1. PART 6: Strategy Analysis & Choice

2. Main Learning Objectives: Describe a three-stage framework for choosing among alternative strategies. Explain how to develop a SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix and QSPM. Identify various important factors in strategy analysis and choice.

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

4. Strategy Analysis & Choice
Alternative Strategies Derive From --
Vision
Mission
Objectives
External audit
Internal audit
Past successful strategies

5. Strategy Analysis & Choice
Generating Alternatives --
Participation in generating alternative strategies should be as broad as possible
Broad ولسع

6. Stage 2: The Matching Stage Stage 3: The Decision Stage
Comprehensive Strategy-Formulation Framework
Stage 1: The Input Stage
Stage 2: The Matching Stage
Stage 3: The Decision Stage

7. Strategy-Formulation Analytical Framework
Internal Factor Evaluation Matrix (IFE)
Stage 1: The Input Stage
External Factor Evaluation Matrix (EFE)
Competitive Profile Matrix (CPM)

8. Stage 1: The Input Stage Basic input information for the matching &
decision stage matrices
Requires strategists to quantify subjectivity
early in the process
Good intuitive judgment always needed

9. Strategy-Formulation Analytical Framework
SWOT Matrix
Strategic Position & Action
Evaluation (SPACE) Matrix
Stage 2: The Matching Stage
Boston Consulting
Group (BCG) Matrix
Internal-External (IE) Matrix
Grand Strategy Matrix

10. Stage 2: The Matching Stage
Match between organization’s internal resources & skills and the opportunities & risks created by its external factors

11. Stage 2: The Matching Stage
SWOT Matrix
Strengths
Weaknesses
Opportunities
Threats

12. Four Types of Strategies
SWOT Matrix
Four Types of Strategies
Strengths-Opportunities (SO)
Weaknesses-Opportunities (WO)
Strengths-Threats (ST)
Weaknesses-Threats (WT)

13. Strengths Weaknesses Opportunities
SO Strategies
Strengths Weaknesses Opportunities
Threats SWOT
Use a firm’s internal strengths to take advantage of external opportunities
SO Strategies

14. Strengths Weaknesses Opportunities
WO Strategies
Strengths Weaknesses Opportunities
Threats SWOT
Improving internal weaknesses by taking advantage of external opportunities
WO Strategies

15. Strengths Weaknesses Opportunities
ST Strategies
Strengths Weaknesses Opportunities
Threats SWOT
Use a firm’s strengths to avoid or reduce the impact of external threats
ST Strategies

16. Strengths Weaknesses Opportunities
WT Strategies
Strengths Weaknesses Opportunities
Threats SWOT
Defensive tactics aimed at reducing internal weaknesses & avoiding environmental threats
WT Strategies

17. SWOT Matrix Developing the SWOT List firm’s key internal Strengths
List firm’s key internal Weaknesses
List firm’s key external Opportunities
List firm’s key external Threats

18. SWOT Matrix Leave Blank Strengths – S List Strengths Weaknesses – W
List Weaknesses
Opportunities – O
List Opportunities
SO Strategies Use strengths to take advantage of opportunities
WO Strategies Overcoming weaknesses by taking advantage of opportunities
Threats – T
List Threats
ST Strategies Use strengths to avoid threats
WT Strategies Minimize weaknesses and avoid threats

19. Matching Key Factors to Formulate Alternative Strategies
Key Internal Factor
Key External Factor
Resultant Strategy
Develop a new employee benefits package =
Strong union activity (threat) +
Poor employee morale (weakness)
Develop new products for older adults
Decreasing numbers of young adults (threat)
Strong R&D (strength)
Pursue horizontal integration by buying competitor's facilities
Exit of two major foreign competitors from the industry (opportunity)
Insufficient capacity (weakness)
Acquire Cellfone, Inc.
20% annual growth in the cell phone industry (opportunity)
Excess working capacity (strength)

20. SWOT analysis for Oxfam International.
Figure 6.4 below is an example of SWOT analysis for Oxfam International. The name 'Oxfam' comes from the Oxford Committee for Famine Relief, founded in Britain in 1942.
Oxfam International was formed in 1995 by a group of independent non-governmental organizations. Their aim was to work together for greater impact on the international stage to reduce poverty and injustice.

21. SWOT analysis for Oxfam International.

22. Limitations with SWOT Matrix
Does not show how to achieve a competitive advantage
Provides a static assessment in time
May lead the firm to overemphasize a single internal or external factor in formulating strategies