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Strategic Factor Analysis Summary- Applicability in

the Case of City Tourism in Novi Sad (Serbia)
Nemanja Davidovic

Tamara Jovanovic

Department of Geography, Tourism and Hotel Management

Faculty of Sciences, University of Novi Sad
Novi Sad, Serbia
nemanja.davidovic@dgt.uns.ac.rs

Department of Geography, Tourism and Hotel Management

Faculty of Sciences, University of Novi Sad
Novi Sad, Serbia
jtamara@uns.ac.rs

Abstract - Strategy formulation and strategic planning is often

concerned with developing and organizations mission, vision,
objectives and strategies. The first step is always situation
analysis. Over the years, SWOT analysis has proven to be the
most widely used management technique. However, it has
drawbacks, mostly related to a single level of analysis and
absence of weights to reflect priorities. The SFAS (Strategic
Factor Analysis Summary) Matrix summarizes the strategic
factors, using weights, rating and weighted score. The results of
this study will provide situation analysis and open a process of
finding a strategic fit between external opportunities and internal
strengths while working around external threats and internal
weaknesses in the development of city tourism in Novi Sad,
Serbia.
Keywords - SFAS, tourism, Novi Sad

I.

INTRODUCTION

The fundamental underlying premise of strategy nowadays

becomes the notion that even a larger, more powerful
competitor can be defeated if it can be out-maneuvered using
strategic skill. As in the battlefield, so is in tourism:
organizations attempt to out-maneuver their competitors [1].
Decisions regarding the segments of the market they wish to
pursue and the type of tourism products they wish to develop
for their markets must all be carefully planned out in what is
known as the strategy [2]. The purpose of the strategy is to
make an organization (in this case, a city tourism destination)
adapt to its environment. There is a need to continually review
strategic objectives because the environment is always
changing. If there were only one ideal position, there would be
no need for strategy [3]. The term strategic management is
used synonymously with the term strategic planning. The
strategic planning is more often used in the business world,
whereas strategic management is often used in academia.
Strategic management is the most important activity
undertaken by any organization. How skillfully these activities
are carried out will determine the eventual long-term success or
failure of the organization [4]. The strategic planning process
consists of a careful analysis of the tourism industry and the
opportunities and threats that competitors and environmental
factors may bring. Tourism strategy represents a key challenge
to managers because of the nature of the products being sold
and of the complexities of the environment in which tourism
exists. In particular, strategy is formed by the fact that most

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tourism products are services rather than goods (because they

are intangible) [5]. The first step in strategy formulation is
strategic analysis.
The purpose of strategic analysis is to gather information
about the internal and external environment. External
environment is scanned to identify possible opportunities and
threats, whereas internal environment is scanned for strengths
and weaknesses. Strategic analysis is often referred to as
SWOT analysis. SWOT is however only one of the possible
techniques for situation analysis. SWOT is an acronym used to
describe the particular strengths, weaknesses, opportunities and
threats that are strategic factors for an organization. It has
proven to be the most widely used and enduring analytical
technique in strategic management [6]. A detailed internal and
external analysis is a necessary prerequisite for the SWOT
information because it emerges from the internal and external
analyses. The process sometimes involves an additional stage
of condensing SWOT into a survey of the key issues- those
which require the most urgent action or which the strategy
should be particularly designed to address [7]. If the
information from the analysis is flawed of insufficient, there is
no certainty that the strategy formulation will be the right one.
Once the destinations internal strengths and weaknesses and its
external opportunities and threats have been established, the
challenge becomes to select a strategy that will address the
weaknesses and threats and, at the same time, will build upon
its strengths and exploit its opportunities. Although it is the
most widely used management tool, SWOT is not a panacea.
Primary criticisms of SWOT analysis are: generation of
lengthy lists, ambiguity of words and phrases, only single level
of analysis and it uses no weights to reflect priorities. The
EFAS (External Factors Analysis Summary) and IFAS
(Internal Factors Analysis Summary) tables have been
developed to deal with many of the criticisms of SWOT
analysis. When used together, they are a powerful analytical set
of tools for strategic analysis. The SFAS (Strategic Factors
Analysis Summary) Matrix summarizes strategic factors by
combining the external factors from the EFAS Table with the
internal factors from the IFAS Table. Possible alternative
strategies can then be generated by referring to EFAS and
IFAS tables in generating TOWS (SWOT backwards) Matrix
[8].

