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. Keep the three stages—analysis, execution, measurement—in mind.

6.2.1Competitive strategy analysis tools

• SWOT analysis is a framework that organizes internal factors—a company's strengths and weaknesses—alongside external environmental factors—opportunities and threats. It serves as the starting point for strategy formulation, such as leveraging strengths against opportunities or protecting weaknesses from threats.
• PPM (Product Portfolio Management) classifies products or businesses along two axes—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 how to allocate management resources. A typical decision is investing funds earned from "Cash Cows" into "Question Marks."
• Five Forces analysis examines the five competitive forces that shape an industry's profitability—
  ①rivalry among existing competitors,
  ②threat of new entrants,
  ③threat of substitutes,
  ④bargaining power of buyers, and
  ⑤bargaining power of suppliers—to assess industry attractiveness and a company's positioning. Core competence is a company's unique central strength (technical capability, know-how, etc.) that competitors cannot easily imitate; the idea is to build business strategy around this strength.