Uroosha Strategy Analysis & Choice

8/9/2019 Uroosha Strategy Analysis & Choice

1/30

&

Strategy ANALYSIS&Strategy ANALYSIS

CHOICECHOICE

UROOSHA NAEEM

UROOSHA NAEEM


2/30

Strategy FormulationStrategy Formulation

FrameworkFramework


3/30

Input StageInput Stage


4/30

Matching StageMatching Stage


5/30

Decision StageDecision Stage


6/30

Stage 2: Matching StageStage 2: Matching Stage Matching Stage focuses upon feasible

alternative strategies by aligning keyinternal and external factors.


7/30

SWOT MatrixSWOT Matrix

A SWOT Analysis is a strategicplanning tool used to evaluate theStrengths, weakness, Opportunities

and Threats involved in a business.Four types of strategies: 1:SO Strategies

2:WO Strategies 3:ST Strategies 4:WT Strategies


8/30

SWOT Matrix DevelopingSWOT Matrix Developing

StepsSteps1. Rank external opportunities2. Rank external threats3. Rank internal strength4. Rank internal weaknesses.5. Match internal strengths with external

opportunities and mention the result in the SOStrategies cell.

6. Match internal weaknesses with externalopportunities and mention the result in the WOStrategies cell..

7. Match internal strengths with external threatsand mention the result in the ST Strategies cell.8. Match internal weaknesses with external threats

and mention the result in the WT strategies cell.


9/30

SWOT MatrixSWOT MatrixLeave Blank Strengths S

List Strengths

Weaknesses W

List Weaknesses

Opportunities O

List Opportunities

SOStrategies

Use strengths to takeadvantage ofopportunities

WOStrategies

Overcoming weaknessesby taking advantage ofopportunities

Threats T

List Threats

STStrategiesUse strengths to avoidthreats

WTStrategiesMinimize weaknessesand avoid threats


10/30

Space MatrixSpace Matrix Space Matrix explains that what is

our strategic position and whatpossible action can be taken.


11/30

Space FactorsSpace Factorsn te rn a l S tra te g ic P o sitio n xte rn a l S tra te g ic P o sitio n

( )in a n cia l S tre n g th F SRisk involved in business

Return on investment

LeverageLiquidityWorking capital conditionCash flow

Debt to equity ratio

( )nvironmental Stability ESTechnological changesRate of inflation

Demand variabilityPrice range of competing productsCompetitive pressurePrice elasticity of demand

Political situationCompetitive pressure


12/30

Space FactorsSpace Factorsnternal Strategic Position xternal Strategic Position

( )ompetitive Advantage CAMarket shareProduct life cycle

Customer loyaltyCapacity, location & layout

-Technological know how

( )ndustry Strength ISGrowth potentialProfit potential

Financial stability,Productivity capacity utilization

Ease of entry into marketResource utilization


13/30

Space Matrix Preparation StepSpace Matrix Preparation Step1. Select a set of variables to relating to financial strength, competitive

advantage, environmental stability, and industry strength.2. Assign a numerical value ranging from +1 (worst) to +6 (best) to

each of the variables that make up the financial strength andindustry strength dimensions. Assign a numerical value ranging from-1 (best) to -6 (worst) to each of the variables that make up theenvironmental stability and competitive advantage dimensions.

3. Compute an average score and dividing by the number of variables4. Plot the average scores in the SPACE Matrix.5. Add the two scores on the x-axis and plot the resultant point on X.

Add the two scores on the y axis and plot the resultant point on Y.Plot the intersection of the new x y point.

6. Draw a directional vector from the origin of the SPACE Matrixthrough the new intersection point. This vector reveals the type ofstrategies recommended for the organization: aggressive,competitive, defensive, or conservative.


14/30

BCG MatrixBCG Matrix The BCG matrix is a well-known

portfolio management tool used inproduct life cycle theory.


15/30

BCG MatrixBCG Matrix

Question marks Units with lowmarket share in a fast-growingindustry. Require large amounts of

cash to grow their market share. Thecorporate goal must be to grow thebusiness. fall down into the dogscategory.

Stars Units with a high market sharein a fast-growing industry. Stars arethe leaders in the business but stillneed a lot of support for promotion aplacement.


16/30

BCG MatrixBCG Matrix

Cash cows Units with high marketshare in a slow-growing industry.Because of the low growth,

promotion and placementinvestments are low. Generate cashin excess of the amount of cash

needed.Dogs Units with low market share in a

slow-growing industry. Dogs shouldbe avoided and minimized.Expensive turn-around plans usually


17/30

IE MatrixIE Matrix

IE Matrix is strategic management toolused to analyze working conditionsand strategic position of a business.


18/30

IE Matrix DevelopmentIE Matrix Development

StepsSteps1. Based on two key dimensions IFE and EFE.2. Plot IFE total weighted scores on thex-axis and

the EFE total weighted scores on the y axis3. On thex-axis of the IE Matrix, an IFE total

weighted score of 1.0 to 1.99 represents a weakinternal position; a score of 2.0 to 2.99 isconsidered average; and a score of 3.0 to 4.0 isstrong.

