Strategic Business Frameworks and Industry Analysis

Strategic Thinking Tools

A framework is a structured thinking tool that helps interpret information, make decisions, and support predictions or claims.

Business Model Canvas: Nine Basic Components

The Business Model Canvas includes these nine essential components:

• Key Partners
• Key Activities
• Key Resources
• Value Propositions
• Customer Relationships
• Channels
• Customer Segments
• Cost Structure
• Revenue Streams

PESTEL Analysis

PESTEL analyzes macro-environment forces impacting an organization's strategies. These forces can be positive, negative, or neutral. It is typically used at the industry level, leading to customized responses at the organizational level. The components are:

• Political
• Economic
• Social
• Technological
• Environmental
• Legal

Be able to make a PESTEL for the AI/EV Industry (Include main helpful points).

Examples of PESTEL Application

Zara Example

• Political: Imposed Tariffs. US imposed tariffs on Spanish imports will impact margins/pricing of goods in the US.
• Economic: Market trends (Unemployment/Inflation). Changing demand for products.
• Social: Shift to second-hand shopping due to social media trends.
• Technological: E-Commerce/Shifts to Online shopping. AI tracking/influencing fashion preferences.
• Environmental: Public perception of fast fashion and the waste associated with the industry.
• Legal: Labor laws. A rise in minimum wage for factory workers would negatively impact Zara’s bottom line.

LEGO Example

• Political: Tariffs (E). Foreign relations could impact the supply chain.
• Economic: Squeezed consumer spending (also social). Grew revenue to $8B last year.
• Social: Rising trend of adult consumers, rising adult female consumer population, declining global birth rate.
• Technological: Digital expansion, emphasis on video games, collaboration for video game production (e.g., Harry Potter and Warner Bros).
• Environmental: Experimenting with new materials while maintaining durability. Goal of net zero by 2032.
• Legal: Environmental regulations (microplastic limits), maintaining obedience to varying national regulations.

SWOT Analysis

SWOT Analysis categorizes factors as:

• Strengths (internal)
• Weaknesses (internal)
• Opportunities (external)
• Threats (external)

(GAP SWOT in pictures). Auto companies (Lesson 3.3), What would a current day one look like for LEGO? (missing this)

Stakeholder Mapping

Used at the company level for a specific issue to map positions and impact of various stakeholders in the company.

Framework Application Scenarios

What is a typical problem statement that would be a good match for each model?

• Business Model Canvas: Companies are struggling to generate revenue from a new customer segment and need to redesign business models to achieve product-market fit and sustainable profitability. Addresses customer segments, value propositions, or revenue streams.
• PESTEL: The company is unsure how upcoming changes in environmental regulation and shifting consumer attitudes toward sustainability will affect future operations and long-term growth. Investigates political, economic, social, technological, environmental, and legal factors.
• SWOT: The business is facing declining sales in a competitive market and needs to identify its core strengths and weaknesses as well as external opportunities and threats to guide its turnaround strategy. Ideal for broad diagnostic and planning work.
• Stakeholder Mapping: The new software rollout faces resistance from both frontline employees and management, creating a lack of alignment that threatens project success. Helps visualize relationships, influence, and engagement strategies to address such issues.

Zara Case:

Lego Case:

xx

xx

xx

xx (end of page)

Situation Analysis and EV Industry

Competitive Analysis in the EV Industry

What is a competitive analysis? (Ex: from the EV industry): Competitive analysis is the process of identifying, evaluating, and understanding the strengths and weaknesses of current and potential competitors within an industry. It helps businesses develop a strategy to differentiate themselves, exploit market opportunities, and anticipate competitor moves, essentially weighing the competitive advantages and challenges to develop a strategic positioning.

What is a competitive advantage? (Ex: from the EV industry): Competitive advantage is a unique edge or attribute that allows a company to produce goods or services more efficiently at a lower cost or with higher quality and distinctiveness than its competitors, helping to attract more customers.

EV Industry Customer Value Proposition

Customer Value Proposition Structure

What is the general structure of a customer value proposition statement? What are the three components that make a value proposition compelling?

General Structure: For = customer target, Who = statement of need or opportunity, The = vehicle, Offers = benefit / differentiating factor #1, And = benefit / differentiating factor #2, Unlike = a competitive option that is inferior.

Three main components: 1) Target Market, 2) Specific Value, 3) Customer Connection.

Customer Persona Components

What are the important components of a customer persona? A customer persona is a semi-fictional representation of an ideal customer based on real data and research about demographics, behaviors, motivations, goals, challenges, and buying patterns (helps find the target audience).

Important Components:

• Demographic information (age, gender, income, education)
• Psychographics (goals, interests, values)
• Behavioral patterns (buying habits, product usage)
• Customer needs and pain points (problems they face)
• Buying role and objections
• Background and context

Main components: Decision making, Decision making process, Value drivers.

Customer Motivations for EV Purchase (EY Report)

Types of customers and what motivates them to buy or not buy an EV:

Utilitarian Needs (What functions make life easier or better):

• Affordability
• Value
• Fuel cost
• Cost of ownership
• Practical factors (driving range, reliability, etc.)

Emotional Needs (How does it make us feel):

• Positive emotional reactions to design
• Desire for innovation and ownership, pride/feeling about the car

Symbolic Needs (How does it relate to one's identity):

• Ownership as expression of identity, personal values, and social status
• Prestige symbolism, Symbolic benefits

Social Needs (How does it connect us to other people?):

• Fit in with social groups
• Social networks, Social acceptance, Social reinforcement

Competitive Analysis Examples

Develop competitive advantage, CVP, and customer persona analyses for other companies we have focused on:

Zara

• Competitive Advantage: Ultra-fast fashion model (2-3 weeks turnaround), Quality and affordability, Vertically integrated, Data analytics for real-time customer feedback.
• Customer Value Proposition: Offers fashionable, high-quality, affordable clothing reflecting the latest trends with rapid inventory turnover.
• Customer Persona: Young, fashion-conscious individuals, often Millennials and Gen Z who seek the latest styles without the luxury price tag.

Gap

• Competitive Advantage: Strong brand recognition, wide physical and digital distribution, accessible, classic, casual wear.
• Customer Value Proposition: Delivering comfortable, easy-to-wear basics and wardrobe staples with dependable quality at reasonable prices. Emphasizes value, inclusivity, and seasonal promotions.
• Customer Persona: Practical, value-minded consumers looking for comfortable everyday apparel, typically between 25–45 years old.

LEGO

• Competitive Advantage: Strong brand heritage, high-quality and safe product, digital interaction, global brand loyalty, adapts to evolving entertainment trends.
• Customer Value Proposition: Provides creative, durable, and educational construction toys that inspire imagination and development. Appeals to both kids and adult enthusiasts.
• Customer Persona: Families with children, adult hobbyists, educators valuing learning through play, and collectors.

Etsy

• Competitive Advantage: Marketplace of unique, handcrafted, and vintage goods. Emphasizes community and support for small businesses.
• Customer Value Proposition: Provides a curated platform to find and buy unique, customizable items, creating a personal shopping experience.
• Customer Persona: Typically younger adults and gift buyers.

Chegg Case: