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Strategy Analysis & ChoiceStrategy Analysis & Choice

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-- Establishing long-term objectives-- Generating alternative strategies-- Selecting strategies to pursue-- Best alternative - achieve mission & objectives

Nature of Strategy Analysis & Choice

Strategy Analysis & Choice

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SWOT Matrix

Strengths-Opportunities (SO)

Weaknesses-Opportunities (WO)

Strengths-Threats (ST)

Weaknesses-Threats (WT)

Four Types of Strategies

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SOSO Strategies Strategies

Use a firm’sinternal strengthsto take advantage

of external opportunities

SOStrategies

StrengthsWeaknesses

OpportunitiesThreats

SWOT

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WOWO Strategies Strategies

Improving internalweaknesses by

taking advantageof external

opportunities

WOStrategies

StrengthsWeaknesses

OpportunitiesThreats

SWOT

Copyright 2005 Prentice Hall 6

STST Strategies Strategies

Use a firm’s strengthsto avoid or

reduce the impactof external

threats

STStrategies

StrengthsWeaknesses

OpportunitiesThreats

SWOT

Copyright 2005 Prentice Hall 7

WTWT Strategies Strategies

Defensive tacticsaimed at reducing

internal weaknesses &

avoidingenvironmental

threats

WTStrategies

StrengthsWeaknesses

OpportunitiesThreats

SWOT

Copyright 2005 Prentice Hall 8

SWOT MatrixSWOT MatrixStrengths –

S

List Strengths

Weaknesses – W

List Weaknesses

Opportunities – O

List Opportunities

SO Strategies

Use strengths to take advantage of

opportunities

WO Strategies

Overcoming weaknesses by

taking advantage of opportunities

Threats – T

List Threats

ST Strategies

Use strengths to avoid threats

WT Strategies

Minimize

weaknesses and avoid threats

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Develop a new employee benefits package

= Strong union activity (threat)

+Poor employee morale (weakness)

Develop new products for older adults

=Decreasing numbers of young adults (threat)

+Strong R&D (strength)

Pursue horizontal integration by buying competitor's facilities

=Exit of two major foreign competitors form the industry (opportunity)

+Insufficient capacity (weakness)

Acquire Cellfone, Inc.=20% annual growth in the cell phone industry (opportunity)

+Excess working capacity (strength)

Key Internal Factor Key External Factor Resultant Strategy

Matching Key Factors to Formulate Alternative Strategies

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Size

Market Growth, Pricing

Market Diversity

Competitive Structure

Industry Profitability

Social

Environmental

Legal

HumanSize

Growth

Share

Position

Profitability

Technological Position

Strengths Weaknesses

Image

Pollution

People

Industry Attractiveness

High Medium Low

Hig

hM

ediu

mL

ow

Build

Hold

Harvest

Bu

sin

ess

Un

it P

osit

ion

ايجاد و تحكيم موقعيت

حفظ موقعيت

رك موقعيتت

متوسكمط

زياد

ادزي

ستو

مط

مك

جذابيت صنعت

د حوا

ت عي

وقم

يعت

صن

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BCG MatrixBCG Matrix

Dogs

IV

Cash Cows

III

Question Marks

I

Stars

II

Relative Market Share PositionHigh1.0

Medium.50

Low0.0

Ind

us

try

Sa

les

Gro

wth

Ra

te

High+20

Low-20

Medium0