4. On they-axis, an EFE total weighted score of 1.0to 1.99 is considered low; a score of 2.0 to 2.99 is

medium; and a score of 3.0 to 4.0 is high.5. IE Matrix 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


19/30

Grand Strategy MatrixGrand Strategy Matrix Grand strategy matrix it is popular

tool for formulating alternativestrategies. It is based on two major

dimensions

1. Market growth

2. Competitive position


20/30

20

u a d ra n t I V.1 Concentric diversification

.2 Horizontal diversification

.3

Conglomeratediversification

.4 Joint ventures

u a dr an t I I I.1 Retrenchment

.2 Concentric diversification

.3

Horizontal diversification

.4 Conglomeratediversification

.5 Liquidation

u a d r an t I.1 Market development

.2 Market penetration

.3 Product development

.4 Forward integration

.5 Backward integration

.6 Horizontal integration

.7 Concentric diversification

u a dr a n t I I.1 Market development

.2 Market penetration

.3 Product development

.4 Horizontal integration

.5 Divestiture

.6 Liquidation

APID MARKET GROWTH

LOW MARKET GROWTH

EAK OMPETITIVEPOSITIONSTRONG OMPETITIVEPOSITION


21/30

Grand Strategy MatrixGrand Strategy Matrix

Qurdant-1 Matrix are in an excellentstrategic position. These firms mustfocus on current market.Take risks

aggressively when necessary.Quadrant II need to evaluate their

present approach to the

marketplace. Rapid market growthrequires intensive strategy.


22/30

Grand Strategy MatrixGrand Strategy Matrix Quadrant III The firms fall in this

quadrant compete in slow-growthindustries and have weak competitive

positions. These firms must make somedrastic changes quickly to avoidpossible liquidation.

Quadrant IV have a strong competitive

position but are in a slow-growthindustry. It have the strength to launchdiversified programs into morepromising growth areas.


23/30

-trategy Formulation Framework

:tage 3he DecisionStage

uantitativeStrategiclanning Matrix( )SPM

Technique designed to determine therelative attractiveness of feasible

alternative actions


24/30

QSMP Matrix Developing StepsQSMP Matrix Developing Steps

1.Make a list of the firms key externalopportunities/threats and internalstrengths/weaknesses in the left column

2.Assign weights to each key external and

internal factor3. Examine the Stage 2 (matching)

matrices, and identify alternativestrategies that the organization should

consider implementing4. Determine the Attractiveness Scores(A.S)

5. Compare the Total AttractivenessScores

6. Compute the Sum Total Attractiveness


25/30

25

QSPM : information from IFEQSPM : information from IFEand EFEand EFE

e y In te rn al Facto rsM a n a g e m e n t

M a rke tin g

/Fin a n ce A cco u n tin g

/Pro d u ctio n O p e ra tio n s

R esearch a nd

D ev elop m en t

C o m p u te r In fo rm a tio n

System s . .u m to ta l A S

Strategy 3Strategy

2

Strategy

1

W e ig h tey Ex tern al Facto rsE c o n o m y

/ /Po litica l Le g a l G o v e rn m e nta l

/ /S o cia l C u ltu ra l D e m o g ra p

/h ic E n viro n m e n ta l

Te ch n o lo g ica l

C om p e titiv e

trategic Alternatives

: =AS 1 to 4 and blank if factor does not effect strategy TAS Weight x AS


26/30

Q S P M

. &1 Requires intuitive judgments educatedassumptions

.2 Only as good as the prerequisite inputs

Limitations

Advantages.1 Sets of strategies considered

simultaneously or sequentially. &2 Integration of pertinent external

internal factors in the decision makingprocess


27/30

Cultural Aspects Of StrategyCultural Aspects Of StrategyChoiceChoice

All organization have a culture.Culture include the set of shared values,

believes, attitudes, customs, norms,

personalities that describe a firm.Success often rests upon the supportthat strategies receive from a firmsculture.

Strategies that require fewer culturalchanges may be more attractivebecause

Extensive can take time and effect.


28/30

Politics of Strategy ChoicePolitics of Strategy Choice

All organization are political .Following tactics use by politician can

aid strategists. 1.equifinality 2.satisfy 3.generalization

4.focusnon higher-order issues 5.provide political access onimportant

issues


29/30

Corporate Governance IssuesCorporate Governance Issues

. o more than 2 directors current or former companyexecutives. o directors do business with the company. , ,udit compensation and nominating committees madeup f outside directors. %ach director attends at lest 75 of all meetings. udit committee meets at least four times a year. EO is not also the Chairperson of the Board

. hareholders have considerable power and informationo &hoose replace directors. tock options are considered a corporate expense. o interlocking directorships

usiness Week s principles of good governance


30/30

THE ENDTHE END

Documents

Uroosha Strategy Analysis & Choice