Frameworks

1
Frameworks Processes

• IACT 302
• Corporate Network Planning

2
Overview

• Frameworks
• How do we assess a framework
• Foundation framework (Porter)
• Trilevel framework (Parson)
• Value chain framework
• Strategic opportunities framework
• Strategic impact/value framework
• Risk assessment framework
• Concluding remarks

3
Frameworks

• In general terms a framework is a structure used
  to analyse the issues
• Frameworks provide a shorthand method of
  describing the relationship between
  communications networks and competitive strategy
• They highlight important dimensions as well as
  suggest dimensions that are unimportant

4
Framework Limitations

• Frameworks are not theories, they are merely a
  language for classification
• The development of an appropriate framework is
  not prescriptive, as it is only the beginning of
  the strategic planning process
• Many frameworks are also static - and fail to
  capture the dynamics of changing technologies and
  their use

5
How Do We Assess a Framework?

• There are 3 principles which attempt to account
  for the complexities inherent in developing a
  competitive strategic plan

6
Principles

• The principle of persons
• The people who devise and act on a strategy have
  their own agendas (provides for intentional
  actions)

7
Principles

• The principle of factors
• There is a need to pay attention to
• product quality,
• customer service,
• employee commitment,
• competition,
• and other fundamental factors identified

8
Principles

• The principle of timely decisions
• There is a need for management to make timely
  decisions and to act decisively.

9
How Do We Assess a Framework?

• Unfortunately there are few frameworks that abide
  by all of these three principles
• No single framework can be everything to everyone
• An assessment of the suitability of a framework
  based on these three principles informs us of the
  areas to be emphasised

10
Framework Assessment

• Frameworks are also assessed in terms of
• specific uses
• scope
• advantages
• disadvantages
• Astute planners managers often combine
  frameworks to hedge against the risk of framework
  failure

11
1 Foundation Framework

• Most foundation frameworks are based on the
  seminal work of Michael Porter of the Harvard
  Business School

Potential new entrants
Substitutes
STRATEGIC BUSINESS UNIT
Suppliers
Buyers
Intra-industry rivalry
Fig. 1 Porters 5 forces in the competitive
arena
12
1 Foundation Framework

• Porter maintained that the competitive stance of
  a company depends on the collective strength of 5
  basic forces.
• The strategic network plan can be a powerful tool
  to change this balance of power.

13
1 Foundation Framework

• Porter suggests three generic strategies as
  logical approaches to obtain competitive
  advantages
• cost leadership (aim to lower production costs)
• differentiation (aim for unique
  product/service)
• focus (niche market or wide product/service
  range)

14
2 Trilevel Framework

• Parsons identified 3 levels of interaction where
  the strategic network plan can be used for
  competitive advantage
• industry level (impact on nature of
  service/products provided)
• firm level (specific competitive strategy)
• strategy level (at the strategy level the
  strategic network implementation and management
  plan supports the corporatestrategies)

15
3 Value Chain Framework

• The value chain is an analytical framework used
  to examine the value-adding activities in the
  firm and between firms. It was proposed by
  Porter
• Value activities consist of
• primary activity (production and delivery)
• and support activities

Product Development
Manufacturing
Distribution
Marketing
Focus
Lower cost
Lower cost
Differentiate
Customers
Suppliers
When and where can value be added?
16
4 Strategic Opportunities Framework

• The strategic opportunities framework suggests
  that strategic network planners should focus on
• External vs. Internal
• Traditional Business vs. Business transformed by
  strategic use of the network

External Operations
Internal Operations
IT-intensive products and services
Traditional products and processes
17
5 Strategic Impact/Value Framework

• The value or impact of an advantage or strategy
  can be measured by how much is it worth
• to possess that advantage, or
• to create an opportunity by following that
  strategy (identifying grid sections and actions)

High
Factory Support
Strategic Turnaround
Strategic impact of existing networks
Low
18
5 Strategic Impact/Value Framework

• This framework expands on the grid to account for
  2 interacting dimensions IMPACT and VALUE
• The IMPACT is segregated into
• time
• geography
• relationships
• There are 3 different types of value
• efficiency
• effectiveness
• innovation
• This framework can be used as a strategic network
  planning guide to help organise and analyse
  network-intensive areas of activity

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5 Strategic Impact/Value Framework

• For a network, what might it mean to examine the
  IMPACT of Time (use time compression) on the
  three values
• EFFICIENCY ACCELERATE BUSINESS PROCESSES
• EFFECTIVENESS REDUCE INFORMATION FLOAT
• (make data rapidly available)
• INNOVATION CREATE SERVICE EXCELLENCE

20
5 Strategic Impact/Value Framework

• For a network, what might it mean to examine the
  IMPACT of Geography (Overcome geographical
  restrictions) on the three values
• EFFICIENCY RECAPTURE SCALE
• EFFECTIVENESS ENSURE GLOBAL MANAGEMENT CONTROL
• INNOVATION PENETRATE NEW MARKETS

21
5 Strategic Impact/Value Framework

• For a network, what might it mean to examine the
  IMPACT of Relationships (Restructure business
  relationships) on the three values
• EFFICIENCY BYPASS INTERMEDIARIES
• EFFECTIVENESS REPLICATE SCARCE KNOWLEDGE
• INNOVATION CREATE CUSTOMER LOYALTY

22
6 Risk Assessment Framework

• Risk Assessment (RA) can be arrived at in
  different ways. One way is
• RISK LIKELIHOOD x IMPACT x VULNERABILITY
• The best way to determine the likelihood is using
  historical data (eg a 300 year flood)
• However, this is usually not available in the
  current dynamic business environment
• Threat Identification and Risk Analysis should be
  an integral part of any strategic network plan
  and used as a part of any strategic
  decision-making process.

23
6 Risk Assessment Framework

• Risks can be identified as
• Intrinsic
• (internal and generally within the control of the
  organisation)
• or
• Extrinsic
• (external and beyond the control of the
  organisation).

24
Concluding Remarks

• These are some of the many possible strategic
  frameworks that might be adopted by the strategic
  network planner
• New ones are also continuing to appear
• The important thing for network planners to
  decide is which one (or combination) is most
  suited for a particular organisation and its
  goals
• There are many dimensions to consider
• The value of each would be lost if all frameworks
  were simply combined together into one big
  super-framework