Consulting Framework

1. Five Forces Industry Analysis
Barriers to Entry
Economies of scale, Brand identity,
Switching costs, Access to
distribution, Government policy,
Expected retaliation, Capital
requirements
Threats of Substitutes
Relative price performance of
substitutes, Switching cost and
Buyer propensity to substitute,
Use different technology to solve
same economic needs
Supplier Power
Differentiation of inputs, Switching
costs of suppliers and firms in the
industry, Presence of substitute
inputs, Importance of volume to
supplier
Buying Power
Buyer vs firm concentration,
Buyer volume, Buyer vs. firm
switch cost, Buyer information,
Ability to backward integrate and
substitute products
Intensity of Rivalry
Industry growth, Fixed (or
storage) cost/value added,
Intermittent over capacity,
Concentration & balance,
Informational complexity

2. Industry Cost Curve Analysis
High
Low
PRICE
Big
Small
QUANTITY
Supplier Capacity Supply Curve DEMAND SHIFT
• Product quality
• Price of substitutes
• Consumer preferences
• Disposable income of consumers
• Price od complementary products
• Trends (economic. social, cultural)
SUPPLY SHIFT
• Technology
• Input Cost
• Government regulations

3. SWOT Analysis Framework
05
CHALLENGE
What are the company’s core
competencies ? Where does
the company have a
competitive edge.
01
STRENGTH
In what area does the company fall
behind. A description of a company’s
development needs.
02
WEAKNESS
What opportunities exist where
the company can gain
competitive advantage or
perform profitably ?
03
OPPORTUNITIES
What trends or developments would
lead to sales or profit deterioration in
the absence of defensive action.
04
THREATS
The strategic challenges the company faces
both internally and externally

4. 7S Analysis Framework
STRATEGY
VISION
Shared
Values
Skills
Structure
Staff
Systems
STYLE
The overriding goal of the
organisation - a clear compelling
statement.
An integrated set of actions
to deliver superior value to a
chosen set of customers, with a
cost structure that allows
continuing excellent returns
Activities the organisation must
be good at to deliver a winning
value proposition.
The commonly held beliefs
of the organisation, i.e. “what
is important”

5. 5 C’s Framework
COMPETE
CONCENTRATE
COOPERATE
CREATE
CAPTURE
5 C’S FRAMEWORK
Revenue from competitor
Profit from competitor
Profit from other element of
the industry chain e.g.
suppliers, retailers etc.
By price negotiation
By vertical integration
Via identifying consumer
potential
By effective segmentation
and pricing
New demand
By improving quality
Adding features
Displacing substitutes
Cooperate with suppliers,
customers etc.
To improve purchasing
powers

6. Benchmarking
CRITICAL SUCCESS
FACTOR
WEIGHT
COMPETITOR
A B C D
5 4 3 2 1 5 4 3 2 1 5 4 3 2 1 5 4 3 2 1 5 4 3 2 1
Technology
Quality
Order Processing
Service
Price
Employee Skills
Achievement
Internationality
Image
Advertising
Customer’s Evaluation for Competitors Customer’s Evaluation for Company

7. The Value Chain Framework
SUPPORT
ACTIVITIES
PRIMARY
ACTIVITIES
Services
Marketing & Sales
Outbound Logistics
Operations
Inbound Logistics
Management, legal, finance, accounting, public affairs
Recruiting, staff training, retention, compensation
Research and development, process automation, redesign
Procurement of raw material, spare parts, buildings, machines
• Receiving
• Storing
• Inventory control
• Packaging
• Testing
• Equipment maintenance
• Warehousing
• Order fulfilment
• Transportation
• Channel selection
• Advertising
• Pricing
• Customer support
• Repair services
• Installation
Firm Infrastructure
Human Resource
Management
Technology
Development
Procurement

8. The BCG Matrix
STARS QUESTION MARKS
CASH COWS DOGS
Relative Market Share
Future
Market
Growth
Rate
(%)

9. Directional Policy Matrix (DPM)
DIVEST
PHASED
WITHDRAWAL
DOUBLE OR QUIT
PHASED
WITHDRAWAL
PROCEED WITH
CARE
TRY HARDER
PHASED
GENERATOR
GROWTH LEADER
Unattractive Average Attractive
Weak
Average
Strong
PROSPECT FOR MARKET SECTOR PROFITABILITY
COMPETITIVE
POSITION
Divestment recommended due to weakness in
market potential and competitive position.
Businesses are typically cash generators, so maintain
market position and aim to harvest as much cash as
possible. Proceed with Care businesses have better
growth opportunities.
Investment should be greatest in Leader and Growth markets
Leaders should be supported, but Growth businesses should aim
for balanced cash flow. Invest for growth in ‘Double or Quit’
markets with best long term potential, but divest from
businesses expected to fail.

10. Goal & Constraints - Financial Outcomes
-15
-10
-5
-
5
10
15
20
25
30
2012/13 2014/15 2016/17 2018/19 2020/21
Initiatives sequenced for minimum
short-term disruption
Initiatives sequenced to reduce
negative earning impact
Initiatives sequenced with
regards to fasted payback