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    Strategy Analysis & Choice: Strategic Management: Concepts & Cases 13 Edition Fred David

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    gulfam ashraf

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    Strategy Analysis & Choice: Strategic Management: Concepts & Cases 13 Edition Fred David

    Uploaded by

    gulfam ashraf
    105 views23 pages

    Original Title

    Chapter 6 Part 3

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    Copyright:

    © All Rights Reserved
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    Download as ppt, pdf, or txt
    105 views23 pages

    Strategy Analysis & Choice: Strategic Management: Concepts & Cases 13 Edition Fred David

    Uploaded by

    gulfam ashraf

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    You are on page 1of 23

    Chapter 6 Part 2

    Strategy Analysis & Choice

    Strategic Management:
    Concepts & Cases
    13th Edition
    Fred David

    Copyright © 2011 Pearson Education, Inc. Ch 6 -1


    Publishing as Prentice Hall
    Strategy-Formulation Framework
    SWOT Matrix

    SPACE Matrix

    Stage 2: BCG Matrix


    The Matching Stage

    IE Matrix

    Grand Strategy Matrix

    Copyright © 2011 Pearson Education, Inc. Ch 6 -2


    Publishing as Prentice Hall
    The Internal-External Matrix

     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

    Copyright © 2011 Pearson Education, Inc. Ch 6 -3


    Publishing as Prentice Hall
    Copyright © 2011 Pearson Education, Inc. Ch 6 -4
    Publishing as Prentice Hall
    IE Matrix

     Based on two key dimensions


     The IFE total weighted scores on the x-axis
     The EFE total weighted scores 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

    Copyright © 2011 Pearson Education, Inc. Ch 6 -5


    Publishing as Prentice Hall
    Strategy-Formulation Framework
    SWOT Matrix

    SPACE Matrix

    Stage 2: BCG Matrix


    The Matching Stage

    IE Matrix

    Grand Strategy Matrix

    Copyright © 2011 Pearson Education, Inc. Ch 6 -6


    Publishing as Prentice Hall
    Grand Strategy Matrix

     Tool for formulating alternative


    strategies
     Based on two dimensions
     Competitive position
     Market growth

    Copyright © 2011 Pearson Education, Inc. Ch 6 -7


    Publishing as Prentice Hall
    RAPID MARKET GROWTH
    Quadrant II Quadrant I
    1. Market development 1. Market development
    2. Market penetration 2. Market penetration
    3. Product development 3. Product development
    4. Horizontal integration 4. Forward integration
    5. Divestiture 5. Backward integration
    6. Liquidation 6. Horizontal integration
    WEAK 7. Related diversification
    STRONG
    COMPETITIVE COMPETITIVE
    POSITION Quadrant III Quadrant IV
    POSITION
    1. Retrenchment 1. Related diversification
    2. Related diversification 2. Unrelated diversification
    3. Unrelated diversification 3. Joint ventures
    4. Divestiture
    5. Liquidation

    SLOW MARKET GROWTH


    Copyright © 2011 Pearson Education, Inc. Ch 6 -8
    Publishing as Prentice Hall
    Grand Strategy Matrix

    Quadrant I

    Excellent strategic position


    Concentrationon current
    markets/products
    Take risks aggressively when
    necessary
    Copyright © 2011 Pearson Education, Inc. Ch 6 -9
    Publishing as Prentice Hall
    Grand Strategy Matrix

    Quadrant II

    Evaluate present approach


    How to improve
    competitiveness
    Rapid market growth requires
    intensive strategy
    Copyright © 2011 Pearson Education, Inc. Ch 6 -10
    Publishing as Prentice Hall
    Grand Strategy Matrix

    Quadrant III

    Compete in slow-growth industries


    Weak competitive position
    Drastic changes quickly
    Cost & asset reduction
    (retrenchment)
    Copyright © 2011 Pearson Education, Inc. Ch 6 -11
    Publishing as Prentice Hall
    Grand Strategy Matrix

    Quadrant IV

    Strong competitive position


    Slow-growth industry
    Diversification
    to more
    promising growth areas

    Copyright © 2011 Pearson Education, Inc. Ch 6 -12


    Publishing as Prentice Hall
    Strategy-Formulation Analytical
    Framework

    Quantitative Strategic
    Stage 3: Planning Matrix
    The Decision Stage (QSPM)

    Copyright © 2011 Pearson Education, Inc. Ch 6 -13


    Publishing as Prentice Hall
    QSPM

    Quantitative Strategic Planning Matrix

    Technique designed to determine


    the relative attractiveness of feasible
    alternative actions

    Copyright © 2011 Pearson Education, Inc. Ch 6 -14


    Publishing as Prentice Hall
    QSPM Strategic Alternatives
    Key External Factors Weight Strategy 1 Strategy 2 Strategy 3
    Economy
    Political/Legal/Governmental
    Social/Cultural/Demographic/
    Environmental
    Technological
    Competitive
    Key Internal Factors
    Management
    Marketing
    Finance/Accounting
    Production/Operations
    Research and Development
    Management Information
    Systems

    Copyright © 2011 Pearson Education, Inc. Ch 6 -15


    Publishing as Prentice Hall
    Steps to Develop a QSPM

    1. Make a list of the firm’s key external


    opportunities/threats and internal
    strengths/weaknesses in the left column
    2. Assign weights to each key external and
    internal factor

    Copyright © 2011 Pearson Education, Inc. Ch 6 -16


    Publishing as Prentice Hall
    Steps to Develop a QSPM

    3. Examine the Stage 2 (matching) matrices,


    and identify alternative strategies that the
    organization should consider implementing
    4. Determine the Attractiveness Scores
    5. Compute the Total Attractiveness Scores
    6. Compute the Sum Total Attractiveness
    Score

    Copyright © 2011 Pearson Education, Inc. Ch 6 -17


    Publishing as Prentice Hall
    QSPM

    Advantages

    Sets of strategies considered


    simultaneously or sequentially
    Integration of pertinent external &
    internal factors in the decision-
    making process

    Copyright © 2011 Pearson Education, Inc. Ch 6 -18


    Publishing as Prentice Hall
    QSPM

    Limitations

    Requires intuitive judgments &


    educated assumptions
    Only as good as the prerequisite
    inputs

    Copyright © 2011 Pearson Education, Inc. Ch 6 -19


    Publishing as Prentice Hall
    Cultural Aspects of Strategy
    Choice

    Organization Culture
    A set of values, beliefs, attitudes,
    customs, norms, personalities,
    heroes and heroines that describe a
    firm
    Successful strategies depend on
    support of the firm’s culture
    Copyright © 2011 Pearson Education, Inc. Ch 6 -20
    Publishing as Prentice Hall
    Politics of Strategy Choice

    Politics in Organizations

    Hierarchy of command
    Career aspirations
    Allocation of scarce resources

    Copyright © 2011 Pearson Education, Inc. Ch 6 -21


    Publishing as Prentice Hall
    Politics of Strategy Choice

    Political Tactics for Strategists

    Equifinality

    Satisfying

    Generalization

    Higher-order issues
    Political access on important issues
    Copyright © 2011 Pearson Education, Inc. Ch 6 -22
    Publishing as Prentice Hall
    Governance Issues

    Board of Directors Roles & Responsibilities

    Control & oversight over management


    Adherence to legal prescriptions
    Consideration of stakeholders’ interests
    Advancement of stockholders’ rights

    Copyright © 2011 Pearson Education, Inc. Ch 6 -23


    Publishing as Prentice Hall

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