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Chapter 4 Page 123




      STRATEGIC MANAGEMENT IS CONCERNED WITH
      ESTABLISHING THE PROPER ORGANISATION
AND
      MATCHING THE ORGANISATIONAL FACTORS WITH
      ENVIRONMENTAL FACTORS


                   INVOLVES AN ANALYSIS OF

•      ORGANISATIONAL FACTORS
      ( STRENGTHS AND WEAKNESSES OF THE ORGANISATION )

•     ENVIRONMENTAL FACTORS
      ( THREATS AND OPPORTUNITIES IN THE BUSINESS ENVIRONMENT )
Chapter 4 Page 123




                  SWOT ANALYSIS
                       IS
   PRIME AND PRIMARY STEPS IN STRATEGIC MANAGEMENT

OTHER TERMS

SCOT - STRENGTHS, CONSTRAINTS , OPPORTUNITIES AND
       THREATS
ETOP - ENVIRONMENTALTHREATS AND OPPORTUNITIES PROFILE
EFE - EXTERNAL FACTORS EVALUATION
IFE - INTERNAL FACTORS EVALUATION
Chapter 4 Page 124




                      MARKETING
STRENGTHS

•   STRONG BRAND IMAGE
•   HIGH QUALITY PRODUCT
•   STRONG DISTRIBUTION NETWORK
•   EFFICIENT AND MOTIVATED SALES FORCE

WEAKNESSES

•   POOR BRAND IMAGE
•   POOR QUALITY PRODUCT
•   WEAK DISTRIBUTION
•   LOW MORALE AND POOR SALES FORCE
Chapter 4 Page 124




                       PRODUCTION
STRENGTHS

•   ECONOMICS OF SCALES
•   STATE OF THE ART TECHNOLOGY
•   EFFICIENT INPUT SOURCING
•   STRONG R&D SUPPORT

WEAKNESSES

•   HIGH COST DUE TO SMALL SIZE
•   OBSOLETE TECHNOLOGY
•   INEFFICIENT INPUT SOURCING
•   NO R& D
Chapter 4 Page 124




                             FINANCE

STRENGTHS

•   COMFORTABLE DEBT- EQUITY RATIO
•   LARGE INTERNAL ACCRUALS
•   HIGH DIVIDENDS AND MARKET CAPITALISATION
•   HIGH CREDIT RATING


WEAKNESSES

•   LOP - SIDED CAPITAL STRUCTURE
•   HIGH INTEREST PAYMENTS
•   POOR RESERVES
•   LOW CREDIT RATING
Chapter 4 Page 125




                OPPORTUNITIES / THREATS
                 ( REGULATORY / POLITICAL )

OPPORTUNITIES

•   DELICENSING
•   DERESERVATIONS
•   MRPTA RELAXATIONS
•   IMPORT LIBERALISATION
•   LIBERALISATION OF FOREIGN INVESTMENT ANDTECHNOLOGY
•   CAPITAL MARKET REFORMS

THREATS

•   OPPORTUNITIES FOR SOME ONE, ARE THREATS TO SOME OTHERS
Chapter 4 Page 125




DELICENSING IS AN OPPORTUNITY TO

•   ENTER NEW BUSINESS
•   EXPAND EXISTING BUSINESS

POSESS THREAT TO

•   EXISTING FIRMS ENJOYING BENEFITS OF
    PROTECTED MARKET
Chapter 4 Page 126




    TECHNIQUES FOR ENVIRONMENTAL ANALYSIS

•   VERBAL AND WRITTEN INFORMATION

•   SEARCH AND SCANNING

•   SPYING

•   FORECASTING




                                        GULECK
Chapter 4 Page 127




           STRATEGY ( SWOT )

   STRATEGY FORMULATION INVOLVES RELATING

 ORGANISATIONAL STRENGTHS AND WEAKNESSES

TO ENVIRONMENTAL THREATS AND OPPORTUNITIES
Chapter 4 Page 127




TOWS MATRIX

WT OR MINI-MINI STRATEGY- MINIMISE THE WEAKNESSES AND
                          THREATS

WO OR MINI-MAXI STRATEGY- MINIMISING THE WEAKNESSES AND
                          MAXIMISING THE OPPORTUNITIES

ST OR MAXI-MINI STRATEGY- USES ORGANISATION’S STRENGTHS
                          WITH ENVIRONMENTAL THREATS

SO OR MAXI-MAXI STRATEGY- USES ORGANISATIONS STRENGTHS
                         TO EXPLOIT THE OPPORTUNITIES
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Strategic Management - SWOT Analysis & Strategic Formula

