The second set of assumptions is contained in the firm’s marketing model. This contains managers’ analysis of which customers the firm can most profitably target and knowledge about what their wants are. It also contains the analysis of the competition: what strategies competitors are likely to follow, what their strengths and weaknesses are, and what capabilities are needed to create a competitive advantage. Next is the operations model, which contains the analysis of the best way to structure the firm’s value chain to produce and deliver products and service to customers. Then comes the budgeting model which contains the key financial ratios management will use.
