5 questions across Easy, Medium, and Hard levels
SWOT = Strengths, Weaknesses, Opportunities, Threats. Internal factors: Strengths (competitive advantages, resources, capabilities) and Weaknesses (areas for improvement, resource gaps). External factors: Opportunities (market trends, unmet needs) and Threats (competition, regulations, economic changes). Used for strategic planning to leverage strengths, address weaknesses, capitalize on opportunities, and mitigate threats.
Framework for analyzing competitive dynamics: 1) Threat of new entrants (barriers to entry), 2) Bargaining power of suppliers (supplier concentration, switching costs), 3) Bargaining power of buyers (buyer concentration, price sensitivity), 4) Threat of substitutes (alternative products/services), 5) Competitive rivalry (number of competitors, industry growth). High forces = low profitability potential.
Market Penetration (Ansoff Matrix): selling existing products to existing markets to increase market share. Tactics: price reduction, increased promotion, product improvements. Lower risk. Market Development: taking existing products to new markets (geography, demographics, segments). Medium risk. Market Penetration is intensifying in current market; Market Development is expanding to new markets.
Blue Ocean Strategy (Kim & Mauborgne) involves creating uncontested market space making competition irrelevant, rather than competing in existing markets (Red Oceans). Key tools: Strategy Canvas, Four Actions Framework (Eliminate-Reduce-Raise-Create). Examples: Cirque du Soleil combined circus and theater, Nintendo Wii targeted non-gamers. Focus on value innovation simultaneously reducing costs and increasing buyer value.
Framework: 1) Strategic Fit - does it complement existing business? 2) Financial Analysis - DCF valuation, comparable transactions, revenue/EBITDA multiples. 3) Due Diligence - legal, financial, operational, cultural. 4) Integration Assessment - cost/complexity of integration, synergies (revenue + cost). 5) Risk Assessment - key person risk, customer concentration, regulatory issues. 6) Pricing - don't overpay; synergies are hard to capture.