1 © University of Southern Queensland Module 2 – Strategic Analysis Module outcomes At the successful completion of this module a student should be able to: ● Demonstrate how to think about different industry tools of analysis; ● Apply a range of industry analysis tools-in-use not just technically-rational one’s; ● Distinguish between different analytical models in ways that inform the task of the strategist. ● Critically reflect on contemporary forms of strategic analysis. Text Grant, R, Butler, B, Orr, S & Murray, P 2014, Contemporary strategic management: an Australasian perspective, 2nd edn, John Wiley, Milton, Queensland. Selected readings All selected readings can be downloaded from the MGT8002 Study Desk. Readings are closely related to the Module they relate to. Text Reading: Grant et al. (2014), Chapter 4 Reading 1: Porter, M. 2008, The five forces that shape strategy. Harvard Business Review, January. (Note: Due to specific copyright restrictions, this article cannot be printed and only viewed online through the USQ Library database, please see Resources link on Study Desk). Reading 2: Soilen, K.S. Kovacevic, M.A. Jallouli, R. 2012, Key success factors for Ericsson mobile platforms using the value grid model. Journal of Business Research, Vol.65, No.9, pp. 1335-1345. Reading 3: Plesner, U. Gulbrandsen, Ib. T. 2015. Strategy and the new media: A research agenda. Strategic Organization, Vol. 13, No. 2, pp. 153-162. Reading 4: Jacobides, M. G. 2010, Strategy tools for a shifting landscape. Harvard Business Review, Jan-Feb. Reading 5: Jarzabkrowski, P. Kaplan, S. 2014, Strategy Tools-in-use: A framework for understanding 'technologies of rationality’ in practice. Strategic Management Journal, Vol.36, No. 4, pp.537-558. 2 © University of Southern Queensland Recommended references Fitzroy, P. Hulbert, J.M. Ghobadian, A. 2012, Strategic Management: The challenge of creating value. 2nd edn. Routledge: New York. Barney, J & Hesterly, W, 2010, Strategic management and competitive advantage: concepts, 3rd edn, Prentice Hall, Boston, Massachusetts. 2.1 Thinking about the Industry Environment 2.1.1 Industry Analysis & Models Reading activity 2.1 Read Chapter 4 of Grant et al. plus Reading 1 by Porter (2008). Note the latter cannot be printed due to copyright restrictions however you can log on to review the article through your USQ log on details. To determine how a specific SBU will be affected by external influences, it makes sense to consider how particular industry forces will influence the organisation. Industry power for instance defines various rules of the game which we discussed in Module 1. A set of underlying factors serve to limit the scope of potential strategic behaviours by determining what must be done to survive or thrive in the chosen line of business (Johnson, Scholes & Whittington 2008). However, given the ubiquitous and sometimes dramatic nature of macro environmental changes, a more comprehensive definition of industry needs to be considered. Traditional analysis of industries as ‘a group of companies or organisations that compete directly with each other in the marketplace’, is too simplistic given the increasing ‘blurring’ of industry boundaries; a more comprehensive model is needed as we emphasised in Module 1. Given the RBV emphasis in this course, we will also be interested in heterogeneity and not just the idea of temporary advantage because of existing industry forces that dictate what a firm will and won’t do. Read the section in Chapter 4 of your text Grant et al. under the heading ‘Porter’s five forces of competition framework.’ Note what we indicate in the second paragraph about competition, that is, industry attractiveness helps us consider the impact of the five forces on competitive pressure. In a perfect world, these forces may help organisation determine whether a particular industry is attractive to enter. Porter’s (1980) model considers the underlying factors that determine the relative ‘attractiveness’ of particular industries in terms of their capacity to provide sustainable profits. The five groups of actors/agents are: new entrants, buyers, suppliers, substitutes and competitors. Porter (1980) argues that the extent to which individual businesses are affected is predicated upon their industry’s capacity for change and therefore development, or as he puts it, ‘evolution’, though the term evolution may wrongly imply slow, incremental adaptation, which is not the case as sudden changes can be cataclysmic. As depicted in Figure 2.1 below, we draw this slightly different to emphasize the external drivers in the macro environment as well. A combination of macro environmental influences influence whether new entrants are attracted to an industry, the threat of substitutes, and the bargaining power of suppliers and buyers that in turn influence the dynamics of competitor rivalry and subsequently, the individual business. The complexity 