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II.

RESEARCH METHODS

EFAS factors can be divided into known categories of

chances and threats. The ability of the organization to respond
to each of these factors is then analyzed, taking into
consideration their importance for that specific organization.
This is done by choosing up to 10 chances and threats
(individually) that have relevance to the organization and they
are sorted in the first column. In the second column, each of the
factors importance is assessed (with grades from 0 no
importance to 1 of great importance), depending on their
influence to the strategic positioning of the organization.
Greater the weight of factors, the bigger the influence that it
has on the future success of the company. Sum of the weight
has to be equal to 1, no matter the number of factors. Ability of
the organization to respond to each of these factors is rated in
the third column, with grades from 1 to 5 (1- inadequate, 5 excellent). This rating shows with which success organization
uses chances and responds to threats from the surrounding.
Multiplication of the weight of the factor and ability of the
organization to respond to it gives a weighted score for each
individual factor (fourth column). In the fifth column comment
is given about the choice of each factor and importance and
grade is analyzed. Total weighted score tells us how
successfully the organization reacts to the factors from the
external surrounding. With this, organizations of same industry
can be compared between themselves. Average organization in
any economy will always have a weighted score 3. Analysis of
the internal surrounding IFAS, often called organizational
analysis, is based on the identification and development of the
organizational resources. It is performed the same way as the
EFAS.
SFAS analysis synthesizes results of EFAS and IFAS
analysis and therefore becomes a very powerful technique of
the strategic analysis of the surrounding that has fully
responded to the shortcomings of the SWOT analysis. In SFAS
matrix strengths, weaknesses, chances and threats are
summarized into about 10 strategic factors. This is done by
choosing individual factors of EFAS and IFAS analysis that are
of the greatest importance to the organization and they are put
into first column. Next to the factors there is a label that says
whether the factor is strength, weakness, chance or a threat to
the organization. After that, importance of these factors is
evaluated again (with grades from 0 no importance to 1 of
great importance) depending on their influence on the strategic
positioning of the organization (second column). Total
importance must be equal to number 1. Ability of the
organization to respond to each of these factors is graded in the
third column, with grades from 1 to 5 (1- inadequate, 5 excellent. Multiplication of the weight of the factor and ability
of the organization to respond to it gives a weighted score for
each individual factor (fourth column). Total weighted score
tells us how successfully the organization has dealt with their
strategic factors. In the fifth column, explanations and
additional comments are written, for every factor. Final result
is the summary of the most important internal and external

strategic factors in one table. SFAS matrix represents the bases

for formulating strategy1
III.

RESULTS

From Table 1 (in appendix), we can see the External

Factor Analysis Summary (EFAS) of City Tourism in Novi
Sad. Geographic position of Novi Sad (Serbia) is favorable,
considering that it is located on corridor 10 and corridor 7 i.e.
river Danube, that is certainly one of the most significant water
roads in Europe. However, there is still space for further use of
this potential. Since March 2012, Republic of Serbia has
become a candidate for the membership in European Union.
Candidate status implies greater access to larger number of
funds for tourism development and it certainly positively
affects the image of this country. Conditions to travel have
been substantially improved in the last two years, for both the
receptive and initiative tourism. In year 2009, visas for Serbian
nationals have been revoked for traveling in the countries that
are in the Schengen Area. Since 2010 citizens of EU can enter
Serbia with only an ID card as it is the case with other
countries that are members of the EU. In the city of Novi Sad
there is a possibility for brownfield investments, first of all
with buying out military objects and turning the same into
cultural centers or accommodation objects. Chances for the
long term sustainable development of tourism are in: creating
public-private partnerships in marketing and promotion,
investing in infrastructural capacities, education and expert
advanced training of touristic staff, safety, preservation of
living surrounding and cultural heritage and other investments
of joint interests. University of Novi Sad has to be included in
the industry (so called transformation towards Entrepreneur
University). The quickest way to accomplish this is through
market oriented research and collaboration between research
centers and tourism industry. Biggest threat for business in
Serbia, not only in tourism sector, is corruption, which is still
widely distributed. High interest and inflation rates influence
negatively on business, as well as world economical crisis that
has started in 2008. That has affected the extenuation of the
general economical activities, as well as weakening of the
exchange rate of dinar to euro (that kind of situation on the
other hand benefits foreign tourists and exporters). Low credit
rating of the state, unstable political situation and slow process
of joining EU sends negative signals to the foreign investors.
Big problem for local businessmen is inadequate tax policy of
the state. Reform of the tax politics is needed, first of all
charging VAT after charging the goods. Finally, incentive
means for tourist agencies and tour operators that positively
influence receptive tourism are necessary. Those means are
present in the surrounding countries (tax payment through
incomes of the receptive tourism, both domestic and foreign).
Final evaluation of the analysis of the external
surrounding (EFAS) of Novi Sad is 2.3 which means that this
destination responds below average to challenges from the

