Boards use established strategic frameworks to evaluate whether management’s proposals can create and sustain a clear competitive advantage.

Porter’s Five Forces & The Resource-Based View

• Porter’s Five Forces Analysis: The board evaluates the structural profit potential of an industry by analyzing five key forces: the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products, and the intensity of competitive rivalry.

• The Resource-Based View (VRIO Framework): To understand if an internal asset can provide a sustained competitive advantage, the board assesses it against four clear criteria:

Blue Ocean Strategy Architecture

Boards use Blue Ocean strategy frameworks to encourage management to move away from crowded, highly competitive markets (“Red Oceans”) and proactively create new, uncontested market spaces (“Blue Oceans”). This involves changing the traditional value-cost trade-off by breaking industry conventions, lowering costs where value is low, and investing in unique features that create new demand.