Nine frameworks on slide two
Picture an analyst three weeks into a market study. The deck has nine frameworks, among them a SWOT, a PESTEL, the five forces, an Ansoff grid and a growth-share chart, each neatly filled in. On the day of the review, the executive who asked for it turns to the last slide and asks the only question she came with: should we buy the distributor or not? None of the nine frameworks answers it, because none of them was pointed at it.
Frameworks are not the problem. Each one is a good answer to a particular question. The thesis of this page: a strategy framework is only as good as the question it is pointed at. Name the decision first; the right framework is the one whose output could change it.
The guide below asks three to five questions about your decision and routes you to one of eight places: Porter's five forces, competitor analysis, the Ansoff matrix, a growth-share portfolio, scenario planning, a PESTEL scan, a test of your advantage, or, if the question is not clear yet, a page on writing the question first. Each result comes with steps and the page that teaches the method.
Pick the framework whose answer could change the decision. Skip the ones that only fill a slide.
Which framework answers your question?
Start from the decision your analysis is meant to inform, not from the framework you know best. Most paths take three questions.
Every framework is a question in disguise
Richard Rumelt makes the point from the other side. Good strategy, he writes, “does not pop out of some strategic-management tool, matrix, triangle, or fill-in-the-blanks scheme” 1. A framework organizes evidence for a judgment. It does not make the judgment. So the useful way to hold one is by the question it was built to answer, and the question it cannot.
| Framework | The question it answers | What it will not tell you |
|---|---|---|
| Five forces 2 | Why does this industry earn what it earns, and what could change that? | What a particular rival will do next |
| Competitor analysis | What will this rival do, and how do we answer? | Whether the industry is worth being in |
| Ansoff matrix | Where could growth come from: existing or new products, existing or new markets? | Which option is worth the risk; that takes sizing and judgment |
| Growth-share portfolio 3 | Which businesses should fund which? | Whether a business's share reflects a real advantage |
| Scenario planning 4 | Does our commitment hold up across futures we cannot predict? | Which future will happen |
| PESTEL | What is changing outside the industry? | Which change matters, until you write the so-what |
| VRIO; activity mapping 5 | Is our advantage real, and could a rival copy it? | Whether customers will keep valuing it |
Two of these come straight from their originators' framing. Porter writes that “the extended rivalry that results from all five forces defines an industry's structure and shapes the nature of competitive interaction within an industry” 2. Bruce Henderson's 1970 essay on the product portfolio starts from cash: “High growth products require cash inputs to grow,” and the first of his four cash rules is that “Margins and cash generated are a function of market share” 3. Both are about money: who keeps it, and where it has to come from.
How the guide routes you
The first question sorts your decision by subject: the industry and the world around it, competition, or growth and money. The second asks about time and uncertainty, because that is where the most common mismatch happens. A team facing a decade-long bet on a technology reaches for a five forces analysis of today's industry, which describes the present very well and the future not at all.
When a market question turns on a few big forces that could go either way, the guide sends you to scenarios only if a large commitment rides on the answer. Pierre Wack, who developed Royal Dutch/Shell's system of scenario planning with Edward Newland, drew the line between scenarios that merely quantify alternative outcomes of obvious uncertainties and those built for decisions. Of the first kind he wrote: “Such scenarios are not helpful to decision makers” 4. Without a decision to test, a PESTEL scan and a watch list do more for less.
Using what the guide gives you
Whatever the result, finish the analysis with a sentence that bears on the decision. Not “buyer power is high,” but “buyer power is high, so a distributor acquisition will not let us raise prices; the case has to rest on cost.” If you cannot write that sentence, the framework was the wrong one or the question was never pinned down.
If the guide sent you to “write the question first,” take it seriously. Our page on hypothesis-driven problem solving shows how to start from a specific answer you could be wrong about, which tells you which few analyses matter.
Where this guide oversimplifies
The fair objection is that real decisions do not sort this neatly. An acquisition can turn on industry structure, a rival's likely response and an uncertain regulation all at once, and experienced strategists combine tools without thinking about it. The mapping in this guide is our judgment, not a research classification, and a good strategist will sometimes overrule it.
The answer is sequence, not purity. Start with the one framework whose answer could most change the decision. Add a second only if the first leaves the decision open, and say why. Porter's own description of strategy points the same way: he writes that “the essence of strategy is choosing to perform activities differently or to perform different activities than rivals” 5. A framework that never reaches what you will actually do differently has not finished its job.
The frameworks library has the definitions; this page is about choosing between them. Ask what the decision is, then pick the tool that can change it.
Questions
- What are the main strategy frameworks?
- The most widely used include Porter's five forces for industry structure, competitor analysis for predicting rivals, the Ansoff matrix for growth options, a growth-share portfolio such as the BCG matrix for allocating cash across businesses, scenario planning for decisions under deep uncertainty, PESTEL for scanning the external environment, and VRIO for testing whether an advantage can be copied.
- How do I choose the right strategy framework?
- Start from the decision, not the framework. Write down what will be decided, by whom and by when, then pick the framework whose output could change that decision. Industry questions point to five forces, growth questions to Ansoff or a portfolio view, long-range uncertainty with a big commitment to scenarios, and questions about copying to VRIO and activity mapping.
- Should I use several frameworks on the same problem?
- Sometimes, but in sequence. Begin with the framework most likely to change the decision and add another only if the decision is still open, saying why. Running many frameworks for completeness produces long decks in which the analysis that matters is hard to find.
- Is this guide based on research?
- The descriptions of the frameworks draw on their originators' work, cited on the page. Which framework fits which question is our judgment as practitioners, not a validated classification, so treat the result as a starting point and override it when your decision clearly needs something else.
Sources
- Rumelt, R. P. (2011). The Perils of Bad Strategy. McKinsey Quarterly (June 2011), adapted from Good Strategy/Bad Strategy. Good strategy “does not pop out of some strategic-management tool, matrix, triangle, or fill-in-the-blanks scheme” (opening section).
- Porter, M. E. (2008). The Five Competitive Forces That Shape Strategy. Harvard Business Review (January 2008). Competition for profits extending beyond established rivals to customers, suppliers, potential entrants and substitute products; the quoted sentence on industry structure.
- Henderson, B. (1970). The Product Portfolio. Boston Consulting Group. Growth and market share as drivers of each product's cash needs and cash generation; the two quoted cash rules; the categories of cash cows, stars, question marks and dogs.
- Wack, P. (1985). Scenarios: Uncharted Waters Ahead. Harvard Business Review (September 1985). First-generation scenarios that quantify alternative outcomes of obvious uncertainties, and the quoted sentence that such scenarios are not helpful to decision makers; Shell's decision scenarios; predetermined elements versus uncertainties; the author's biography (head of the business environment division of Shell's group planning department; developed Shell's scenario planning system with Edward Newland).
- Porter, M. E. (1996). What Is Strategy?. Harvard Business Review (November–December 1996). Strategic positioning as “performing different activities from rivals' or performing similar activities in different ways”; the quoted sentence on the essence of strategy being in the activities.
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