STRATEGY FORMULATION Business Research 1

VG Orjalo2 SWOT/TOWS Analysis SWOT Analysis refers to the listing of identified stengths, weaknesses, opportunities and threats resulting from internal audit and external environment assessment. SWOT Analysis is done for the location-specific suppliers, industry participants, buyers and substitutes of the proposed business problem. *SWOT Matrix *Strategy Formulation (SO, ST, WO, WT) This section ends with the formulation of strategies that match the functional objectives listed in Chapter 1 of the study, using a visual and text format. For example, a marketing study objective in Chapter 1 should be shown as a market strategy in the S-O, S-T, W-O and W- T listings in the matrix. Primary data collection is necessary to validate the secondary data collected from the municipality or barangay where the business establishment is located. (David, 2005)

TOWS/SWOT Matrix Identify and list opportunities (O) and threats (T) from industry data Identify and list weaknesses (W) and strengths (S) threats from company data Match opportunities to strengths and weaknesses (S-O & W-O strategies) Match threats to strengths and weaknesses (S-T & O-T strategies) VG Orjalo 3

Strategies Integration Intensive Diversification Defensive Michael Porter Forward, backward, horizontal & vertical Market penetration, market development, product development Concentric, horizontal & conglomerate Retrenchment, divestiture & liquidation Cost leadership, differentiation & focus VG Orjalo4

Integration Strategies: Ownership or increased control Forward Gain ownership or increased control over distribution or retailers Backward Seek ownership or increased control of a firm’s suppliers VG Orjalo 5 Horizontal Seek ownership or increased control of a firm’s competitors Vertical Expand product or service coverage/offerings

Intensive Strategies: Efforts to improve competitive position Market penetration Market development Product development Increase market share for present products & services in present markets Introducing present products or services to new geographic areas Seeks increased sales by improving or modifying present products or services VGO6

Diversification Strategies: Adding and managing diverse business activities Concentric Horizontal Conglomerate Adding new but related products Adding new but unrelated products for present customers Adding new but unrelated products VG Orjalo7

Defensive Strategies: Subtracting from present business activities Retrenchment Divestiture Liquidation Cost and asset reduction to reverse declining sales and profits Selling a division or part of an organization Selling a company’s assets, in parts, for their tangible worth VGO8

Michael Porter’s Generic Strategies Cost leadership Differentiation Focus Forward, backward & horizontal integration Product flexibility, greater compatibility, lower cost, improved service, lesser maintenance, greater convenience or more features Market penetration & market development VGO9

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List of References Alsem, Karel Jan. (2007). Strategic Marketing: An Applied Perspective. Singapore: McGraw Hill David, Fred R. (2005). Strategic Management: An Integrated Approach,( 10 th edition). Pearson Education South Asia Pte Ltd. Heizer, Jay and Render, Barry. (2006). An Introduction to Operations Management. Singapore: Pearson Education South Asia Pte. Ltd. League of Cities of the Philippines. (2008). Up-scaling Poverty Focused City Development Strategies. Makati: Cities Alliance. Moyer, R. Charles, McGuigan, James R. & Rao, Ramesh P.(2006). Contemporary Financial Management Fundamentals. Singapore: Thomson Learning Asia. Panopio, Isabel and Raymundo, Adelisa. (2004). Sociology: Focus on the Philippines. Quezon City: Ken, Inc. Saunders, Dr. Mark, Lewis, Philip & Thornhill, Dr. Adrian. (1997). Research Methods for Business Students. London: Pitman Publishing. Szuchman, Lenore T. (2005). Writing with Style: APA Style Made Easy, (3 rd edition). Canada: Thomson Learning, Inc. 11