  • 1. Chapter 4 Page 123 STRATEGIC MANAGEMENT IS CONCERNED WITH ESTABLISHING THE PROPER ORGANISATION AND MATCHING THE ORGANISATIONAL FACTORS WITH ENVIRONMENTAL FACTORS INVOLVES AN ANALYSIS OF • ORGANISATIONAL FACTORS ( STRENGTHS AND WEAKNESSES OF THE ORGANISATION ) • ENVIRONMENTAL FACTORS ( THREATS AND OPPORTUNITIES IN THE BUSINESS ENVIRONMENT )
  • 2. Chapter 4 Page 123 SWOT ANALYSIS IS PRIME AND PRIMARY STEPS IN STRATEGIC MANAGEMENT OTHER TERMS SCOT - STRENGTHS, CONSTRAINTS , OPPORTUNITIES AND THREATS ETOP - ENVIRONMENTALTHREATS AND OPPORTUNITIES PROFILE EFE - EXTERNAL FACTORS EVALUATION IFE - INTERNAL FACTORS EVALUATION
  • 3. Chapter 4 Page 124 MARKETING STRENGTHS • STRONG BRAND IMAGE • HIGH QUALITY PRODUCT • STRONG DISTRIBUTION NETWORK • EFFICIENT AND MOTIVATED SALES FORCE WEAKNESSES • POOR BRAND IMAGE • POOR QUALITY PRODUCT • WEAK DISTRIBUTION • LOW MORALE AND POOR SALES FORCE
  • 4. Chapter 4 Page 124 PRODUCTION STRENGTHS • ECONOMICS OF SCALES • STATE OF THE ART TECHNOLOGY • EFFICIENT INPUT SOURCING • STRONG R&D SUPPORT WEAKNESSES • HIGH COST DUE TO SMALL SIZE • OBSOLETE TECHNOLOGY • INEFFICIENT INPUT SOURCING • NO R& D
  • 5. Chapter 4 Page 124 FINANCE STRENGTHS • COMFORTABLE DEBT- EQUITY RATIO • LARGE INTERNAL ACCRUALS • HIGH DIVIDENDS AND MARKET CAPITALISATION • HIGH CREDIT RATING WEAKNESSES • LOP - SIDED CAPITAL STRUCTURE • HIGH INTEREST PAYMENTS • POOR RESERVES • LOW CREDIT RATING
  • 6. Chapter 4 Page 125 OPPORTUNITIES / THREATS ( REGULATORY / POLITICAL ) OPPORTUNITIES • DELICENSING • DERESERVATIONS • MRPTA RELAXATIONS • IMPORT LIBERALISATION • LIBERALISATION OF FOREIGN INVESTMENT ANDTECHNOLOGY • CAPITAL MARKET REFORMS THREATS • OPPORTUNITIES FOR SOME ONE, ARE THREATS TO SOME OTHERS
  • 7. Chapter 4 Page 125 DELICENSING IS AN OPPORTUNITY TO • ENTER NEW BUSINESS • EXPAND EXISTING BUSINESS POSESS THREAT TO • EXISTING FIRMS ENJOYING BENEFITS OF PROTECTED MARKET
  • 8. Chapter 4 Page 126 TECHNIQUES FOR ENVIRONMENTAL ANALYSIS • VERBAL AND WRITTEN INFORMATION • SEARCH AND SCANNING • SPYING • FORECASTING GULECK
  • 9. Chapter 4 Page 127 STRATEGY ( SWOT ) STRATEGY FORMULATION INVOLVES RELATING ORGANISATIONAL STRENGTHS AND WEAKNESSES TO ENVIRONMENTAL THREATS AND OPPORTUNITIES
  • 10. Chapter 4 Page 127 TOWS MATRIX WT OR MINI-MINI STRATEGY- MINIMISE THE WEAKNESSES AND THREATS WO OR MINI-MAXI STRATEGY- MINIMISING THE WEAKNESSES AND MAXIMISING THE OPPORTUNITIES ST OR MAXI-MINI STRATEGY- USES ORGANISATION’S STRENGTHS WITH ENVIRONMENTAL THREATS SO OR MAXI-MAXI STRATEGY- USES ORGANISATIONS STRENGTHS TO EXPLOIT THE OPPORTUNITIES
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