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Step 4: SWOT Analysis and Strategy Formulation

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Meliza Tanya

on 11 December 2012

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Transcript of Step 4: SWOT Analysis and Strategy Formulation

Planning & Strategic Management Strategy Formulation SWOT Analysis > process of deciding best course of action for accomplishing organizational objectives and hence achieving organizational purpose. After conducting environment scanning, managers formulate corporate, business and functional strategies.
Corporate Strategy > Identifies the set of business, markets, or industries in which the organization competes and distribution of resources among those businesses.
Step 4 SWOT Analysis
and
Strategy Formulation Strengths, Weaknesses,
Opportunities, Threats
> helps managers summarize the relevant, important facts from their external and internal analysis. > Most important result of a SWOT analysis is the ability to draw conclusions about the attractiveness of the company’s situation and the need for strategic action.
3 ASPECTS Corporate Strategy Business Strategy Functional Strategy Four Basic Alternatives Concentration - strategy focuses on a single business competing in a single industry. Vertical Integration - strategy involves expanding the domain of the organization into supply channels or to distributors. Concentric Diversification - involves moving into new business that are related to the company's original core business. Conglomerate Diversification -
strategy that involves expansion into unrelated businesses. Business Strategy > major actions by which an organization builds and strengthens its competitive position in the marketplace. Two Generic Business Strategy Low-Cost Strategy - a strategy an organization uses to build competitive advantage by being efficient and offering a standard, no-frills products. Differentiation Strategy - a strategy an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions. Functional Strategy > strategy implemented by each functional area of the organization to support the organization's business strategy. > typical functional area includes:
~ production
~ human resource
~ marketing
~ research and development
~ finance
~distribution Strengths include skilled management, positive cash flows and well-known and highly regarded brands. Weaknesses include lack of spare production capacity and absence of reliable suppliers. Opportunities include new technology that could make the supply chain more efficient. Threats include the possibility that competitors will enter the undeserved niche once it has been shown profitable. > comparison of strengths, weaknesses, opportunities, threats that helps executives formulate strategy. ranging from very specialized to highly diverse include skilled management, positive cash flows and well-known and highly regarded brands. include lack of spare production capacity and absence of reliable suppliers. include new technology that could make the supply chain more efficient. include the possibility that competitors will enter the undeserved niche once it has been shown profitable.
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