6.2Management Strategy

Management strategy is easiest to grasp as a three-stage flow: first grasp the current state using frameworks that analyze your company and the market, then translate that into marketing—who to deliver what value to—and finally put in place mechanisms that measure whether the strategy is proceeding as planned. At level 3, exams test linking frameworks together, such as feeding an opportunity identified via SWOT into a PPM resource-allocation decision.

6.2.1Competitive strategy analysis tools

• SWOT analysis organizes internal factors—a company's strengths and weaknesses—alongside external environmental factors—opportunities and threats. The level-3 usage is deriving strategic direction from combinations of factors (cross-SWOT)—for example, an SO strategy that leverages strengths against opportunities, or a WT strategy that protects weaknesses from threats.
• PPM (Product Portfolio Management) classifies products or businesses along market growth rate and market share into four quadrants—Stars (high growth, high share), Cash Cows (low growth, high share), Question Marks (high growth, low share), and Dogs (low growth, low share)—used to decide resource allocation. A typical exam pattern is the flow of funds: investing profit from "Cash Cows" into "Question Marks" to grow them into "Stars."
• Five Forces analysis examines the five competitive forces shaping an industry's profitability—
  ①rivalry among existing competitors,
  ②threat of new entrants,
  ③threat of substitutes,
  ④bargaining power of buyers, and
  ⑤bargaining power of suppliers. Value chain analysis views the sequence of company activities from raw-material procurement through manufacturing, shipping, sales, and service as a chain that generates added value, splitting them into primary activities (inbound logistics, operations, outbound logistics, marketing/sales, service) and support activities (firm infrastructure, HR management, technology development, procurement) to visualize where value is created and cost incurred, identifying the source of competitive advantage. Core competence is a company's unique central strength (technical capability, know-how, etc.) that competitors cannot easily imitate—the important connection is from analysis to execution: using value-chain analysis to locate the core competence, then concentrating management resources there.