Strategy on one page: the frameworks worth knowing, and when to use each

There are hundreds of strategy frameworks and most of them repeat each other. In practice, a handful cover nearly every question a business faces. The skill is not knowing them all; it is matching the right one to the decision in front of you.

Is this industry worth competing in?

Porter’s Five Forces looks at the pressures that squeeze profit in an industry: rivalry between existing players, the threat of new entrants, the threat of substitutes, the bargaining power of suppliers and the bargaining power of buyers. When all five are strong, even good companies earn thin margins.

Where do we stand?

SWOT lists strengths and weaknesses (inside the business) and opportunities and threats (outside it). It is popular because it is simple, and weak for the same reason. Make it useful by attaching evidence to every point.

Ohmae’s 3Cs (customers, competitors, company) keeps the focus on the triangle that matters: what customers need, what rivals offer and what you can do better.

How big could it be?

TAM, SAM and SOM size a market in three steps. The total addressable market is everyone who could ever buy. The serviceable available market is the part you can reach with your product and channels. The serviceable obtainable market is the share you can realistically win in the next few years. Investors care most about the last number and how you reached it.

Where should the next pound go?

The GE-McKinsey nine-box matrix plots business units or products by market attractiveness and competitive strength. Units in the top right deserve investment; units in the bottom left are candidates to fix, sell or close.

McKinsey’s three horizons separates the core business you must defend today (horizon 1), emerging businesses that will drive growth soon (horizon 2) and options that could matter in years to come (horizon 3). Many companies spend almost everything on horizon 1 and are surprised when growth stalls.

Why is a good plan not working?

The McKinsey 7S model says a strategy only works when seven elements line up: strategy, structure, systems, shared values, style of leadership, staff and skills. Eric Partaker describes the same idea as seven engines of a company. Fix one and you affect all the others; ignore the ‘soft’ ones and the hard ones break. A new org chart rarely fixes a culture problem, and better software rarely replaces leadership.

A quick guide

Keep the output to one page. A strategy people cannot remember is a strategy they cannot follow.