During my working life as a market researcher I collected and analysed facts in order to determine a way forward in business situations. It wasn’t long before I realised that facts are more powerful if they are located within a framework. This passion for facts and frameworks led to the first edition of The Business Models Handbook. The book consisted of 50 frameworks used in business especially those for marketing and strategic decision-making. It proved popular and I was asked to write a second edition. The new book is now available (August 2023). It contains twelve additional frameworks. This introduces the interesting question – “if I had to manage with just three frameworks out of the 62 in the book, which would they be?”.
SWOT
My first choice is the SWOT framework (strengths, weaknesses, opportunities and threats). This is a popular and well used framework for good reason. Listing the strengths and weaknesses of a business, exposes issues that need correction and things worthy of investment. These are internal, within a company while the opportunities and threats look outside at the wider environment in which the business sits. Understanding the opportunities and threats together with the strengths and weaknesses points to actions that rectify problems and advance growth.
This analysis of the strengths, weaknesses, opportunities and threats generate forces that demand a response. The strengths of a company pitted against the external opportunities should indicate obvious priorities for investment. Bringing together the strengths of the company against the external threats will indicate areas that need shoring up to defend it. Similarly, company weaknesses can be related to external opportunities to see if there are any options for improvements. And not least, weaknesses can be assessed against the external threats in order to head off any pressures that could put the company at risk.
The configuration of the SWOT is shown in figure 1.
Figure 1 Using a SWOT analysis to generate a business response
Bullseye for brand positioning
The second framework I nominate as one of my favourites is the bullseye for brand positioning. Brands are a company’s greatest asset. The company name (the generic brand) is vital in giving a company an edge in a competitive market. It needs to be recognisable to a customer both in their head and their heart. It is a combination of a name, logo, images, facts and emotions that are associated with the brand. These combine to make a bond with a brand and hopefully create a level of loyalty to the point where customers will choose it to the exclusion of all others.
A good brand occupies a clear and simple position in the minds of customers. And of course, the brand must deliver against its promise or people will go elsewhere.
The bullseye brand positioning tool helps get to the brand essence – what the business stands for. Importantly the brand position can be used to locate it in the shelf space of customers' (and potential customers') minds. The whole purpose of having a strong brand position is to ensure that the brand is distinctive, differentiated and desirable and so has a competitive advantage.
The starting point of the bullseye framework is collecting data on the competitive environment and the customer. What are the competitive brands, where do they compete, and how strong and weak are they? What are the points of difference between the brand and competitors' brands? What are the points of parity (where are they the same)?
It is now possible to develop the bullseye framework. As the name suggests this looks like a target with concentric circles that work towards the centre and the eye itself. Around the outside of the framework are all the feelings that the brand engenders.
This analysis of the brand in terms of how it relates to customers gets to the emotions of the brand and from this a brand proposition can be created – a statement of what the brand stands for. It is important that a brand delivers against its promise and so it is necessary to see how this can be substantiated. Working towards the inner circle of the bullseye it is worth listing points of evidence that confirm that the brand is living up to its promise. The best bands develop a personality. These are traits that give a brand a distinctive character so that customers become attached to them, just as they would if the brand was a person. In the centre, in the bullseye, is the brand essence - a short distillation of two or three words that describe the brand.
Figure 2: Example of a brand bullseye
Balanced scorecard (BSC)
The third framework in my hall of fame is the balanced scorecard (BSC). This framework focuses on the measures and targets that are necessary to achieve a strategy or improve the performance of an organisation. It is a brilliant health check and map for a company strategy.
There are four areas of business that are central to the BSC framework. Each area requires specific metrics – measures that show where the company stands right now and where it aims to be by a certain date. The measures are chosen to ensure improved customer satisfaction, improved profits, improved internal processes, and innovations that will future proof the company. They are:
Financial: The finances of a company are its pulse and blood pressure. They show its health. Typically they include revenue, net profit, gross margin, fixed costs, variable costs, and cash in the bank.
Customers: These metrics show to what extent a company is performing well in the eyes of its customers. They include basic statistics such as numbers of customers, numbers of new customers, sales per customer as well as customer satisfaction scores, net promoter scores and the like.
Learning and growth: Innovation is vital if a company is to grow. Knowledge is an asset which offers a competitive advantage. There are many measures here that can be tracked. These include numbers of patents, amount spent on research and development, numbers of training days per employee, the skills of employees, productivity, and employee satisfaction.
Internal processes: These measures are a determination of the efficiency of a company in using its resources to maximum advantage and delivering value to customers. They include numbers of complaints, deliveries on time and in full, inventory levels, speed of decision-making, the percentage of new products in the portfolio and so on.
The BSC enables a business to align its actions with the strategic objectives, measuring progress and driving performance improvement.
So, although I would make a plea for everyone to be acquainted with a host of business frameworks, there are three that I recommend strongly to every business manager. The SWOT can be used to develop a strategy for growth, the brand Bullseye will help find a competitive edge for promoting the company and the balanced scorecard will ensure that the company objectives are achieved.
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