and Ghoshal’s Matrix
The Bartlett & Ghoshal Matrix is a frequently used framework to classify several types of globally functioning enterprises (1989). These companies were grouped by Bartlett and Ghoshal according to two criteria: local responsiveness and global integration. Businesses with a worldwide strategy, transnational strategy, international strategy, or multidomestic strategy can be identified in the resulting quadrants.
Business Model Canvas
The superb work of Alex Osterwalder provides a platform for businesses that require business model rethinking. It provides a systematic, step-by-step procedure for identifying fresh opportunities for value creation and examining a business’s present business model.
OLI Paradigm/Eclectic Paradigm
The OLI Paradigm is a tool that assists management in selecting among a variety of foreign market entry-mode methods, including exporting, licensing, and foreign direct investment (FDI). This theory states that three advantages—Ownership advantage, Location advantage, and Internalization advantage—are necessary for a firm to effectively participate in FDI. Management may choose to opt for other entry-mode tactics like licensing or exporting if any of these benefits are missing. John Dunning created the framework for the first time in 1979 under the term Eclectic paradigm. To support his paradigm, Dunning uses ideas like the internalization theory and the transaction cost theory.
Porter’s Generic Strategies
By placing oneself between its competitors, a corporation might pursue a competitive advantage, according to Porter’s Generic Strategies. Three general approaches—Cost Leadership, Differentiation, and Focus—can be used to gain a competitive advantage. A corporation can pursue one of two sorts of competitive advantage: cutting costs and lowering prices, or distinguishing along customer-valued dimensions and charging more. A corporation also decides between two scope options: focused (providing its products to certain market groups) or industry-wide (selling its product across a wide range of market sectors). These four positioning options for businesses are provided by the combination of these techniques. According to Porter, businesses that attempt to excel in each of these areas will find themselves “stuck in the middle.”
The Profit Tree is a straightforward yet very efficient way to organize the revenue and expense streams of a business. It enables a business to identify areas for improvement in the event of poor profitability.
Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis is a systematic process for examining internal and external elements that might have an impact on a company’s performance. Since almost every conversation about strategic planning uses this framework, there is no need to introduce it. To get further information, it must be paired with the TOWS matrix.
Value Chain Analysis
a methodical process for examining your value chain and determining where to add the most value for the client.
- Treacy and F. Wiersema contend in their book, “The Discipline of Market Leaders,” that no business can prosper in the modern world by attempting to appeal to all demographics. Instead, it must identify the special value that only it can provide to a certain market. Product Leadership, Operational Excellence, and Customer Intimacy are the options available to businesses.
The Resource-Based View’s VRIO Framework, formerly known as VRIN, is a business analysis tool that aids in evaluating the internal sources of sustainable competitive advantage (RBV). This model suggests that resources and competencies should have four characteristics that result in long-term competitive advantage. Resources should be valuable, rare, unique, and supported by the entire organization. VRIO.
An effective marketing tool for guiding advertising choices for clients at various phases of the decision-making process is the AIDA Model. Marketers will need to modify their marketing initiatives at each level in order to assist clients in progressing to the next.
The marketing funnel is an excellent tool for visualizing the buyer’s journey, or the route that prospects travel as they learn more about your business and products, from awareness through purchase to (ideally) the advocacy stage.
Price Elasticity is a term used in economics to describe how much of a change in a product’s price results in a change in demand. It is a measurement of how price-sensitive the amount of something is.
Technology Adoption Life Cycle
According to the demographic and psychological traits of these 5 distinct adopter groups, the Technology Adoption Life Cycle outlines how a new (technological) product or innovation gets adopted or accepted.
Product Life Cycle
A marketing framework called the Product Life Cycle (PLC) aids in visualizing and comprehending how a product category’s sales have changed over time.
Blake and Mouton’s Managerial Grid
Based on a manager’s attention to both tasks and people, Blake and Mouton created a two-dimensional managerial grid (relationship-oriented). The grid has nine points on each axis, with 1 denoting a low concern and 9 denoting a significant concern. You may give managers alternative management styles based on how well they do on each of the two axes.
Fiedler’s Contingency Model of Leader-Situation Matches
According to Fiedler, people’s innate leadership styles are set in stone and cannot be altered (easily). The best method to tackle the circumstance is to either alter the leader depending on the circumstances or alter the circumstances to fit the leader. The Fiedler Contingency Model aids in identifying the best kind of leader for each scenario.
Hersey and Blanchard’s Situational Leadership Styles
The Hersey and Blanchard Situational Leadership Theory, created by Hersey and Blanchard, contends that a leader’s best leadership approach depends on the situation they are in. The model aids leaders in identifying which sort of style will work best with a particular follower.