Strategy Frameworks

---
name: strategy-frameworks
description: "Apply classic and modern strategy frameworks to structure thinking and generate strategic options. Use this skill when the user mentions: strategy framework, SWOT, BCG matrix, growth-share matrix, Ansoff matrix, McKinsey 7S, value chain, business model canvas, blue ocean, core competency, strategic planning, mission vision, OKRs, balanced scorecard, GE-McKinsey matrix, strategic options, strategy formulation, Porter's generic strategies, three horizons, or strategic decision-making."
user-invokable: true
---

# Strategy Frameworks

You are a strategy framework specialist. Apply the right framework to the right problem, generate strategic options, and structure ambiguous problems into actionable analysis.

## Situation Assessment Frameworks

### SWOT Analysis
Organize findings into four quadrants with evidence for each item:

**Strengths (Internal, Positive):** What does the organization do well? What unique resources or capabilities does it have? What do customers cite as advantages?

**Weaknesses (Internal, Negative):** Where does the organization underperform? What resources are lacking? What do customers complain about?

**Opportunities (External, Positive):** What market trends favor the organization? What unmet needs exist? What regulatory changes create openings?

**Threats (External, Negative):** What competitive moves threaten position? What regulatory changes create risk? What market shifts could harm the business?

### TOWS Matrix (Strategic Options from SWOT)
Generate strategies from SWOT intersections:
- **SO Strategies (Strengths × Opportunities):** Use strengths to capitalize on opportunities — aggressive growth plays
- **WO Strategies (Weaknesses × Opportunities):** Address weaknesses to exploit opportunities — improvement-driven plays
- **ST Strategies (Strengths × Threats):** Use strengths to mitigate threats — defensive plays
- **WT Strategies (Weaknesses × Threats):** Minimize weaknesses and avoid threats — survival plays

### Current State Assessment Template
Answer "Where are we now?" across four dimensions:
1. Financial performance: revenue trend, profitability trend, cash position
2. Market position: market share, brand strength, customer satisfaction
3. Capabilities: core competencies, talent, technology, processes
4. Culture: values alignment, employee engagement, adaptability

## Growth & Portfolio Strategy

### Ansoff Matrix
Four growth strategies with increasing risk:

| | Existing Products | New Products |
|---|---|---|
| **Existing Markets** | Market Penetration (lowest risk) | Product Development (medium risk) |
| **New Markets** | Market Development (medium risk) | Diversification (highest risk) |

- **Market Penetration:** Increase share in current market — pricing, promotion, distribution, customer retention
- **Market Development:** Take current products to new markets — new geographies, new segments, new channels
- **Product Development:** Create new products for current customers — R&D, acquisitions, partnerships
- **Diversification:** New products for new markets — related (synergies) vs. unrelated (conglomerate)

Success rate benchmarks: Penetration ~70%, Development ~50%, Product Dev ~40%, Diversification ~25%

### BCG Growth-Share Matrix
Classify business units or products into four quadrants:

| | High Market Share | Low Market Share |
|---|---|---|
| **High Market Growth** | Stars (invest heavily) | Question Marks (selective investment or divest) |
| **Low Market Growth** | Cash Cows (harvest) | Dogs (divest or reposition) |

Resource allocation: Use Cash Cow profits to fund Stars and select Question Marks. Divest Dogs unless they serve a strategic purpose.

### GE-McKinsey Nine-Box Matrix
Plot business units on two axes (each scored 1-5):
- **X-axis: Competitive Strength** — market share, brand strength, profit margins, technological capability, management quality
- **Y-axis: Industry Attractiveness** — market size, growth rate, profitability, competitive intensity, technological requirements, environmental impact

Scoring: Weight each factor, score 1-5, calculate weighted average for each axis. Place in one of nine boxes: Invest/Grow (top-left), Hold/Selective (middle), Harvest/Divest (bottom-right).

### Three Horizons of Growth
- **Horizon 1 (Core):** Optimize and defend the current core business. Timeframe: 0-2 years. ~70% of resources.
- **Horizon 2 (Adjacent):** Extend into adjacent markets, segments, or capabilities. Timeframe: 2-5 years. ~20% of resources.
- **Horizon 3 (Transformational):** Create entirely new businesses or capabilities. Timeframe: 5-10 years. ~10% of resources.

## Competitive Strategy Frameworks

### Porter's Generic Strategies
Three strategic positions (avoid "stuck in the middle"):
- **Cost Leadership:** Lowest cost producer in the industry → compete on price or earn higher margins
- **Differentiation:** Unique product/service attributes that customers value → command price premium
- **Focus (Niche):** Concentrate on a narrow segment — either cost focus or differentiation focus

Trade-offs: Cost leadership requires scale and efficiency, potentially at the expense of customization. Differentiation requires investment in quality, innovation, or brand. Trying to do both often results in mediocrity.

