An interesting evolution of the Ansoff matrix, the Innovation Ambition Matrix, coined in an article from Harvard Business Review by two recognized consultants, Bansi Magji and Geoff Tuff, entitled ‘Managing Your Innovation Portfolio’. Innovation Ambition Matrix is a simple six-cell model with the vertical axis concerned with where an organisation is competing (ranging from serving existing markets/customers at the bottom, entering adjacent markets in the middle, and creating new markets at the top end of the axis) and the horizontal axis referring to type of products/assets used (using existing products, adding incremental products, and developing new products/assets). The axes of the matrix are labeled as follows: “How to Win.” This is designated for the novelty of the product that you are offering to customers. Are you using existing, adding incremental, or developing new products? “Where to Play.” This measures the novelty of your customers. Will the innovation serve an existing, Continue reading
Strategic Management Tools
External Factor Evaluation (EFE) Matrix
An External Factor Evaluation (EFE) Matrix allows strategists to summarize and evaluate economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive information. EFE Matrix indicates whether the firm is able to effectively take advantage of existing opportunities along with minimizing the external threats. Similarly, it will help the strategists to formulate new strategies and policies on the basis of existing position of the company. External factors are extracted after deep internal analysis of external environment. Obviously there are some good and some bad for the company in the external environment. That’s the reason external factors are divided into two categories opportunities and threats. Opportunities are the chances exist in the external environment, it depends firm whether the firm is willing to exploit the opportunities or may be they ignore the opportunities due to lack of resources. Threats are always evil for the firm, minimum no of threats in Continue reading
Porter’s Five Forces Analysis of Microsoft
Microsoft Corporation is the largest software company founded by Paul Allen and Bill Gate in 1975, the company controlled an overwhelming share of the personal computer operating system, cloud storage, office software suite, video game console Xbox, servers etc. Microsoft Company has intense pressure in the software competition over Google and Apple since they introduce operating system in both mobile device and PC. But still Microsoft conquer the market of operating system and software which resulting in more than 90% market share of operating system. Their vison is to create innovative technology that can be accessible to everyone. Therefore, to archive that vision, they decide to reduce the cost of software and service and make sure everyone can afford to use it. By doing so, they manage to lock-in their customer and influence the world to use more their products and service than others. Besides that, Microsoft trying to differentiate Continue reading
TOWS Matrix – Threats Opportunities Weaknesses Strengths Matrix
SWOT Analysis is a commonly used strategic management framework which scans internal strengths and internal weaknesses of a product or service industry and highlights the opportunities and threats of the external environment. This will help to focus on the strengths, minimize weaknesses and take the greatest possible advantage of opportunities available by overcoming threats. SWOT Analysis becomes a useless exercise if it is not extended to TOWS Analysis where the strengths are used to capitalize on opportunities and to counter threats and, the weaknesses are minimized using opportunities and both weaknesses and threats are avoided. Read More: SWOT Analysis — A Strategic Planning Tool Weihrich developed TOWS Matrix in 1982, as the next step of SWOT Analysis in developing alternative strategies. TOWS Matrix is a conceptual framework for identifying and analyzing the threats (T) and opportunities (O) in the external environment and assessing the organization’s weaknesses (W) and strengths (S). Continue reading
GE/McKinsey Matrix
GE/McKinsey Portfolio Matrix Model GE/McKinsey Matrix is the business portfolio framework developed by General Electric with the help of McKinsey and Company, an American global management consulting firm. GE Business Screen includes nine cells based on long-term industry attractiveness and business strength/competitive position. Factors that Affect Market Attractiveness: There are several factors which can help determine attractiveness. These are listed below: Market Size Market growth Market profitability Pricing trends Competitive intensity / rivalry Overall risk of returns in the industry Opportunity to differentiate products and services Segmentation Distribution structure (e.g. retail, direct, wholesale) Factors that Affect Competitive Strength: There are several factors which can help determine the business unit strength. These are listed below: Strength of assets and competencies Relative brand strength Market share Customer loyalty Relative cost position (cost structure compared with competitors) Distribution strength Record of technological or other innovation Access to financial and other investment resources Continue reading
The BCG Growth Share Matrix
In the late 1960s a consultant for the Boston Consulting Group presented his ideas about cash deficient and growth deficient businesses and the need for a balance between cash generators and cash users. After that the Boston Consulting Group developed a portfolio business model based on this thinking. The model, the BCG matrix or growth share matrix, was based on the Boston Consulting Group’s knowledge and work in the area of the experience curve and of the product life cycle and how they relate to cash generation and cash requirements. The growth share matrix was intended to analyze a portfolio from a corporate perspective because it is only at that level that cash balance is meaningful. A business may, however, be segmented further using this diagnostic tool to understand the positions of its various product lines or market segments. This portfolio can therefore be made up of products in a Continue reading