The Five Forces That Shape Strategy

The Five Forces That Shape Strategy

The following are the five forces that shape strategy according to entrepreneur Alexander Djerassi examines each force in detail and then discusses how businesses can use them to create their powerful strategy for success. Each of these forces has a profound effect on the company’s ability to execute its business plan.

1. Political landscape

The political landscape can have a significant impact on businesses. Regulations, taxation, and other factors all contribute to the business environment. A change in government could mean new regulations or changes in tax rates that must be taken into account when planning future strategies.

When the Conservative party won the UK General Election in 2015, there were concerns among small businesses owners about potential increases in National Insurance Contributions (NICs) rates. The Conservative party subsequently announced that there would be no increase in NICs rates for employees earning below £42,000 per year. This announcement helped ease some of the concerns among business owners and showed that the Conservative party was committed to helping small businesses thrive.

According to Alexander Djerassi it is essential to keep political changes in mind when making strategic decisions. Regulations, taxation, and other factors can all change quickly.

2. Economic environment

The economic environment is another important factor to consider when making strategic decisions. The current state of the economy and changes in interest rates and other indicators can all have an impact on businesses.

When the global recession hit in 2008, many businesses had to make tough decisions about whether to lay off employees or close down completely. In some cases, companies were able to survive by restructuring their operations and becoming more efficient.

When making strategic decisions, it is important to be aware of the current state of the economy and how it might affect the business. Changes in interest rates or other economic indicators could have a big impact.

3. Technological advances (or lack thereof)

Technological advances can have a significant impact on businesses. When new technologies emerge, companies must decide whether to adopt them and how to do so. If they lag in technology, they could be at a disadvantage compared to their competitors.

In the early 2000s, many businesses were slow to adopt the internet. As a result, they lost out to competitors who were able to reach consumers online.

When making strategic decisions, it is vital to be aware of any significant technological advances.

4. Competition

Another critical factor to consider when making strategic decisions. A company’s competitors can greatly impact its ability to succeed. To be successful, a company must understand its competitors and how they differ from them.

When Apple first released the iPhone, it was priced at $599. This was much more expensive than other smartphones on the market. However, Apple was able to charge this price because of its strong brand image and high-quality products.

5. Social norms

This can also have a big impact on businesses. For example, a company might adopt specific social values to appeal to consumers. Alternatively, a company might face public backlash for not adopting certain social values.

In 2017, Starbucks announced that it would be closing all of its stores for racial bias training. This announcement came after two black men were arrested at a Starbucks store in Philadelphia.

When making strategic decisions, it is important to be aware of how its actions might reflect on social norms. If the company is seen as socially responsible, this could help attract new customers.


Article Editor

Pamela is a television journalist, humor writer and novelist. Her first novel, Allegedly, was released in 2015 by St. Martin’s Press. The book is available on Amazon and Barnes & Noble. She and her husband, Daniel, have a 3-year-old son, Carter.

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