6.1 Business management tools

SWOT separates internal strengths and weaknesses from external opportunities and threats.

It is useful only when each point is evidenced and linked to a choice.

Classify the factor by control and source, then turn it into an action.

A strong delivery network is a strength; a new regulation is a threat.

Do not list vague positives without evidence.

Ansoff compares market penetration, product development, market development and diversification by market/product novelty.

Risk usually rises as the business moves farther from known customers and capabilities.

Locate the proposal, then state the main uncertainty and capability gap.

Selling the current drink to current customers is penetration; a new drink for a new market is diversification.

The matrix is a risk lens, not a guaranteed growth ranking.

STEEPLE scans social, technological, economic, environmental, political, legal and ethical forces around a business.

It turns external change into scenarios and strategic questions, not predictions.

Identify the force, time horizon and affected decision.

A data law changes the design of a customer app and its compliance cost.

Do not treat all factors as equally likely or controllable.

BCG maps products by relative market share and market growth into stars, cash cows, question marks and dogs.

The categories suggest cash allocation but ignore synergies, margins and future uncertainty.

State the axes and decide whether investment, harvest or exit is justified.

A high-share, low-growth product may fund a high-growth question mark.

A dog is not automatically worthless if it supports another product.

A business plan connects the opportunity, strategy, operations, finance, risks and milestones.

Its value comes from coherent assumptions and review, not length.

Trace one assumption through market, resources, cash and implementation.

A launch plan links 2,000 units to staffing, stock, promotion and a cash buffer.

A plan is not proof that funding or demand will occur.

A decision tree represents choices, uncertain outcomes and payoffs so expected values and risks can be compared.

Probabilities and payoffs are assumptions; expected value does not show dispersion or ethics.

Label branches, multiply payoff by probability, sum outcomes and test sensitivity.

A launch with 0.6 chance of $100k and 0.4 chance of −$20k has expected value $52k before cost.

The highest expected value is not always the safest choice.

Mean, median, mode, range and standard deviation summarise a dataset; each reveals a different feature.

Outliers and skew can make the mean misleading, while a summary hides individual cases.

Choose the statistic that matches the distribution and decision.

Delivery times of 2,2,3,3,20 minutes have median 3 but mean 6; the outlier matters for capacity.

A summary is not causation or a forecast.

Circular models keep products and materials in use through repair, reuse, remanufacture, sharing or recycling while reducing waste.

Design, incentives, reverse logistics and customer behaviour determine whether value actually circulates.

Trace the product after use and identify the revenue and recovery mechanism.

A tool company leases durable drills, retrieves them, repairs them and leases them again.

Recycling alone may destroy more value than reuse or repair.

Force field analysis maps driving and restraining forces around a proposed change.

It clarifies where action can strengthen support or reduce resistance, but weights are subjective.

Name each force, rate its influence with evidence and choose an intervention.

Training strengthens a new software rollout while workload concerns are reduced by phased implementation.

The scores are not objective measurements.

A Gantt chart places project tasks on a timeline, showing duration, overlap, milestones and progress.

It supports coordination but does not by itself show task dependency or resource conflicts well.

Check sequencing, owners and slack, then update actual progress.

A website launch shows design before testing, with a milestone for approval.

A bar on a chart is not a completed outcome.

Hofstede’s dimensions compare broad cultural tendencies such as power distance and individualism to prompt cross-cultural questions.

Country-level averages are not rules for individuals; context, generation and within-country variation matter.

Use a dimension as a hypothesis, then validate with local evidence and stakeholders.

A manager checks whether a participative meeting format fits local expectations instead of assuming it does.

Do not stereotype employees from a national score.

Porter’s strategies are cost leadership, differentiation and focus; each requires a coherent source of advantage.

Trying to pursue incompatible advantages can leave a firm stuck in the middle.

Identify target scope, advantage and activities that reinforce it.

A focused premium bicycle maker differentiates for one segment rather than matching mass-market cost.

A slogan is not a strategy without supporting activities.

Contribution per unit is price minus variable cost and shows how each sale covers fixed costs and profit.

It supports short-run product or capacity choices when fixed costs are unchanged.

Calculate contribution, then test demand and capacity effects.

A $12 item with$7 variable cost contributes $5; 1,000 units contribute$5,000.

Contribution is not profit until fixed costs are covered.

Critical path analysis identifies the longest dependent sequence of project activities and the minimum completion time.

A delay on a critical activity delays the project unless resources or sequencing change; non-critical tasks have slack.

List durations/dependencies, find earliest/latest times and focus control on zero-slack work.

If A→B→C takes 3+4+5 days, that path takes 12 days and is critical unless another path is longer.

The critical path can change when durations or dependencies change.

Simple linear regression estimates the relationship between one explanatory variable and an outcome using a fitted line.

The slope describes association in the data, not proof that X causes Y; extrapolation is risky.

Inspect scatter, fit and residuals, then use the line only within a defensible range.

Past advertising spend may predict sales, but a new market shock can make the old relationship fail.

A high correlation does not establish causation.