### Value Chain Analysis (Porter)
**Primary Activities:**
1. Inbound Logistics — receiving, warehousing, inventory management
2. Operations — production, assembly, quality control
3. Outbound Logistics — distribution, delivery, order fulfillment
4. Marketing & Sales — advertising, pricing, channel management, sales force
5. Service — customer support, maintenance, warranty, training

**Support Activities:**
1. Firm Infrastructure — management, finance, legal, planning
2. Human Resource Management — recruiting, training, compensation
3. Technology Development — R&D, IT, process automation
4. Procurement — sourcing, supplier management, purchasing

For each activity: Assess cost, efficiency, and contribution to differentiation. Identify activities where the firm excels (sources of advantage) and where it lags (improvement opportunities).

### Blue Ocean Strategy Canvas
Plot competitors on a value curve (features on X-axis, offering level on Y-axis). Apply the Four Actions Framework:
- **Eliminate:** Which factors that the industry takes for granted should be eliminated?
- **Reduce:** Which factors should be reduced well below the industry standard?
- **Raise:** Which factors should be raised well above the industry standard?
- **Create:** Which factors should be created that the industry has never offered?

The new value curve should be distinct from competitors — that is the blue ocean.

### Core Competency Analysis (Prahalad & Hamel)
A core competency must pass three tests:
1. **Customer Value:** Does it contribute significantly to the perceived customer benefit?
2. **Competitive Differentiation:** Is it difficult for competitors to replicate?
3. **Extendability:** Can it be leveraged across multiple products, markets, or businesses?

If all three = Yes → true core competency. Invest and protect it.

## Business Model & Innovation

### Business Model Canvas (Osterwalder)
Nine building blocks:
1. **Customer Segments:** Who are we creating value for?
2. **Value Propositions:** What value do we deliver to each segment?
3. **Channels:** How do we reach and deliver to customers?
4. **Customer Relationships:** What type of relationship does each segment expect?
5. **Revenue Streams:** How does each segment pay and how much?
6. **Key Resources:** What assets are required to deliver the value proposition?
7. **Key Activities:** What activities are critical to the business model?
8. **Key Partnerships:** Who are key partners and suppliers?
9. **Cost Structure:** What are the major cost drivers?

### Business Model Patterns
Common patterns to consider:
- **Freemium:** Free basic tier, paid premium features
- **Razor-and-blade:** Low-cost base product, high-margin consumables
- **Platform / Marketplace:** Connect supply and demand, take a percentage
- **Subscription / SaaS:** Recurring revenue for ongoing access
- **Direct-to-Consumer:** Bypass traditional distribution

## Organizational Strategy

### McKinsey 7S Framework
Seven elements that must be aligned for organizational effectiveness:

**Hard elements (easier to change):**
- **Strategy:** The plan for achieving competitive advantage
- **Structure:** How the organization is organized (reporting lines, divisions)
- **Systems:** Processes, workflows, IT systems, performance management

**Soft elements (harder to change):**
- **Shared Values:** Core beliefs and attitudes (at center)
- **Style:** Leadership approach and organizational culture
- **Staff:** Employee capabilities, demographics, and development
- **Skills:** Organizational competencies and capabilities

Assessment: Rate alignment between each pair of element. Misalignment = source of organizational friction.

### Balanced Scorecard
Four perspectives, each with objectives, measures, targets, and initiatives:
1. **Financial:** Revenue growth, profitability, ROIC, cash flow
2. **Customer:** Satisfaction, retention, market share, acquisition
3. **Internal Process:** Quality, cycle time, productivity, innovation
4. **Learning & Growth:** Employee skills, technology, culture, knowledge management

### OKR Framework
- **Objective:** Qualitative goal — ambitious, inspiring, time-bound (quarterly or annual)
- **Key Results:** 2-5 measurable outcomes that indicate the objective is achieved
- Key Results should be quantitative, specific, and verifiable
- Cascade: Company OKRs → Department OKRs → Team OKRs (aligned but not duplicated)

## Decision & Prioritization Frameworks

### Impact vs. Effort Matrix (2×2)
Plot initiatives on two axes:
- **Y-axis: Impact** (High to Low)
- **X-axis: Effort** (Low to High)

Quadrants: Quick Wins (high impact, low effort — do first), Major Projects (high impact, high effort — plan carefully), Fill-Ins (low impact, low effort — do if time permits), Thankless Tasks (low impact, high effort — avoid)

### Weighted Scoring Model
1. Define evaluation criteria (e.g., strategic fit, financial impact, feasibility, risk)
2. Assign weights to each criterion (must sum to 100%)
3. Score each option on each criterion (1-5 scale)
4. Calculate weighted total for each option
5. Rank options by weighted score

### Decision Tree Analysis
For decisions under uncertainty:
1. Map decision points (squares) and chance events (circles)
2. Assign probabilities to each chance event (must sum to 100%)
3. Assign payoff/value to each outcome
4. Calculate expected value by working backward from outcomes
5. Choose the branch with the highest expected value

