STARTUP STRATEGY: 7 Frameworks All Startup Founders Should Use

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Every startup or small business goes through cycyles of ups and downs. However, if the foundation of a startup is builon strong long term and medium term strategy and values, it will survive multiple storms.

If your startup is undergoing a similar turmoil, these strategy models may help you ride the storm and could help your build a strong team and core fundamentals that may help the business in the long run.

These models might also help your startup diversify its products and services, or launch itself in newer markets and product categories.

1. Porter’s Five Forces Framework

It is a method of analysing the operating environment of a competition of a business. It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness (or lack thereof) of an industry in terms of its profitability. An “unattractive” industry is one in which the effect of these five forces reduces overall profitability.

 

2. McKinsey 7S Framework: 

The McKinsey 7S Framework is a management model developed by business consultants Robert H. Waterman, Jr. and Tom Peters. This was a strategic vision for groups, to include businesses, business units, and teams. The 7 S’s are structure, strategy, systems, skills, style, staff and shared values.

The model is most often used as an organizational analysis tool to assess and monitor changes in the internal situation of an organization.

Whatever the type of change – restructuring, new processes, organizational merger, new systems, change of leadership, and so on – the model can be used to understand how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration.

3. BCG Growth-Share Matrix 

The growth–share matrix (aka the product portfolio matrix, Boston BoxBCG-matrixBoston matrixBoston Consulting Group analysisportfolio diagram) is a chart that was created by Bruce D. Henderson for the Boston Consulting Group. This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis.

The BCG Matrix: How to Strategically Improve Your Product Portfolio

 

As BCG stated in 1970: “Only a diversified company with a balanced portfolio can use its strengths to truly capitalize on its growth opportunities.

The balanced portfolio has:

  • stars whose high share and high growth assure the future;
  • cash cows that supply funds for that future growth; and
  • question marks to be converted into stars with the added funds.

4. ANSOFF MATRIX

The Ansoff matrix is a strategic planning tool that provides a framework to help executives, senior managers, and marketers devise strategies for future growth. It is named after Russian American Igor Ansoff, an applied mathematician and business manager, who created the concept.

5. BOWMAN’S STRATEGY CLOCK

The Bowman’s Strategy Clock was developed by the two famous economists Cliff Bowman and David Faulkner. The main focus of the model is to make the companies aware of their position in the market as compared to their competitors.

It is purely a marketing model that helps the companies to analyze their position in the market. As per Bowman, the factor of competitive advantage is then the factor of cost advantage as it works as a distinctive element for the company and harps on the strategic positioning and the overall positioning of the product in the market.

6. SWOT ANALYSIS

SWOT analysis (or SWOT matrix) is a strategic planning and strategic management technique used to help a person or organization identify strengths, weaknesses, opportunities, and threats related to business competition or project planning. It is sometimes called situational assessment or situational analysis.

SWOT analysis has been used at different levels of analysis in many arenas, not just in profit-seeking organizations. SWOT analysis may also be used in pre-crisis planning and preventive crisis management. The framework may also be used in creating a recommendation during a viability study/survey.

7. PESTEL ANALYSIS

In business analysis, PEST analysis (“political, economic, socio-cultural and technological”) describes a framework of macro-environmental factors used in the environmental scanning component of strategic management.

It is part of an external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macro-environmental factors to be taken into consideration. It is a strategic tool for understanding market growth or decline, business position, potential and direction for operations.

  • Other specialized factors discussed in chapter 10 of the SPELIT Power Matrix include the Ethical, Educational, Physical, Religious, and Security environments. The security environment may include either personal, company, or national security.
  • Other business-related factors that might be considered in an environmental analysis include Competition, Demographics, Ecological, Geographical, Historical, Organizational, and Temporal. 

 

All the above strategy models can be use by a startup founder to assess a new market or future direction of the business while taking decisions.

References:

“Expert Program Management.” Expert Program Management, 10 June 2019, expertprogrammanagement.com/.

https://www.facebook.com/marketing91. “What Is Bowman’s Strategy Clock?” Marketing91, 15 Oct. 2018, www.marketing91.com/what-is-bowmans-strategy-clock/.

Wikipedia Contributors. “Wikipedia, the Free Encyclopedia.” Wikipedia, Wikimedia Foundation, 1 Feb. 2022, en.wikipedia.org/wiki/Main_Page.