3 © University of Southern Queensland of the block, multidirectional arrows demonstrates the lack of clarity of the origin of the drivers for change. Figure 2.1: Classifying industry forces Interestingly in Reading 1 (page 80) of the article, have a look at what Porter suggests about ‘intense’ forces. He suggested that in highly intense industries where competition is the greatest, e.g., the airline industry, ‘no company earns attractive returns of investment’ (p. 80), and further down he notes that ‘…understanding industry structure is essential to effective strategic positioning…(and)…defending against competitive forces and shaping them in a company’s favour are crucial to strategy (Porter 2008, p.80). In Chapter 4 of your text, we go on to discuss these forces in some detail. For instance, powerful firms develop barriers to entry for other firms by developing infrastructure assets and heterogeneous resources on an enormous scale. We use the example in the chapter of BHP Billiton and Rio Tinto. Doing mining on such economies of scale indicate that they can compete on cost as well as know- how whereas new market entrants would have to establish a similar scale of development. Learning activity 2.1 What other complements (see page 134 of Chapter 4 in Grant et al) might affect rivalry? What about suppliers of suppliers in the airline industry (some other industry) that are not easily recognisable? Let’s discuss this on the study desk. Now read Porters article (Reading 1) up to and including page 85 under the heading ‘rivalry among existing competitors.’ Let’s discuss this here. Note that rivalry limits profitability in an industry because it drives down industry profit potential especially when competitors are roughly equal in size and power where industry/market strategies depend on pricing attacks and slow growth. However, can you see the limitation of this assumption (whether true or false) when we compare this to RBV? That is, industry attractiveness as we spoke about in Module 1 assumes that homogenous resources exist precisely because of industry rivalry meaning there is little firms can do to change this situation. According to the intense rivalry forces on page 85, industry growth is so slow that it precipitates fights for market share but only if firms have similar homogenous resources as in Barney’s (1991) article (see Reading 1 in Module 1). So the possible answer to intense rivalry is to develop firm heterogeneity in 4 © University of Southern Queensland resources that are rare and valuable that others don’t have so that a firm is more competitive within an industry. Now read the remainder of Reading 1. After you read Chapter 4 of your text, you will note the influence of other factors in the model. On page 86 of Reading 1 for instance, Porter highlights how a strategist ought to keep the overall structure in mind rather than focus on one element. Note also in Chapter 4 of your text how we add complements, that is, products and services ‘used together with an industry’s product such as computer software and hardware that has the potential to influence the 5 forces’. Another is Government policy but it is not a force per se but rather a complement of another force such as a powerful supplier and/or a buyer. Governments also invest money into industries e.g., the construction industry, so Government complements have a capacity to influence industry rivalry. As practice for one of your assessment items, select any industry, draw the 5 forces with boxes, then fill out these boxes to the best of your knowledge. A useful question to ask after you go through this exercise in how do these forces influence intense rivalry (the middle box). 2.1.2 Competitive Analysis We discuss in Chapter 4 also under the headings ‘Industries and Markets’ and ‘Competitor Analysis’ the importance of identifying the firm’s closest competitors. This means understanding the market in which firms compete. Mostly, firms will have 2-5 key closest competitors although they may have many competitors. Also, identifying the demand and supply-side of the industry becomes necessary. The demand side forces firms to identify how the industry is segmented in terms of customers and to identify which products are demanded by which consumer groups. The supply-side means identifying the suppliers in the market and how they influence industry structure and the rivalry between firms. This also becomes important when suppliers are powerful and can dictate prices to all buyers including other firms and consumers. In addition to the framework for predicting competitive behaviour (see Chapter 4, p.137), another useful means is illustrated in Figure 2.2: Figure 2.2: A Competitive Profile Matrix Company A Company B Company C CPM Matrix Weight Rating Weighted Score Rating Weighted Score Rating Weighted Score Key Success Factors Product Quality Price competitiveness Management Financial Position Customer