## How to Choose the Right Framework

| Situation | Recommended Framework | Reason |
|-----------|----------------------|--------|
| Entering a new market | Ansoff Matrix + Porter's Five Forces | Assesses growth direction and market attractiveness |
| Improving profitability | Value Chain Analysis + Cost Benchmarking | Identifies cost reduction and efficiency opportunities |
| Assessing business portfolio | BCG Matrix or GE-McKinsey Nine-Box | Enables resource allocation decisions across units |
| Organizational restructuring | McKinsey 7S | Ensures alignment between strategy and organization |
| Responding to disruption | Blue Ocean Strategy + Three Horizons | Identifies new value creation opportunities |
| Evaluating M&A target | VRIO + DCF + Synergy Analysis | Assesses strategic fit and financial value |
| Launching new product | Business Model Canvas + Ansoff Matrix | Structures the business model and assesses risk |
| Strategic planning | SWOT/TOWS + Balanced Scorecard + OKRs | Structures analysis, measurement, and execution |

## Modern Strategy Frameworks

### Jobs-to-Be-Done (JTBD)

**Core Concept:** Customers don't buy products — they "hire" them to get a job done. Focus on the job, not the product.

**JTBD Statement Format:**
"When [situation], I want to [motivation/job], so I can [expected outcome]."

**JTBD Analysis Process:**
1. **Identify the job:** What functional, emotional, and social jobs are customers trying to accomplish?
2. **Map the job steps:** Awareness → Search → Evaluate → Acquire → Use → Monitor → Modify → Complete
3. **Find unmet needs:** Where are customers over-served (opportunity for cost disruption) or under-served (opportunity for innovation)?
4. **Rate importance vs. satisfaction:** For each need, score importance (1-10) and current satisfaction (1-10). High importance + Low satisfaction = biggest opportunity.
5. **Define job-based segments:** Group customers by the job they're hiring for, not by demographics.

**Opportunity Score:** Importance + (Importance - Satisfaction) = Opportunity Score. Scores above 12 are strong innovation targets.

**When to Use:** New product strategy, innovation prioritization, market segmentation, competitive positioning based on customer needs rather than product features.

### Wardley Mapping

**Core Concept:** Map the value chain of a business on two axes: visibility to the user (Y-axis, top = visible) and evolution stage (X-axis, left to right: Genesis → Custom → Product → Commodity).

**Building a Wardley Map:**
1. **Define the user need** at the top of the map
2. **Identify components** that serve that need (each is a node)
3. **Map dependencies** (component A depends on component B — draw lines)
4. **Position each component** by evolution stage:
   - **Genesis:** Novel, uncertain, requires exploration (e.g., new AI technique)
   - **Custom-built:** Understood but bespoke (e.g., proprietary algorithm)
   - **Product/Rental:** Available as a product (e.g., commercial CRM)
   - **Commodity/Utility:** Standardized, pay-per-use (e.g., cloud compute, electricity)
5. **Identify movement:** Components naturally evolve left to right over time. Anticipate what will commoditize next.

**Strategic Plays from Wardley Maps:**
- **Build** what's in Genesis/Custom (your differentiator)
- **Buy/rent** what's in Product stage (don't reinvent the wheel)
- **Use commodity** for anything in Utility (optimize cost)
- **Watch for disruption:** When a custom component starts becoming a product, prepare for new entrants

**When to Use:** Technology strategy, build-vs-buy decisions, identifying where to invest vs. outsource, anticipating disruption.

## Framework Selection Decision Tree

Use this decision tree to choose the right framework based on the strategic question:

**Q1: What is the primary question?**
- "Should we enter this market?" → Go to Market Assessment
- "How do we grow?" → Go to Growth Strategy
- "How do we cut costs / improve efficiency?" → Go to Operational Strategy
- "How should we organize?" → Go to Organizational Strategy
- "What should we build / invest in?" → Go to Innovation/Investment Strategy
- "How do we respond to a competitor/disruptor?" → Go to Competitive Strategy

**Market Assessment:**
- Size the opportunity → TAM/SAM/SOM (market-research skill)
- Assess attractiveness → Porter's Five Forces
- Scan macro environment → PESTEL
- Evaluate fit → Market Opportunity Assessment (weighted scoring)

**Growth Strategy:**
- Determine growth direction → Ansoff Matrix
- Prioritize business units → BCG Matrix or GE-McKinsey Nine-Box
- Plan time horizons → Three Horizons of Growth
- Design business model → Business Model Canvas
- Identify uncontested space → Blue Ocean Strategy

**Operational Strategy:**
- Map processes → Value Chain Analysis
- Identify waste → Lean 8 Wastes (operations-analysis skill)
- Reduce costs → Zero-Based Budgeting, Spend Analysis
- Improve quality → DMAIC / Six Sigma

**Organizational Strategy:**
- Assess alignment → McKinsey 7S
- Measure performance → Balanced Scorecard
- Set goals → OKR Framework
- Clarify roles → RACI Matrix

**Innovation/Investment Strategy:**
- Understand customer needs → Jobs-to-Be-Done
- Map technology landscape → Wardley Map
- Evaluate investments → NPV/IRR analysis (financial-analysis skill)
- Prioritize → Impact vs. Effort Matrix

**Competitive Strategy:**
- Assess current position → SWOT/TOWS
- Choose strategic position → Porter's Generic Strategies
- Analyze advantages → VRIO Framework (competitive-analysis skill)
- Simulate responses → War Gaming

For detailed framework application guides, templates, and case examples, consult the reference files in the `references/` directory.