Kaplan and Porter Correlation
Strategic Resource Management
The correlation’s between Kaplan and Norton’s “Mastering the Management System” and Porters “Five Competitive Forces that Shape Strategy” are significant. Managers need to have a complete understanding of their company’s surroundings in order to change their strategy. These two articles combined could be considered a 2-step process in itself. Step one, analyzing the environment of an industry utilizing Porters Five Forces model and step two, following the five stages laid out by Kaplan and Norton. Taking advantage of both models will give executives a complete 360 degree view of their business while developing, implementing, and measuring their new strategy.
Porters five forces tool was designed to develop a view of a company’s external environment. The external environment is not only inclusive of the industry and its competitors, but an overall current state of affairs from an economic point of view. When management decides to begin investigating the idea of developing a new strategy, Porters five forces is a tool that is accepted as a starting point in the investigation. As a company should know its operating costs and profits, the five forces give an answer as to why the industry of said company are what they are (Porter, “The Five Forces That Shape Strategy” pg. 88). The five forces are composed of four forces that when combined produce a fifth. While having an understanding of each force is required, managers must not make common mistakes such as diving into one force to deeply or concentrating on all forces when only focus on the important ones are needed (Porter, “The Five Forces That Shape Strategy” pg. 88).
While Porter’s five forces is a starting point, his model was not designed to guide managers through the execution of implementing and measuring a new strategy. This is where Kaplan and Norton’s five stages from “Mastering the Management System” (MMS) can be taken advantage of. MMS is a tool to dive in to
The correlation’s between Kaplan and Norton’s “Mastering the Management System” and Porters “Five Competitive Forces that Shape Strategy” are significant. Managers need to have a complete understanding of their company’s surroundings in order to change their strategy. These two articles combined could be considered a 2-step process in itself. Step one, analyzing the environment of an industry utilizing Porters Five Forces model and step two, following the five stages laid out by Kaplan and Norton. Taking advantage of both models will give executives a complete 360 degree view of their business while developing, implementing, and measuring their new strategy.
Porters five forces tool was designed to develop a view of a company’s external environment. The external environment is not only inclusive of the industry and its competitors, but an overall current state of affairs from an economic point of view. When management decides to begin investigating the idea of developing a new strategy, Porters five forces is a tool that is accepted as a starting point in the investigation. As a company should know its operating costs and profits, the five forces give an answer as to why the industry of said company are what they are (Porter, “The Five Forces That Shape Strategy” pg. 88). The five forces are composed of four forces that when combined produce a fifth. While having an understanding of each force is required, managers must not make common mistakes such as diving into one force to deeply or concentrating on all forces when only focus on the important ones are needed (Porter, “The Five Forces That Shape Strategy” pg. 88).
While Porter’s five forces is a starting point, his model was not designed to guide managers through the execution of implementing and measuring a new strategy. This is where Kaplan and Norton’s five stages from “Mastering the Management System” (MMS) can be taken advantage of. MMS is a tool to dive in to