Loyalty Global Expansion Market Share Production Capacity Total 5 © University of Southern Queensland While Figure 2.2 is somewhat subjective, it represents a useful way to determine which competitors are rated the highest. Here, you first need to identify the key industry success factors. That is, within the chosen industry you which to compete, what are the factors that dictate success in the industry and/or what factors does a firm need to address to be successful in the industry. The total of the ‘weight’ column (Column 2) would add up to 1.0. That is, the 8 key success factors (KSFs) are rated in terms of potential impact on the industry by assigning an individual weight e.g. .2, in Column 2, such that the total of the 8 KSFs should add to 1.0. Some of the KSFs will clearly be weighted higher because of their importance in the industry. Then, rate each company’s ability to address each of the KSFs out of 10 (10 the highest, 0 the lowest). A company with a higher rating means it has a greater capacity to address one or more key success factors. Then multiply the weight x the rating to find the score then add each score to find the total score. The company with the highest weighted score is your closest competitor. On page 137-138 of Chapter 4 of Grant et al, we outline why it is important to assess a competitor’s current strategy. The current and future actions a competitor takes plus ascertaining how it gains competitive advantage, e.g., determining which of its resources are heterogeneous that provide the competitor with an edge, become important for a firm to determine its own response. For instance, in point 3 on page 138, we note that analysing competitive behaviour helps a firm to determine its own industry position. However, note once again the importance of RBV when we talk about the Australian wine industry focusing too much on technical excellence and not enough on creativity and valuable tradition. Now read the rest of Chapter 4 and note how scenario planning is a form of competitive analysis. 2.1.3 PESTEL Analysis Reading activity 2.2 Read Chapter 4 of Grant et al. plus Reading 2 by Soilen et al. (2012) Earlier in Figure 2.1, every firm has to consider its macro environment simply illustrated by political, economic, social, technological and legal factors. Flip back in Chapter 4 of Grant et al. to the discussion on PESTEL. Notice how the discussion highlights influential macro factors that in turn influence the forces within an industry. A simple example is the effect of a global downturn for coal in rich resource countries will dramatically effect coal exports. Similarly, drops in oil prices worldwide have seen a large reduction in the cost of fuel for consumers and businesses making airline companies more profitable in recent times. These large macro shocks are often difficult to plan for and in some case result in large-scale strategic change quite possibly leading to the closing of factories in resource markets, outsourcing and wholescale staff reductions (Figure 2.3). For instance, chemical companies have had to develop greater organisational resilience and agility in the face of impending shocks and to take rapid action. Don’t forget, all companies depend on shareholders particularly large companies; markets dislike sudden shocks which leads to significant stock reductions. Senior managers need to find ways to insulate the company quite possibly through a culture of innovation so that change can be negotiated. See http://www.mckinsey.com/insights/energy_resources_materials/oil- price_shocks_and_the_chemical_industry_preparing_for_a_volatile_environment 6 © University of Southern Queensland We note in Chapter 4 of Grant et al. under the discussion of PESTEL that every business requires an understanding of the forces and trends for change in the macro environment meaning it is crucial to analyse trends in the external environment. Figure 2.3 PESTEL Framework A report by McKinsey & Co (2015) of the forces reshaping Asia for instance suggests that four powerful global forces are leading to near-constant discontinuity: 1) emerging economy’s rapid industrialisation, 2) aging populations, 3) new technologies, and 4) growing web of interconnectedness transforming geopolitics, competitive landscapes as well as placing concerns on sustainability. As we outline in Chapter 4, two key questions of a PESTEL analysis are: 1) which environmental factors are affecting the organisation, and 2) which of these is the most important at the present time and in the next few years? Using the example of scenario analysis from Module 1, some companies plan much further out such as 5-10 years and more. 2.1.4 Key Success Factors In Figure 2.2 above, we started to think about industry key success factors. We discuss KSFs more specifically on p.143 of Chapter 4, that is, asking questions related to which industry conditions dictate success (see Table 2.1 below). Also, which