1. Strategy Analysis and Selecting
Chapter 7
Strategy Analysis and Selecting

2. Content Introduction of strategy analysis Types of strategies analysis
SWOT Matrix
SPACE Matrix
BCG Matrix
IE Matrix
Grand Strategy Matrix
Conclusion

3. Introduction Nature of Strategy Analysis & Choice
-- Establishing long-term objectives
-- Generating alternative strategies
-- Selecting strategies to pursue
-- Best alternative - achieve mission & objectives
Source:

4. SWOT Matrix
SWOT matrix is a way to analyze competitive position, both internal and external aspects of doing your business.
SWOT method is a key tool for company top officials to formulate strategic plans.
Each letter in SWOT matrix stands for:
S: Strengths
W: Weaknesses
O: Opportunities
T: Threats
Internal factors
External factors

5. SWOT Matrix Developing the SWOT There are 8 steps to develop a SWOT

6. SWOT Matrix Internal Factors External factors Strengths S Weaknesses W
Opportunities O
SO strategies
WO strategies
Threats T
ST strategies
WT strategies 6

7. SPACE Matrix
The Strategic Position and ACtion Evaluation matrix or short a SPACE Matrix is a strategic management tool that focuses on strategy formulation especially as related to the competitive position of an organization.
The SPACE matrix is based on 4 areas of analysis:
Financial Strength (FS)
Competitive Advantage (CA)
Environmental Stability (ES)
Industry Strength (IS)
Internal strategic dimension
External strategic dimension

8. SPACE Matrix
The SPACE matrix is broken down to four quadrants where each quadrant suggests a different type or a nature of a strategy:
Aggressive
Conservation
Defensive
Competitive
There are 7 steps to develop a SPACE matrix.

9. SPACE Matrix Steps to develop a SPACE matrix
Select a set of variables to define FS, CA, ES, & IS
Assign a numerical value:
From +1 to +6 to each FS & IS dimension
From -6 to -1 to each ES & CA dimension
Compute an average score for each FS, CA, ES, & IS

10. Steps to Developing a SPACE Matrix
Steps to develop a SPACE matrix (cont’d)
Plot the average score on the appropriate axis.
Add the average scores of CA and IS on the x-axis and plot the point.
Add the average scores of ES and FS on the y-axis and plot the point.
Draw a directional vector from the origin through the new intersection point.

11. Sample of a SPACE matrix

12. A completed SPACE matrix look like

13. BCG Matrix
The BCG matrix model is a portfolio planning model developed by Bruce Henderson of the Boston Consulting Group in the early 1970's.
BCG matrix is often used to prioritize which products within company product mix get more funding and attention.
The BCG model is based on classification of products into four categories, which focus on market-share position & industry growth rate.

14. BCG Matrix

15. BCG Matrix BCG STARS High relative market share and high growth rate
Best long-run opportunities for growth & profitability
Substantial investment to maintain or strengthen dominant position
Integration strategies, intensive strategies, joint ventures
=110148

16. BCG Matrix BCG Question mark
Low relative market share – compete in high-growth industry
Cash needs are high
Case generation is low
Decision to strengthen (intensive strategies) or divest
=110148

17. BCG Matrix
CASH COWS
High relative market share, competes in low-growth industry
Generate cash in excess of their needs
Milked for other purposes
Maintain strong position as long as possible
Product development, concentric diversification
If weakens—retrenchment or divestiture
=110148

18. BCG Matrix
DOGS
Low relative market share & compete in slow or no market growth
Weak internal & external position
Liquidation, divestiture, retrenchment
=110148

19. IE Matrix
The Internal-External (IE) matrix, is another strategic management tool used to analyze working conditions and strategic position of a business, which is based on an analysis of internal and external business factors that are combined into one suggestive model.
The IE matrix is based on the following two criteria:
Score from the EFE matrix -- this score is plotted on the y-axis.
Score from the IFE matrix -- plotted on the x-axis.

20. IE Matrix Steps to develop IE matrix
Record your organization’s IFE total score on the X-axis. (Chapter 5)
Record your organization’s EFE total score on the Y-axis. (Chapter 4)
Plot the location of your company in the appropriate sector from quadrant I to IX.

21. IE Matrix
Quadrant I,II,IV: Grow and Build: Market penetration, market development, product development.
Quadrant III,V,VII: Hold and Maintain: Market penetration, product development.
Quadrant VI,VIII,IX: Harvest or Divest: Retrenchment, divestiture, liquidation.

22. Grand Strategy Matrix Tool for formulating alternative strategies
Based on two dimensions
Competitive position (X-axis): can be either strong or weak, depending on such factors as market share, ability of the firm to compete on price and quality, customer recognition, etc.
Market growth (Y-axis): can be considered as either rapid or slow depending on the annual growth rate (sales) within the particular market/ industry in which the firm competes.
=110148

23. Weak Competitive Position Strong Competitive Position
Grand Strategy Matrix
Rapid Market Grow
Quadrant 2:
Market penetration
Market development
Product development
Horizontal integration
Divestiture
Liquidation
Quadrant 1:
Forward integration
Backward integration
Concentric diversification
Quadrant 3:
Retrenchment
Horizontal diversification
Conglomerate diversification
Quadrant 4:
Concentric Diversification
Conglomerate Diversification
Joint Ventures
Weak Competitive Position
Strong Competitive Position
Slow Market Grow

24. Grand Strategy Matrix Quadrant 2: Quadrant 1: Quadrant 3: Quadrant 4:
Evaluate present approach seriously
How to change to improve competitiveness
Rapid market growth requires intensive strategy
Quadrant 1:
Excellent strategic position
Concentration on current markets and products
Take risks aggressively when necessary
Quadrant 3:
Compete in slow-growth industries
Weak competitive position
Drastic changes quickly
Cost and asset reduction indicated (retrenchment)
Quadrant 4:
Strong competitive position
Slow-growth industry
Diversification indicated to more promising growth areas
fileticket=5QiypiXvRI4%3D&tabid=50620
&mid=110148

25. Conclusion
Strategy Analysis is really important for developing the company against the economic crisis or the competitors.
There are lots of strategies which created by the entrepreneur who face to the problem.
Although it has many choices, but we should consider about its limited.
Efficient strategy while in the right condition, and environment.

26. Thanks for your Attention !!!