1. Four Types of Strategies
Threats
Opportunities
Weaknesses
Strengths
(SWOT) WT
Strategies ST WO SO
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2. SO Strategies Threats Opportunities Weaknesses Strengths (SWOT)
Use a firm’s internal strengths to take advantage of external opportunities
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3. WO Strategies Threats Opportunities Weaknesses Strengths (SWOT)
Improving internal weaknesses by taking advantage of external opportunities
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4. ST Strategies Threats Opportunities Weaknesses Strengths (SWOT)
Using firm’s strengths to avoid or reduce the impact of external threats.
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5. WT Strategies Threats Opportunities Weaknesses Strengths (SWOT)
Defensive tactics aimed at reducing internal weaknesses and avoiding environmental threats.
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6. Strategy Analysis & Choice
The SWOT Matrix
List the firm’s key external opportunities
List the firm’s key external threats
List the firm’s key internal strengths
List the firm’s key internal weaknesses
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7. Strategy Analysis & Choice
The SWOT Matrix
Match internal strengths with external opportunities and record the resultant SO Strategies
Match internal weaknesses with external opportunities and record the resultant WO Strategies
Match internal strengths with external threats and record the resultant ST Strategies
Match internal weaknesses with external threats and record the resultant WT Strategies
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8. SWOT Matrix WT Strategies ST Strategies Threats-T WO Strategies
Minimize weaknesses and avoid threats
ST Strategies
Use strengths to avoid threats
Threats-T
List Threats
WO Strategies
Overcome weaknesses by taking advantage of opportunities
SO Strategies
Use strengths to take advantage of opportunities
Opportunities-O
List Opportunities
Weaknesses-W
List Weaknesses
Strengths-S
List Strengths
Leave Blank
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9. Strategy Analysis & Choice
Boston Consulting Group Matrix
(BCG)
Enhances multidivisional firms’ efforts to formulate strategies
Autonomous divisions (or profit centers) constitute the business portfolio
Firm’s divisions may compete in different industries requiring separate strategy
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10. Strategy Analysis & Choice
Boston Consulting Group Matrix
(BCG)
Graphically portrays differences among divisions
Focuses on market share position and industry growth rate
Manage business portfolio through relative market share position and industry growth rate
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11. Strategy Analysis & Choice
Boston Consulting Group Matrix
(BCG)
Relative market share position defined:
Ratio of a division’s own market share in a particular industry to the market share held by the largest rival firm in that industry.
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12. Relative Market Share Position Industry Sales Growth Rate
BCG Matrix
Relative Market Share Position
High
1.0
Medium
.50
Low
0.0
Industry Sales Growth Rate
High
+20
Dogs IV
Cash Cows
III
Question Marks I
Stars II
Medium
Low
-20
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13. Strategy Analysis & Choice
BCG Matrix
Question Marks
Low relative market share position yet compete in high-growth industry.
Cash needs are high
Case generation is low
Decision to strengthen (intensive strategies) or divest
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14. Strategy Analysis & Choice
BCG Matrix
Stars
High relative market share and high industry growth rate.
Best long-run opportunities for growth and profitability
Substantial investment to maintain or strengthen dominant position
Integration strategies, intensive strategies, joint ventures
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15. Strategy Analysis & Choice
BCG Matrix
Cash Cows
High relative market share position, but compete 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 becomes weak—retrenchment or divestiture
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16. Strategy Analysis & Choice
BCG Matrix
Dogs
Low relative market share position and compete in slow or no market growth
Weak internal and external position
Decision to liquidate, divest, retrenchment
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17. Strategy Analysis & Choice
Grand Strategy Matrix
Popular tool for formulating alternative strategies
Based on two evaluative dimensions
Competitive position
Market growth
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18. Grand Strategy Matrix RAPID MARKET GROWTH Quadrant II
Market development
Market penetration
Product development
Horizontal integration
Divestiture
Liquidation
Quadrant I
Market development
Market penetration
Product development
Forward integration
Backward integration
Horizontal integration
Concentric diversification
WEAK
COMPETITIVE
POSITION
STRONG
COMPETITIVE
POSITION
Quadrant III
Retrenchment
Concentric diversification
Horizontal diversification
Conglomerate diversification
Liquidation
Quadrant IV
Concentric diversification
Horizontal diversification
Conglomerate diversification
Joint ventures
SLOW MARKET GROWTH
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19. Strategy Analysis & Choice
Grand Strategy Matrix
Quadrant I
Excellent strategic position
Concentration on current markets and products
Take risks aggressively when necessary
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20. Strategy Analysis & Choice
Grand Strategy Matrix
Quadrant II
Evaluate present approach seriously
How to change to improve competitiveness
Rapid market growth requires intensive strategy
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21. Strategy Analysis & Choice
Grand Strategy Matrix
Quadrant III
Compete in slow-growth industries
Weak competitive position
Drastic changes quickly
Cost and asset reduction indicated (retrenchment)
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22. Strategy Analysis & Choice
Grand Strategy Matrix
Quadrant IV
Strong competitive position
Slow-growth industry
Diversification indicated to more promising growth areas
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