Management Chapter 5

Question 1

What is Diamond-E-Framework?

Answer 1

Diamond-E-Framework is a road map for strategic analyses. It identifies key variables and structures relationships among them.

Question 2

What is the logic behind the Diamond-E-Framework?

Answer 2

1. Consistency: high consistency among variables of Diamond-E-Framework will lead to successful performance.
2. Coherence: means diamond-e-framework is complete on it’s own.
3. Alignment: means matching outside conditions and companies goals and abilities.

Question 3

Why do all strategic risks rise?

Answer 3

All strategic risks rise because of inconsistencies.

Question 4

What are some strategic risks?

Answer 4

1. Environment risk: happens because of inconsistency between strategy and environment.
   Short term:error in reading environment strategic failure
   Long term: as environment changes, strategies becomes no more useful
2. Capabilities risk: happens because of inconsistency between strategy and capabilities within the firm.
   Short term: strategic demand exceeds capacity to execute
   Long term: internal capabilities develop inconsistency with strategy

Question 5

What is diamond-e-analysis?

Answer 5

Diamond-e-analysis can be used to analyze if a strategy is good or not and it can be done by:

1. Asses usefulness of firms current strategy
2. Generate new ideas/strategic proposals
3. Evaluate specific strategic proposals

Question 6

What are the tools we can analyze environment with?

Answer 6

1. PEST Analyses:
   Political: law and regulation and typically government
   Economic: how is economy doing (Interest rates, inflation and recession)
   Social: what does society think, consumer behaviour and market demand
   Technological Analyses: Advancement in Technology
2. Porters five forces:
3. Threat of new entrants (when new completion comes in to compete)
4. Thereat of substitutes (availability of subsidize product)
5. Threat of bargaining power of suppliers (ability of supplies to shift up prices)
6. Threat of bargaining power of consumers (ability of consumers to shift down price)
7. Value Chain Analyses: end goal of this analyses is to figure out strengths and weakness of the business