L#5 wk;5 Strategic Analysis Choice .pptx

Strategic Analysis Choice
Describe a three-stage framework for choosing among alternative strategies.
Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and QSPM.
Identify important behavioral, political, ethical, and social responsibility considerations in strategy analysis and choice. Describe a three-stage framework for choosing among alternative strategies.
Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and QSPM.
Identify important behavioral, political, ethical, and social responsibility considerations in strategy analysis and choice.
Describe a three-stage framework for choosing among alternative strategies.
Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and QSPM.
Identify important behavioral, political, ethical, and social responsibility considerations in strategy analysis and choice.
Describe a three-stage framework for choosing among alternative strategies.
Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and QSPM.
Identify important behavioral, political, ethical, and social responsibility considerations in strategy analysis and choice.
Describe a three-stage framework for choosing among alternative strategies.
Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and QSPM.
Identify important behavioral, political, ethical, and social responsibility considerations in strategy analysis and choice.
Describe a three-stage framework for choosing among alternative strategies.
Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and QSPM.
Identify important behavioral, political, ethical, and social responsibility considerations in strategy analysis and choice.
vDescribe a three-stage framework for choosing among alternative strategies.
Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and QSPM.
Identify important behavioral, political, ethical, and social responsibility considerations in strategy analysis and choice.
Describe a three-stage framework for choosing among alternative strategies.
Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and QSPM.
Identify important behavioral, political, ethical, and social responsibility considerations in strategy analysis and choice.
Describe a three-stage framework for choosing among alternative strategies.
Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and QSPM.
Identify important behavioral, political, ethical, and social responsibility considerations in strategy analysis and choice.
Describe a three-stage framework for choosing among alternative strategies.
Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and QSPM.
Identify important behavioral, political, ethical, and social responsibility considerations in strategy analysis and choice.
Describe a 3-stage framework for choosing among alternative strategies.
Explain how to develop a SWOT analysis .

1. Topic 6: Strategic Analysis and Choice Source: Fred r. david,14 th edition, Strategic Management, concepts and cases,

2. Learning objectives Describe a three-stage framework for choosing among alternative strategies. Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and QSPM. Identify important behavioral, political, ethical, and social responsibility considerations in strategy analysis and choice.

3. Strategy analysis and choice - alternative strategies derive from; Strategic analysis involves evaluating an organizations current strategy to determine its effectiveness and identify areas of improvement. Vision Mission Objective External audit Internal audit Past successful strategies

4. The strategy –formulation analytical framework

5. Strategy formulation framework - stage 1 – input stage Summarizes the basic input information needed to formulate strategies. Consists of EFE (external factor evaluation) Matrix . The IFE (Internal factor evaluation) Matrix, and the Competitive Profile Matrix (CPM).

6. THE INPUT STAGE External Factor Evaluation EFE: a strategic management tool used to evaluate the company’s external environment. It helps in identifying and assessing the impact of external factors both opportunities and treats that affects an organizational performance. Internal Factor Evaluation IFE: strategic management tool used to assess the internal environment by focusing on evaluating the company’s strengths and weaknesses on how well it has fully utilize its resources. CPM Competitive Profile Matrix (CPM): strategic management tool used to evaluate and compare a company’s competitive position relating to its major competitors.

7. Strategy formulation framework - stage 2 – matching stage Focuses on generating feasible alternative strategies by aligning key external and internal factors. Techniques includes the SWOT Matrix, the Strategic Position and Action Evaluation Matrix (SPACE), the Boston Consulting Group (BCG) Matrix, the Internal- External (IE) Matrix and the Grand Strategy Matrix.

8. SWOT Matrix List the firm’s key external opportunities List the firm’s key external threats List the firm’s key internal strengths List the firm’s key internal weaknesses Match internal strengths with external opportunities. Thus SWOT helps managers develop four types of strategies; SO (strength-opportunities) strategies WO (weaknesses-opportunities) strategies ST (strengths-threats) strategies WT (weaknesses-threats) strategies

9. Limitations with SWOT matrix Does not show how to achieve a competitive advantage Provides a static assessment in time May lead the firm to overemphasize a single internal or external factor in formulating strategies.

