ABOUT THIS CONTENTAn alternative to Porter's strategy model is one developed by Dr. Liam Fahey of Babson College. In his model there are five key elements: the organization, the firm in its environment, resources and capabilities, mind-set, and strategy.
Source: Dr. Liam Fahey | Babson College
An alternative to Porter’s strategy model is one developed by Dr. Liam Fahey of Babson College. In his model there are five key elements:
- The Organization – covered in this element are:
- The actual organization structure. This allows you to understand how the company works in theory.
- The personnel. This allow you to understand key individuals within the organization as well as the informal organization structure. This analysis leads you to identify the real power structures within a competitor.
- The culture. This enables you to understand how the employees view their world.
- The Firm in its Environment – covered in this element are:
- Value chain. This analysis tells you where in the process of producing value for its customers the competitor applies its resources and where it uses external or purchased resources.
- Strategic alliances – This will show you which alliances are really important for the competitor, and how it advances the competitor’s strategy.
- Special relationships – This allows you to identify any unique relationships that the company is dependent on regardless of the nature of the relationship.
- Resources and Capabilities – covered in this element are:
- Resources – Identifies the resources the competitor has available to it.
- Capabilities – Identifies where the competitor applies its resources to give it unique strengths.
- Mind-set – In this element you identify the key assumptions your competitor has about the market that drives the decisions they are making. These assumptions are usually not stated explicitly, but reveal a great deal about how the competitor behaves.
- Strategy – covered in this element are:
- Current strategy – This lays out the competitors strategy that is evident today. It is based on the totality of the other information gathered.
- Future strategy. This look into the crystal ball allows you to estimate what key changes your competitor may make to its strategy, and how those new directions will cause them to change their behavior in the marketplace.