Business Strategy

STRATEGY FORMULATION:
SITUATION ANALYSIS AND

BUSINESS STRATEGY
Salvacion, Charles Jourdan M

Escullar, Emmanuel F.
Learning
Objectives
01 Organize environmental and
organizational information using
a SWOT approach and the SFAS
matrix
02 Understand the competitive
and cooperative strategies
available to corporations
03 List the competitive tactics that
would accompany competitive
strategies
04 Identify the basic types of
strategic alliances
SITUATIONAL ANALYSIS:
SWOT APPROACH
Strategy formulation
 concerned with developing a corporation’s
mission, objectives, strategies and policies
Situation analysis
 the process of finding a strategic fit between
external opportunities and internal strengths
while working around external and internal
weaknesses
SWOT
 acronym used to describe the
particular Strengths, Weaknesses,
Opportunities and Threats that are
potential strategic factors for a
specific company
 Strategy = opportunity/capacity
 Opportunity has no real value unless a
company has the capacity to take
advantage of that opportunity.
CRITICISMS OF SWOT ANALYSIS
 It is simply the opinions of those filling out the
boxes.
 Virtually everything that is a strength is also a
weakness.
 Virtually everything that is an opportunity is

also a threat.
 Adding layers of effort does not improve the
validity of the list.
 It uses a single point in time approach.

 There is no tie to the view from the customer.
 There is no validated evaluation approach.
GENERATING A STRATEGIC
FACTORS ANALYSIS SUMMARY
(SFAS) MATRIX
 SFAS (Strategic Factors Analysis

Summary) Matrix
 summarizes an organization’s
strategic factors by combining the
external factors from the EFAS Table
with the internal factors from the
IFAS Table
STRATEGIC FACTOR ANALYSIS SUMMARY (SFAS) MATRIX
FINDING A PROPITIOUS NICHE
 Propitious niche
 so well-suited to the firm’s
 As a niche grows, so can a company
internal and external within that niche – by increasing its
environment that other operation’s capacity or through
corporations are not likely to alliances with larger firms.
challenge or dislodge it
 Niches can also change p sometimes
 Strategic window faster than a firm can adapt to that
 a unique market opportunity change.
that is available for a
particular time
REVIEW OF MISSION AND OBJECTIVES
 A re-examination of an organization’s current mission and objectives

must be made before alternative strategies can be generated and
evaluated.
 Performance problems can derive from inappropriate (narrow or
too broad) mission statements and objectives.
 A company’s objectives can also be inappropriately stated.
 There can be gap between planned and achieved objectives.
 When gap occurs, either the strategies have to be changed to

improve performance or the objectives need to be adjusted
downward to be more realistic.
The essence of
Business Strategies strategy is
choosing what not
to do
 Business strategy
 focuses on improving the competitive – Michael Porter
position of a company’s or business
unit’s products or services within the
specific industry or market segment that
the company or business unit serves
 competitive, cooperative
(competitive-battling against all
competitors for advantage.
Cooperative- working with one or more
companies to gain advantage against other
competitors.)
Competitive strategy raises the
following questions:
 Should we compete on the
basis of lower cost (and thus
price), or should we
differentiate our products or
services on some basis other
than cost, such as quality or
service?
PORTER’S COMPETITIVE STRATEGIES
 Cost leadership  Focus
 ability of a company or a business  ability of a company to
unit to design, produce and provide unique and
market a comparable product superior value to a
more efficiently than its particular buyer group,
competitors segment of the market line
 Differentiation or geographic market
 ability of a company to provide unique
and superior value to the buyer in terms
of product quality, special features or
after-sale service
 Porter proposed that a
firm’s competitive
advantage in an industry
is determined by its
competitive scope—that
is, the breadth of the
company’s or business
unit’s target market.
(before using one of the generic
competitive advantage, the unit
must choose the range of product
varieties it will produce, the
distribution channels, the types of
buyers, the geographical areas in
which it will sell, and array of
related industries it will also
 Cost leadership
 lower-cost competitive strategy that aims at the
broad mass market and requires “aggressive
construction of efficient-scale facilities, vigorous
pursuit of cost reductions from experience, tight
cost and overhead control, avoidance of marginal
customer accounts, and cost minimization”
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STRATEGY FORMULATION:

SITUATION ANALYSIS AND

Salvacion, Charles Jourdan M

 Virtually everything that is an opportunity is

 It uses a single point in time approach.

 SFAS (Strategic Factors Analysis

 A re-examination of an organization’s current mission and objectives

 There can be gap between planned and achieved objectives.

 When gap occurs, either the strategies have to be changed to

Contents Contents Contents

Your Picture Here

You can simply impress your audience and add a

Your Text Here Your Text Here

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Your Text Here Your Text Here

Get a modern PowerPoint Presentation that is beautifully

Get a modern PowerPoint Presentation that is beautifully

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