10. Space Matrix 4-quadrants indicate whether the most appropriate strategy is: Aggressive – a strong competitive position and favorable industrial environment. Some of its strategies are; market penetration, market and product development, innovation etc.. Conservative – a strong internal environment but low growth and competitive strength. This are businesses not generating good cash flow and cannot achieve growth. Defensive : a strategic position with high growth but low competitive strength. Competitive : High growth, high competitive strength. A good position in rapid growing industry that has strong competitive position and can capitalize on the growth opportunities available.

11. The Space Matrix

12. Factors that make up the space matrix axes

13. Stage 2 – The Matching Stage - (A) BCG matrix Graphically portrays differences among divisions in terms of relative market share position and industry growth rate. Allows a multinational organisation manage its portfolio of businesses by examining the relative market share position and the industry growth rate of each division relative to all other divisions in the organisation. Relative market shares are in four positions; Market Share Market growth rate

14. The BCG Matrix Note: The major benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions

15. The Internal –External Matrix - The Matching Stage Positions an organization's various divisions in a nine-cell display. Similar to BCG Matrix except the IE Matrix: requires more information about the divisions strategic implications of each matrix are different Based on two key dimensions; the IFE total weighted scores on the x-axis the EFE total weighted score on the y-axis Divided into three major regions; Grow and build – cells I, II or IV Hold and maintain – Cells III, V, or VII Harvest or divest – cells VI, VIII, or IX.

16. The internal – external (IE) matrix

17. The Grand Matrix A tool used to evaluate a company’s strategic options by placing them into a grid that helps in assessing their potential based on two key evaluation dimensions: Market (industry) Growth : This dimension assesses the attractiveness of the industry or market in which the company operates. It considers whether the market is growing, stable, or declining. Competitive Position : This dimension evaluates the company's current position in the market relative to competitors. It considers factors like market share, brand strength, and resource capabilities.

18. The Grand Strategy Matrix Quadrant I – continued concentration on current markets (market penetration and market development) and products (product development) is an appropriate strategy. Quadrant II – (a) unable to complete effectively, and (b) need to determine why the firm’s current approach is ineffective and how the company can best change to improve its competitiveness Quadrant III – (a) must make some drastic changes quickly to avoid further decline and possible liquidation, and (b) extensive cost and asset reduction (retrenchment) should be pursued first. Quadrant IV – have characteristically high cash-flow levels and limited internal growth needs and often can pursue related or unrelated diversification successfully.

19. The Grand Strategy Matrix

20. The Decision Stage – Stage 3 Involves the Quantitative Strategic Planning Matrix (QSPM) Reveals the relative attractiveness of alternative strategies and thus provides objective basis for selecting specific strategies. QSPM – (a) objectively indicates which alternative strategies are best, (b) uses input from stage 1 analysis and matching results from stage 2 analyses to decide objectively among alternative strategies.

21. Steps in a QSPM Make a list of the firm’s key external opportunities/threats and internal strengths/weaknesses in the left column of the QSPM. Assign weights to each key external and internal factor Examine the stage 2 (matching) matrices, and identify strategies that the organisation should consider implementing. Determine the attractiveness scores (AS) Compute the Total Attractiveness Scores Compute the Sum Total Attractiveness Score.

22. The Quantitative Strategic Planning Matrix - QSPM

23. The Politics of Strategy Choice Political maneuvering consumes valuable time, subverts organizational objectives, diverts human energy, and results in the loss of some valuable employees. Political biases and personal preferences get unduly embedded in strategy choice decisions. The hierarchy of command in an organisation, combined with the career aspirations of different people and the need to allocate scare resources, guarantees the formation of coalitions of individuals who strive to take care of themselves first and the organisation second, third, or fourth.

24. The End