PARTS Model- Critical Summary

The PARTS Model is a multi-competitor framework that organisations can utilise to identify elements within their business that can be manipulated to achieve optimal outcomes. The PARTS model extends on GAME theory concepts and introduces the idea that competitors can both cooperate and compete. It instructs organisations to develop competitive strategy by addressing the five elements: Players Added value Rules of the game Tactics and; Scope

Each element is discussed on a practical basis below.

Players
The PARTS model introduces the concept of players as a key component of strategic analysis. Analysis is used to identify a value net of all participants within the market including customers, suppliers, complementors, and competitors. This was the first approach to cover this wider range of stakeholders and has now become a central element of standard industry analysis. Applying this principle on a practical basis helps organisations develop an awareness of all participants within a market and encourages the identification of strategic alliances that can benefit the organisation. A short fall of this model is the lack clear guidelines on which strategy should be taken and the large quantity of unknown factors that are in play.

Added Value
The element of added value moves away from the traditional concept of value adding and instructs the participant to consider what the net gain will be for the total industry for any change of strategy. This concept is an important one and assists in testing the practicality of the concept. For example, will a new low cost business, which under cuts its competitors increase the total size of the market or will it just dilute the size of the market by commencing a price war with a race to the bottom. Applying this element to competitive strategy can help organisation maintain their viability.

Rules of the Game

The element of rules of the game presents an ambiguous instruction for organisations applying this theory. The rules of the game suggests that successful organisations bend the rules through innovation and create their own path while it conflictingly stresses the importance of abiding by rules and customs. However, if the theory is applied practically organisations looking to push the boundaries could do so by taking calculated risks.

Tactics
The element of tactics highlights a broad term that is used many times in competitive strategy and relates to the tactical actions organisations take via functional areas within their business. While the theory is sound, this element of the model lacks guidance on which strategy organisations should take and provides little insight on how tactical decisions can be rationalised. It also relies heavily on organisations having a clear view of their competitors strategies, capabilities, and intentions which in reality is highly unlikely.

Scope
The element of scope is a very practical factor of competitive strategy. It instructs organisations to identify who, what, and where it will focus its resources and attention. During this phase organisations identify competitors versus complementors. Strategy can be developed and modelling can be done to determine the best course of action to be taken if a number of different variables occur.

In summary the PARTS model provides organisations with an interactive framework for developing competitive strategy and assists in identifying elements which can be leveraged for maximum gain. The model reveals the previously unidentified benefits of cooperating with competitors, as opposed to going head to head with all forms of competition. Shortfalls of the model include: The game is stationary All elements must be fully specified and understood All players must be game theorists Does not provide clear guidelines on how to address each element Adapts a win or lose fast approach

However, these issues are overcome by the following advantages: Interactive framework Identifies cooperation as a competitive strategy