SWOT analysis.
ACCOUNTING123
Chapter6-StrategyAnalysisChoice-1.pptxStrategy Analysis and choice Chapter Six Part 1 of 2
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A Comprehensive Strategic-Management Model
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The Strategy-Formulation Analytical Framework
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Matching Key External and Internal Factors to Formulate Alternative Strategies
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The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix helps managers develop four types of strategies:
SO (strengths-opportunities) Strategies
WO (weaknesses-opportunities) Strategies
ST (strengths-threats) Strategies
WT (weaknesses-threats) Strategies
SWOT/TOWS Matrix
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This should say “SO Strategies”
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SO – Strategies
Add four new in-store promotions monthly (S4, O3)
Add two new repair and service persons (S6, O5)
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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
Match internal weaknesses with external opportunities, and record the resultant WO Strategies
Match internal strengths with external threats, and record the resultant ST Strategies
Match internal weaknesses with external threats, and record the resultant WT Strategies
Steps in producing the SWOT/TOWS Matrix
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This should say “SO Strategies”
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The Strategic Position & Action Evaluation (SPACE) Matrix
Two internal dimensions (financial position [FP] and competitive position [CP])
Two external dimensions (stability position [SP] and industry position [IP])
Most important determinants of an organization’s overall strategic position
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Example Strategy Profiles
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Example Strategy Profiles
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BCG Matrix
graphically portrays differences among divisions in terms of relative market share position and industry growth rate
allows a multidivisional organization to 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 organization
The Boston Consulting Group (BCG) Matrix
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The BCG Matrix
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The Internal-External (IE) Matrix
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Grand Strategy Matrix
based on two evaluative dimensions: competitive position and market (industry) growth
The Grand Strategy Matrix
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The Strategy-Formulation Analytical Framework
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Quantitative Strategic Planning Matrix (QSPM)
objectively indicates which alternative strategies are best
uses input from Stage 1 analyses and matching results from Stage 2 analyses to decide objectively among alternative strategies
The Quantitative Strategic Planning Matrix (QSPM)
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The Quantitative Strategic Planning Matrix (QSPM)
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1. Make a list of the firm’s key external
opportunities/threats and internal strengths/
weaknesses in the left column of the QSPM.
2. Assign weights to each key external and internal
factor.
3. Examine the Stage 2 (matching) matrices, and
identify alternative strategies that the organization
should consider implementing.
Steps in a QSPM
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4. Determine the Attractiveness Scores (AS).
5. Compute the Total Attractiveness Scores.
6. Compute the Sum Total Attractiveness Score.
Steps in a QSPM (cont.)
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Sets of strategies can be examined sequentially or simultaneously
Requires strategists to integrate pertinent external and internal factors into the decision process
Can be adapted for use by small and large for-profit and nonprofit organizations
Positive Features of the QSPM
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Always requires intuitive judgments and educated assumptions
Only as good as the prerequisite information and matching analyses upon which it is based
Limitations of the QSPM
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“Not only has the “right” corporate culture become the essence and foundation of corporate excellence, but success or failure of needed corporate reforms hinges on management’s sagacity and ability to change the firm’s driving culture in time and in tune with required changes in strategies.”
Cultural Aspects of Strategy Choice
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Board of directors
a group of individuals who are elected by the ownership of a corporation to have oversight and guidance over management and who look out for shareholders’ interests
Duties of the Board of Directors
Control & Oversight over Management
Adherence to Legal Prescriptions
Consideration of Stakeholder Interests
Advancement of Stockholders’ Rights
Governance Issues
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Board of Director Duties and Responsibilities
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Principles of Good Governance
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Strategies require regular reappraisal
Every org. needs to establish and communicate clear objectives and strategies
Use the tools described in this chapter (SWOT, SPACE, BCG, IE, QSPM) but also incorporate:
Behavioral
Cultural
Political
Conclusion
Aspects of strategy generation and selection
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Strategic ManageMent15thedition
Fred r. david | ForeSt r. david
a competitive advantage approach
conceptS and caSeS