industry behaviour will lead to a competitive advantage? They may be identified by an analysis of the industry’s 5 forces but also as illustrated on p.144, determining precisely what customers want and how does the firm survive competition. A firms position on its strategic intent may also establish its relative position in an industry over time because it establishes greater heterogeneity in its products that are hard to imitate, are rare and valuable as we discussed in Module 1. On page 145 of Chapter 4, we illustrate other ways of determining key success factors in an industry. This would mean identifying first the external forces and needs of the industry, determining the likelihood of industry response, which then leads to determining the possible key success factor. These are again illustrated in Table 2.2 such as likely KSFs in the pharmaceutical industry. National &international economy Sociocultural factors Industry environment Suppliers: Competitors: Customers: Government: Volatility: Other: Political Conditions Technology Natural environment Legal conditions 7 © University of Southern Queensland Table 2.1 Common types of Key Success Factors We discuss in Module 3 (Strategy Development), that once a firm knows the KSFs for an industry, it is much easier to think about the capabilities that need to be developed to tackle them. Thus far in relation to the RBV, developing capabilities matched to an industry is one way to think about what kind of strategies will help us achieve a competitive advantage, but it is not the only way. Hence, an RBV approach is about developing capabilities that are rare, of value, imperfectly imitable and not easily substituted or replaced by other capabilities within industry firms (see the discussion in Module 1). The upshot of all this is that matching capabilities with KSFs, while important, does not mean a firm is limited only by its current capabilities. It can develop new heterogeneous resources to develop new ones. Table 2.2. Determining the Key Success Factors for an Industry Industry External Forces/Needs Industry Response to External Forces/Needs Key Success Factors going forward? Pharmaceutical Industry e.g. The increasing health standards & regulations List more here e.g. Health expectations are increasing in all countries List more here e.g. Increasing research & development costs that lead to higher quality products - List more here Now refer to Reading 2 by Soilen et al. (2012) then read the first 4 pages only. This article offers a new lens by which to identify KSFs in rapidly shifting market technologies such as Ericsson’s mobile platforms (EMP) in the mobile telecommunications industry. See the first page where they suggest that firms in the mobile telecommunications industry are ‘unable to fully identify opportunities and threats when industry lines overlap or are blurred’ (p.1335). 8 © University of Southern Queensland Here, suppliers, and other network operators combine with providers of other value chains across stratified networks. We explore value chains more fully in Module 3 but they refer to a linear way of identifying all producers, suppliers and sellers in a supply chain with the goal of a firm to produce value that exceeds cost after everyone in the supply chain has added their own cost inputs to producing a similar product. But the latter linear approach to adding value means missing important additional elements into the mix of inputs such as reputation, innovation and brand value; interactions with external networks or players who are not always located in the same industry. The authors suggest how these added elements are leading to the deconstruction (taking apart) of the telecommunications value chain. This will be a familiar story from 2014 through to 2015 because of the sheer pace of emerging (and converging) markets such mobile phones, digital technologies, emerging economies such as China and Vietnam, and global shifts to emerging economies of large-scale manufacturing from Western economies. Reading 2 discusses how a value grid approach (see bottom of page 1337) helps firms such as Ericsson to identify new KSFs since the old linear value chain approach makes it difficult to identify the multiple players in a network of inputs required to produce EMP. The authors discuss how value networks and the added-value chain (page 1336 of the article) contribute to the value grid. Whereas the standard value chain approach can place a stranglehold on innovation making it difficult to identify KSFs in an industry, a value grid concept recognises new paths to enhance performance resulting in a three dimensional grid consisting of the vertical, the horizontal and an integrative diagonal dimension (see page 1337 of Reading 2). Note at the bottom of the second paragraph on page 1337 of the article where the authors suggest that firms might focus on 1) opportunities to influence customer demand both upstream