The different types of business frameworks and explain the purpose of a cost-benefit analysis

Strategic Frameworks

These frameworks focus on long-term competitive positioning and organizational direction. They help leaders understand the market, competitors, and internal capabilities.

Purpose: To define, analyze, and execute the overall strategy for achieving business goals.

Examples:

Porter's Five Forces: Used to analyze the competitive intensity and market attractiveness of an industry by looking at the threat of new entrants, the bargaining power of buyers and suppliers, the threat of substitute products, and competitive rivalry.

SWOT Analysis: A simple but effective tool used to identify the organization's internal Strengths and Weaknesses, and external Opportunities and Threats.

Balanced Scorecard (BSC): A framework that provides a holistic view of business performance by measuring progress across four perspectives: financial, customer, internal business processes, and learning and growth.

2. Operational Frameworks

These frameworks focus on improving efficiency, quality, and workflow within the organization's day-to-day activities.

Purpose: To streamline processes, reduce waste, and enhance productivity and quality control.

Examples:

Sample Answer

The purpose of a cost-benefit analysis (CBA) is to systematically compare the total expected costs of a proposed action or investment with its total expected benefits. It serves as a decision-making tool to determine whether the benefits of a project or policy outweigh its costs, thereby establishing the feasibility and desirability of the proposed action.

🏗️ Types of Business Frameworks

Business frameworks are conceptual structures used to organize, analyze, and manage business processes, strategies, and challenges. They provide a standardized way of thinking about complex situations. The different types of frameworks can be generally categorized by their focus: