Strategy Frameworks

Module 03

Strategy Frameworks

The frameworks worth knowing, what each is actually for, how to size a market, and — most importantly — when not to use any of them.

Frameworks are scaffolding for thinking, not answers. A beginner reaches for a framework to look smart; a good consultant reaches for one because it forces a specific question into the open. Learn these, then learn their limits — a framework applied to the wrong problem is worse than no framework, because it manufactures false confidence.

SWOT — the warm-up

Strengths, Weaknesses (internal), Opportunities, Threats (external). The most famous and the most abused. SWOT is fine for getting a messy situation onto one page, but on its own it's just four lists. The value is the move after: which strength can we aim at which opportunity, and which weakness exposes us to which threat? Use it to start a conversation, never to end one.

Porter's Five Forces — is this industry worth being in?

This explains why some industries are reliably profitable and others brutal, regardless of how well individual companies are run. Profit gets competed away by five forces: rivalry among competitors, threat of new entrants, threat of substitutes, buyer power, and supplier power. Where all five are intense, almost everyone struggles. Where you can find or build a position shielded from them, profit is durable. Use it to judge an industry's attractiveness and find the defensible spot within it.

The Business Model Canvas — the whole model on one page

Nine connected boxes — customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partners, cost structure. The practical successor to Module 1's value loop: a single sheet showing exactly how a business creates, delivers, and captures value. Excellent for stress-testing a new venture (yours included) or quickly mapping a client's.

Ansoff Matrix — the four ways to grow

When a client asks "how do we grow?", this sorts the options by risk. Two axes — existing vs new products, existing vs new markets — give four moves: market penetration (sell more of what you have to who you have — safest), product development (new products to existing customers), market development (existing products to new customers/regions), and diversification (new products to new markets — riskiest). Most companies should exhaust penetration before reaching for diversification; founders often do the reverse because new things feel exciting.

BCG Matrix — where to put the money

For a company with several products, plot each on market growth versus your market share: Stars (invest), Cash Cows (milk for cash), Question Marks (decide — double down or quit), Dogs (usually exit). Blunt, but a clear way to talk about portfolio and capital allocation.

Blue Ocean — stop fighting, go elsewhere

Instead of competing head-on in a bloody "red ocean" of rivals, create uncontested space by changing what you compete on. Cirque du Soleil didn't out-circus the circus; it dropped animals and stars (cost) and added theatrical artistry (new value), reaching a different audience. A useful creativity prompt — but be skeptical: most claimed blue oceans are red oceans the speaker hasn't looked at carefully.

Market sizing — TAM, SAM, SOM

Investors, founders, and your own venture all need this, and it's where bluffing gets exposed. TAM (Total Addressable Market) — everyone who could conceivably want this. SAM (Serviceable Addressable Market) — the slice you could actually reach with your model and geography. SOM (Serviceable Obtainable Market) — the realistic share you can win in a few years. The discipline is building the number bottom-up (number of potential customers x what they'd pay) rather than the lazy top-down "if we just get 1% of a huge market." Top-down 1%-of-a-billion claims are a red flag every experienced person discounts immediately.

When NOT to use a framework

Don't deploy a framework when the answer is already obvious (a company with a 9-month cash runway doesn't need Five Forces — it needs to fix cash, now). Don't use one to look thorough when you haven't done the underlying thinking. Never let neat boxes flatten an important detail that doesn't fit. The framework serves the problem; the problem never serves the framework.

Key takeaway

Know what each tool is for: SWOT to lay out a situation, Five Forces to judge an industry, the Canvas to map a model, Ansoff to sort growth options by risk, BCG to allocate across a portfolio, Blue Ocean to break out of competition, TAM/SAM/SOM to size the prize. Pick the one that forces the question your client actually needs answered — and be willing to use none.

For Orelis & the app

The temptation will be to make the app spray frameworks at every problem — it looks impressive and is easy to generate. Resist it. The differentiated product chooses the right framework (or declines to use one) and explains why. Encode the selection logic, not just the frameworks. "Here's why Five Forces is the wrong lens for your problem, and here's the better one" is the judgment that makes your app feel like a real consultant rather than a framework vending machine.

Test yourself

Q1A friend wants to open a third independent coffee shop on a street that already has six. Which framework cuts to the heart of it, and what would it reveal?
Show a worked answer
Porter's Five Forces. Low barriers to entry, intense rivalry (six already), easy substitutes (home brewing, the chain nearby), and buyers with all the power (a competitor is 30 seconds away). It reveals a structurally unattractive spot — the honest advice is to find genuine differentiation (a Blue Ocean angle) or reconsider the location.
Q2A profitable bakery owner says 'we want to grow — let's open a clothing line.' Use a framework to push back constructively.
Show a worked answer
Ansoff. A clothing line is diversification — new product, new market — the riskiest quadrant, and it abandons the bakery's hard-won advantages. Walk them back through cheaper, safer growth first: market penetration (more visits, bigger baskets, catering), product development (new baked goods to the same loyal customers), or market development (a second location, wholesale to cafes). Diversification might be right eventually, but only after the safer quadrants are exhausted.
Q3A founder pitches 'the market is worth £50 billion and we only need 1% to be huge.' Why does that set off alarm bells, and what would you ask instead?
Show a worked answer
It's a top-down market-sizing claim, the classic bluff: '1% of something huge' assumes share rather than earning it, and ignores who you can actually reach. Ask for a bottom-up number: how many specific customers can you realistically reach, what will each pay, and what share can you win in three years (SOM)? A credible small number built from the bottom beats an impressive big number built from a percentage.