and downstream, 2) opportunities to modify information access in either direction, and 3) opportunities to explore penetration points in multiple tiers that are not immediately adjacent (2012, p. 1337). At the bottom of page 1338 of the article, they indicate that once these networks of inputs and interrelationships are known, a firm is much better equipped to identify its KSFs. This might seem a more difficult task than simply observing other players in an industry based on traditional five forces analysis to determine how an industry drives KSFs. A value-grid approach by comparison would be expected to deliver a number of resource-based surprises within an industry and point to the importance of multiple source inputs into an industry’s key success factors. 2.2 Other Ways of Analysing External Inputs Reading activity 2.3 Refer to Reading 3 by Plesner and Gulbrandsen (2015). 2.2.1 Distributed Strategy Refer to Reading 3 by Plesner and Gulbrandsen and the influences of new media. Here the authors note that the informational phenomena is driving strategic analysis in such a way that traditional analysis - such as 5 forces, SWOT, value chain, competitive analysis, largely dictated by top managers – is being challenged by other inputs. New media is described as the influence of social media (software), smart-phones and Big Data (see page 154 of Reading 3) to actually co-constitute (or co-develop) strategy. This might suggest that as 9 © University of Southern Queensland influential as firms’ managers are, they are not the only influence. New media forms and their effects are called distributed strategy. Similar to our discussion in Reading 2 about multiple new inputs into a firms value chain, the boundaries that separate a firm from its environment is shrinking and subsequently challenging a managers ‘control’ over decision making including strategy. Note on page 155 of the article the examples of the French news organization, (Rue89), how social media, the web and social media software allow people anywhere to contribute to the production and dissemination of the core product (news) of the organisation. In the second paragraph down on page 155, they highlight the ‘open-sourced strategy’ of Wikimedia allowing the firm to identify growth opportunities in key markets. This led to a different ‘outside-in’ approach, one based on outsiders in the market contributing to the firm’s strategy. Thus, rather than be constrained by forces outside the market, here firms are using outside sources in different ways to help them develop strategic choices and identify KSFs. This means - as the authors outline at the bottom of page 155 - a ‘socio-technically constructed’ approach that cannot be avoided and is a necessity of strategic analysis. Also, on page 156, these forms of new media challenge managerial control over strategic choice because software devices can enforce ‘particular form of collaboration’ and that ‘hardware can enable third-party influence on company identity’ (Plesner and Gulbrandsen, 2015, p. 156). Given the importance of this type of research for strategic analysis as well as strategic development, the relationships and challenges illustrated on page 157 between boundaries of a firm, its range of choices available and different forms of management control become critical (see Table 2.3). Table 2.3: New Media challenges to Boundaries, Choice and Control Software Hardware Informational phenomena Boundaries Strategic challenge: erosion of boundaries in terms of defining core products Strategic challenge; erosion of boundaries in terms of distributing the strategy process Strategic challenge: erosion of boundaries in terms of environmental analysis Choice Strategic challenge: choice becomes a matter of negotiation Strategic challenge: choice becomes driven by technological development Strategic challenge: choice is best taken by outsiders Control Strategic challenge: loss of control over organisational sense- making processes Strategic challenge: loss of control over access to an spread of information Strategic challenge: loss of control over production of data. Adapted from Plesner and Gulbrandsen (2015). 10 © University of Southern Queensland Learning activity 2.2 To what extent can Facebook and Twitter as social media forms potentially influence a firm’s strategy? Can you think of recent examples since a firm’s reputation and intended strategy can suffer emergent consequences? Let’s discuss this on the study desk forum. See this Mckinsey article on how social media can guide strategic decisions. http://www.mckinsey.com/insights/high_tech_telecoms_internet/how_social_intelligence _can_guide_decisions 2.3 Contemporary External Inputs Reading activity 2.4 Refer to Reading 4 by Jacobides (2015). Note: please access this reading through the study desk as copyright restrictions mean it cannot be printed. 