499 Mod. 2 Case for Paula Hog
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M2References.docxReferences:
SWOT
Please Review the definition of Strengths, Weaknesses, Opportunities, and Threats (SWOT) in slides 2-3 of the Grand Strategy Selection Matrices PowerPoint presentation. Also, be sure to take careful note of the SWOT diagram included on Slide 4. At this point, don’t be overly concerned with the definitions of each of the four cells, but note how S, W, O, and T are used to decide the most appropriate, generalized strategic direction (don’t be concerned with the rest of the slides—we will cover their content in Module 3).
Now that you understand the definition of strengths, weaknesses, opportunities, and threats, let’s put these concepts together to formulate a SWOT. Please read Section 4.6: SWOT Analysis on pages 136-138 of the Mastering Strategic Management text.
If you would like addition information on SWOT, read the following Quick MBA article:
SWOT analysis. (2010). Quick MBA. Retrieved from http://www.quickmba.com/strategy/swot/
Please read Section 4.2, entitled “Resource-Based Theory” (pages 108-118) of the Mastering Strategic Management text. Notice how organizations having “strategic resources” (i.e., resources that are rare, highly valuable, or non-substitutable) enjoy competitive advantages. Hopefully, those resources are not easily duplicated, allowing the competitive advantage to persist over the long-run, and thus, allowing for a sustainable competitive advantage, or SCA.
Let’s begin our study of the external environment by reading Section 3.2: “The Relationship between an Organization and Its Environment” on pages 67-69 of the Mastering Strategic Management text.
Michael Porter’s Five Forces model assists organizations in the assessment of the operating environment. The Five Forces consist of the following:
1. Threat of Entry (or Potential Entrants): This is the likelihood that new competitors will enter the industry. This threat is dependent on such factors as the costs of capital (the costs required to “break in”), the nature of the competition (minimal or fierce), and the number of unserved or underserved customers;
2. Rivalry (amongst industry competitors): The level of competition between the competitors in an industry may be fierce (as in the soda industry), or minimal (as is true when a new product or service is early in the life cycle, and it first enters into a market);
3. Buyer Power: Dependent on the nature of supply and demand, buyers can have weak or strong purchasing power. When a product or service is in short supply and demand is high, buyers tend to have little power. Conversely, when there is ample supply of a product or service and the demand for that product or service is low, buyers will have greater power.
4. Power of Suppliers: This term refers to the suppliers of raw materials or suppliers of services that are needed by the organization in the production of a product or the delivery of a service offered by the organization. A raw material that is in high demand will give suppliers higher power, for example, than if the demand for that commodity is very low. The scarcity of raw materials will yield higher supplier power.
5. Availability of Substitutes: The ready availability of substitute products or services threatens the marketability of an organization’s products or services. For example, Blockbuster (a company that rented movies) went out of business because substitute services such as NetFlix, the evolution of cable television movie rentals, and web-enabled movie rentals (such as Amazon’s “Prime Video” service) became increasingly more readily available.
For a very good overview of Porter’s Five Forces, please read Section 3.4: “Evaluating the Industry” (pages 84-98) of the Mastering Strategic Management text.
