The Rings Framework for Strategy Development; Porter’s Take on Strategy

Strategy is the path chosen to implement the goals of the business. In some views though, it includes the choice of goals themselves.

Too often though, Business Models (BMs) are often called strategies. Yet, BMs are solely a choice of implementation of a Product Strategy, that is a certain way to achieve the profit for a product.

A BM describes the way the enterprise uses its resources to deliver its products to a customer segment so that it returns value to all stakeholders and makes profit. There are rather a few standard generic academic business school choices for strategy valid for and considered by most enterprises.

“At a fundamental level, all strategies for Porter boil down to two very broad options: Do what everyone else is doing (but spend less money doing it), or do something no one else can do.
One could perhaps usefully divide the vast universe of subsequent strategy ideas into those that focus on:
Doing something new.
Building on what you already do.
Reacting opportunistically to emerging possibilities.”

Theory aside, what are the product and market strategies most often met at corporate level? More often than not these following few options are put forward with gravity and self-possession: “diversify”, “divest”, “new” and “expand” even though they are so common that we often use them in life for example for our share stock. Even though these strategies determine the enterprise future path they are essential marketing strategies resulting from research of the market and its segments. Since make it cheaper is much too common in practice it won't be added as a strategy but “the do it differently” is worth exploring because it may implement a new business model.

The devil is in the detail though, the real strategies in this case, are in the How to diversify, in the What to divest or What new services and in Where to expand. These product to market options cover predominantly the requirements for enterprise situations like growth, disruption, regulatory changes or response to competition trends… But different delivery business models are indeed required for each strategy above.

Strategies are not valid for ever though. Strategies should be updated as regularly as deemed necessary. They are affected by a change in the enterprise goals, vision,… industry aspects, markets, Political, Economical, Social, Environmental and Legal (PESTEL) forces and Porter's 5 Forces (Competition…) . The updated strategies will be effective yet again then.

A strategy renewal process establishes new goalposts by evaluating the trends, opportunities and competition behaviour to achieve the company vision. The process first assesses the current situation of the company in terms of strengths, weaknesses, requirements, on-going programs…

Refreshed strategies are formulated by associating company strengths with opportunities, weaknesses with development programs and by adopting new technologies or business models.

Since the modern Digital pace of progress may endanger your company very existence, an emerging technology strategy must be thought out after analyzing the new technologies landscape.

There is a need though for a clear strategy analysis and specification frame in order to develop and repeat the enterprise strategy process.

Here is a Rings Strategy Development Framework:

  1. Beginning with the external ring we collect changes and trends from the enterprise macro environment by analyzing the Political, Economic, Social, Environmental and Legal/Regulatory factors. Had the regulation changed? Is the economy on a downturn? And so on.
    We analyze the environment and come with a list of factors that may affect the enterprise, the products, the market, the workforce, the finance, the currency exchange rate and so on… We come with Threats, Opportunities and plain Requirements for example from regulatory.
  2. We look at the micro environment for our industry by analysing such factors as Porter's Five Forces and the Digital technologies progress, Capital and Labor markets. The outcome is a set of threats and opportunities from competitors, new entrants, substitutes and markets that must be considered in elaborating the strategies.
  3. This ring consists of stakeholders and their requirements: Customers, Owners, Employees, Suppliers, Community, Environment… and not least the Company which must not be solely exploited but also cared for. Threats, Opportunities and Trends should be formulated.
  4. This is the first ring within the company remit. It is meant to gather requirements coming bottom up from all company functions such as Governance, Operations, Development and Support. What are the internal stakeholders need to do to work optimally?
    We analyze in this ring the company Strengths, Weaknesses and Requirements. So far Rings 1,2,3,4 gather requirements from the environment, stakeholders and the company itself.
  5. In this ring we formulate the Business Strategic Directions, taking into account all requirements from the superior rings.
    The resulting Threats and Opportunities from for external rings (1, 2, 3) that is from PESTEL Analysis, Porter's Five Forces and Stakeholders and company Strengths and Weaknesses from ring 4.
    1. We short list the impacts from the environment rings above (1, 2), stakeholders ring (3) and from the company functions themselves
    2. We formulate strategies to achieve the opportunities taking advantage of strengths and measures to improve on weaknesses to be able to take advantage of trends. We establish now the Vision and Goals of the Company taking into account the existing ones, taking into account the existing strategies and programmes.
  6. We map each strategy elaborated in the previous ring back to all departments in the organization chart coming top down and mapping them on each EA function process, technology.
    Each unit determines what needs to be changed in terms of process, technology and organization and people roles and proposes projects to realize the impacts as part of the specific strategy direction realization program.
    The result is an overall Strategic Transformation that implements each strategy direction program in alignment.
  7. The Strategic Directions, verified again against Suitability, Acceptability, Feasibility are prioritized in roadmaps and the Transformation plan is executed.
    The Strategic Transformation is ready to start.

Here it is the overall Strategy Rings framework mapped on the GODS-FFLV EA framework.

The view above illustrates the enterprise replacing rings 4-7 to describe the strategy mapping process on the enterprise organization and architecture. The mapping is done each business function in Operations, Development and Support and inside the function on Process, Technology and People roles.

See also:

Enterprise Architecture in 3 minutes Enterprise Architecture in 3 min or so GODS method

The 6th of “Top 10 Must-Read Books for an Awesome Career in Enterprise Architecture” EA books

PDF Version

Adrian Grigoriu

Adrian Grigoriu

Adrian Grigoriu is an executive consultant in enterprise architecture residing now in Sydney, Australia, former head of enterprise architecture at Ofcom, the spectrum and broadcasting U.K. regulatory agency and chief architect at TM Forum, an organization providing a reference integrated business architecture framework, best practices and standards for the telecommunications and digital media industries. He also was a high technology, enterprise architecture and strategy senior manager at Accenture and Vodafone, and a principal consultant and lead architect at Qantas, Logica, Lucent Bell Labs and Nokia. He is the author of a few books on enterprise architecture development available on Amazon at https://www.amazon.com/Adrian-Grigoriu/e/B007NGB1XY/ref=dp_byline_cont_ebooks_1 and published quite a few articles. Adrian blogs at https://it.toolbox.com/users/content/AdrianGrigoriu.
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