2.3.1 Strategy as Narrative Now refer to Reading 4 by Jacobides. What is interesting here is the recurring themes and limits of traditional strategic analysis to ‘devices (that) reduce complexity by creating stationary maps and projecting the landscape onto two-dimensional graphs – approaches that offer reliable guidance only when the environment isn’t changing’ (p. 77). Instead, firms should think of the narrative of strategy, the cast of characters who make up or contribute to the business and how they are connected (sounds familiar with value networks!) and the plots and subplots created. Notice the author invokes a familiar notion of strategic intent discussed in Module 1 that ‘play scripts consider how a company could succeed by reinventing its role.’ Now go on to read the next page on the ‘anatomy of a play script’ and the ‘corporate’ and ‘business’ play script. The author argues the usefulness of a ‘business play script’ approach to analysing businesses, that is, ‘dramatis personae and role (the main actors in a sector, their motives, and their roles), links and rules (the links between companies and the operating rules of the business) and present and future plots and subplots (the story lines of how players in a sector generate and capture value) (see page 79 of Reading 4). Reading 4 goes on to highlight how a play script analysis identifies how rules are changing e.g., in the pharmaceutical industry, where rules of engagement and how to make and serve markets are in flux because generic drug makers are changing the rules. The author for instance argues that traditional industry analysis would argue aggressively for fending off new entrants by reducing the power of suppliers in this new world. However, from a narrative perspective, it might simply mean rethinking the firm’s links with emerging players by writing a new play script. For instance, on page 81 of Reading 4, the authors discuss how pharmaceutical companies Novartis and AstraZenica want to become a player’s best friend by strengthening their links with health care providers, using new technologies to reorder the links among drug companies. The author goes on to describe the importance of strategic partners (Saatchi & Saatchi) and writing a new play script. 11 © University of Southern Queensland Now go through the ideas of ‘developing your play script’ (p.81). We won’t recall all of these here however Step 2, ‘rewrite your play script’ is interesting from a strategy as narrative perspective as it suggests a need to reinvent the play script for the entire sector, to reconsider actors and roles, and identify alliances and partners in ‘webs of relationships’. Under the heading ‘Engaging the Organisation’ (p.84), notice how CEOs should ‘identify the capabilities that must be developed.’ Sound familiar? This would be paramount to the resource-capability link we espoused in Module 1 reinforcing the narrative ideas proposed in Reading 4 and the value of identifying multiple players. 2.3.2 Strategic Tools and their Use in Practice Reading activity 2.5 Refer to Reading 5 by Jarzabkowski and Kaplan (2015). Perhaps the idea of play scripts in Reading 4, new media in Reading 3 and the value-grid approach in Reading 2 only serve to highlight the drawbacks and limitations of traditional strategic tools. We want to make it clear here that the processes and practices of strategic management tent to structure intellect, the notion that ‘technical rational’ models compel actors to structure their thinking in ways that significantly influence the pattern and practice of strategy. See the discussion by March (2006) in Reading 5. What we have been studying thus far is models that structure thinking e.g., 5 forces, PESTEL, SWOT, KSFs, such that these artefacts tend to develop a life of their own, a preferred and standardised way in which firms approach their planning cycles. Refer to the first 5 pages of Reading 5 to gain an understanding of the power of these technically rational models’ potential for limiting the interpretation of information much less the need for argument. For instance, the strategy process ought to be seen as a rather discursive and disruptive process if planners adopt learning frameworks we spoke of in Module 1. A learning process by Casey and Goldman (2010) highlighted the limitations of traditional strategic thinking (and planning) as limiting our worldview, constraining ideas rather than releasing them, and that knowledge creation was much more than scanning, questioning, conceptualising and testing, which is itself a technically rational way of thinking. The latter has similarities for analysing strategic tools in practice by placing excessive limitations on the strategist’s mental models. For instance, note what Jarzabkowski and Kaplan (2015) in Reading 5 suggest about the current range of strategic tools-in-use and how firms place excessive trust on props for decision makers defending a ‘utopia of the mind against the realism of experience’ (p.537). From