I am now embarking on my first strategy consulting assignment for a multinational corporate client. To help me with this assignment, I have prepared the following write-up summarizing some of the key frameworks and analytical tools and techniques that I have learned throughout the fall semester in ADMN 703 course. These include: indentifying the industry; SWOT analysis, externalanalysis tools such as DEPEST analysis, and Porter’s Five forces analysis; internal analysis tools such as value chain analysis, Performance assessment, and Assessment of competitive advantage. I will also explain how these frameworks will help me to prepare for conducting a comprehensive strategic analysis of the company and its environment.
Indentifying the Industry
Correctly identifying theindustry at the beginning of any strategy consulting assignment is vital to the relevance of the strategic analysis and allows for applicable conclusions and suggestions for strategic improvement and implementation. Not correctly identifying the industry may provide the firm with extraneous or overly expansive analysis that would be difficult to utilize towards the implementations of futurestrategies.
Also known as environmental analysis is important to determine the attractiveness of the indentified industry a firm is in. It relates to the external factors in the environment and the competitive nature of the industry and how it affects the particular firms within it.
The DEPEST analysis details the demographic, environmental, political, economic,socio-cultural and technological factors in the external environment of the particular industry. These factors help identify opportunities and threats for firms included in said industry. Some topics to consider of these factors include:
-Demographic: general descriptions of population including age, sex, income, and education levels.
-Environmental: awareness, environmental and ecologicalfacets.
Political: degree of government regulation, laws, restrictions, and general infrastructure.
-Economic: interest rates, exchange rates, overall economic position, inflation, developing vs. mature.
-Socio-cultural: general trends in the population which affect interests, attitudes, awareness.
-Technological factors: speed of technological change, affects on distribution and quality.
Withthis analysis strategies can be devised that take advantage of opportunities and counter possible threats.
Porter’s Five Forces Analysis
This analysis is important in regards to the competitive forces in the particular industry with examination of threat from entrants, threat of substitutes, buyer power, and supplier power which all help gage the strength of rivalry in it. The amount ofrivalry will help determine the overall profitability and attractiveness of the industry. This relates to the task structure and can be done for different environments especially which is especially relevant when dealing with a multinational corporate client. The subjects under the five forces to take into account include:
-Threat from entrants: barriers to entry- capital requirements and gov.policies, industry growth.
-Threat of substitutes: switching costs, quality/price of substitutes
-Buyer power: volume, availability of substitutes, price sensitivity, bargaining power.
-Supplier power: concentration, differentiation, forward integration.
This is an analysis based on the multinational firm and its competitors. It will help identify strength and weaknesses that afirm can use to improve or restructure strategies to cater to consumers. Firm level performance differences are based on customer focus, quality standards, management practices, the business model, and strategic leadership. The goal will be to accomplish said performance differences to truly posses a Sustainable Competitive advantage.
The quantitative portion of the...