Reading 2 above for instance, we noted how traditional value chain analysis severely restricted firms in mobile telecommunication platforms to identify their key success factors because ‘actual’ value chains were more intricately tied to influential networks of players. If a firm was using existing strategy tools-in-use to identify value chain connections, this was much less likely because such processes would miss one of three dimensional grid connections between the vertical, the horizontal and an integrative diagonal dimension of upstream and downstream players. These strategic realities in the market reinforce what Reading 5 suggests about the ‘affordances of tools’ (see page 539 of Reading 5) as the materiality of an object that both favours, shapes and invites yet constrains a specific set of uses in practice. In reality, firm strategists or actors use these strategic tools-in-use for multiple purposes; the tool itself invokes a believable plot if you like since it is not neutral nor necessarily ‘objective’, rather, tools promote ways to analyse information such that the results feature importantly in how they are interpreted by each firm. Yet, as noted by the authors on page 538 of Reading 5, strategy tools-in-use potentially ‘obscure(s) the multiple 12 © University of Southern Queensland outcomes relevant to managers and organisations (by), and directs attention away, from the dynamics involved in using such technologies of rationality.’ Learning activity 2.3 Think of the car industry. What are at least 5 key success factors of this industry? Once you identify these, what other sources of information act as affordances (see the discussion above) that limit the accuracy of your assessment? On page 539 of Reading 5, the authors illustrate the interrelationships between the agency of actors and the affordance of tools described above. Our assessment of this is that since the strategic affordances are common place e.g., think of the information that is obtained through a PESTEL and its potential to influence strategic choice, then it makes sense to widen the strategists lens to different ways of seeing the world, not just those technical rational devices, tools, models and processes of strategy to which firms become attached. Please note that this is not to say that the models we analyse in Module 2 are NOT IMPORTANT. Rather, they should be used as supplements for strategic analysis, not as processes through which means are fixed and the ends entirely justifiable. The readings we have analysed in this module attest to the value of using multiple sources, the benefits or thinking strategically through distributed strategy not least the value of using different metaphors e.g., play scripts, that help us to see industry and competitive information in a different light. 2.4 Summary: Module 2 There is no doubt that strategic analysis is an important and normal feature of strategic management adopted by firms. For instance, a SWOT analysis is popular because of the ease that it can be applied. To an extent, so too the 5 Forces model. A senior manager can often work unilaterally to develop a quick SWOT of the firm’s competitors and major players’ strengths and weaknesses and opportunities and threats. Similarly, industry key success factors are those that help define what it means for firms to be successful. It makes sense to identify these and analyse how firms can develop the capabilities and resources to meet these challenges. Later on in the module however we have talked of other contemporary ways to assess industry forces including the reality that some forces such as new media are so influential that they co-create the strategies of the firm. Taken together, all of these approaches may be important not just a focus on strategy tools-in-use that refer to the more rational techniques of industry analysis. Additional references McKinsey & Co, 2015, No ordinary disruption: The forces reshaping Asia. Sept. De Wit, R & Meyer, R 2004, Strategy: process, content, context, Thomson Learning, London. Hamel, G 2000, Leading the revolution, Harvard Business School Press, Boston, Massachusetts. Hendry, J 1990, ‘The problem with Porter’s generic strategies’, European Management Journal, Dec., pp. 443–50. Kay, J 1993, Foundations of corporate success, Oxford University Press, Oxford. McGee, J, Thomas, H & Wilson, D 2005, Strategy: analysis and practice, McGraw Hill, London. 13 © University of Southern Queensland Moore, G 2000, Living on the fault line: managing for shareholder value in the age of the internet, Harper Business, New York. Oliver, C 1997, ‘Sustainable competitive advantage: combining international and resource- based views’, Strategic Management Journal, vol. 18, no. 9, Oct., pp. 697–713. Parolini, C 1999, The value net, Wiley, Chichester. Porter, M 1980, Competitive strategy, The Free Press, New York. Spender, JC 1989, Industry recipe, Basil Blackwell, New York.