Although this grading cannot be totally objective, since

different people have different attitudes, nevertheless these
grades are representative enough to illustrate relative
importance of certain factors.

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surrounding when compared with other destinations (see Table

1 in the Appendix).
From Table 2 (in appendix), we can see the Internal
Factor Analysis Summary (EFAS) of City Tourism in Novi
Sad. Novi Sad is, because of cultural heritage, called also
Serbian Athens and it strives to become European city of
culture. Besides rich cultural heritage in the city itself, there
are equally important objects in the near vicinity of the city,
first of all, monasteries of Fruska Gora and town Sremski
Karlovci. It is very important to repair the outlook of these
objects, since certain parts are very badly neglected. Also, it is
important to clearly define which organization has jurisdiction
for the management of these objects. As we can clearly see in
the analysis of the seasonality of the numbers of arrivals and
overnight stays of tourists in Novi Sad, largest number arrives
during certain, popular manifestations, such as Novi Sad Fair
(Agricultural fair) and music festival EXIT. The most
significant natural resources in Novi Sad and surrounding are
river Danube and National Park Fruska Gora, but potentials
are not fully used in tourism development. Labor power in
tourism sector has substantial education, above all, thanks to
the tourism studies at the Department of Geography, Tourism
and Hotel Management. Material base of tourism has been
significantly improved in the last decade, primarily thanks to
the opening of large number of new accommodation objects.
There is tourist organization in Novi Sad, but unfortunately it
is not organized and run according to the principles of the
organization for management and marketing of the
destination. Until that organization happens, it is necessary to
elect the director of the tourist organization by means of
competition. Multiethnicity of Novi Sad also contributes to its
tourist attractiveness.
City of Novi Sad does not have a recognizable image.
Tourist offer of Novi Sad is diversified, unclear, inconsistent,
uncoordinated with the needs and contemporary trends and
especially contemporary standards. Ecological conscious of
the local community is also not developed enough, so garbage
represents a major issue (beside roads, on bicycle and
mountain paths, beside the port and marina on the beaches, in
the Danube, on parking lots where tour buses are parked, etc.).
Prevention and sanctioning action is needed. Prevention, that
would mean charging for the plastic bags in the stores, paying
for the return of the plastic packaging, cans, etc. (these actions
have given positive results in Germany). Also, it is necessary
to introduce fines for throwing away garbage outside the bins,
containers and provided landfills. Entrepreneurs, micro, small
and middle enterprises dont have enough support from the
state in starting their own business. There is a great need for
introduction of incentive means (planned according to the
strategy and action plan for tourism), for the receptive tourism
as well. For the needs of tourism industry, education system
should be revised and outdated and unnecessary courses
should be excluded. Education system should be made more
flexible and in accordance with the needs of the market and
more practical activities should be available for students. Novi
Sad, although it has favorable geographical position, does not

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use it enough, primarily because of outdated and inadequate

traffic infrastructure.
Final evaluation of the analysis of the internal
surrounding (IFAS) of Novi Sad is 2.81 which means that this
destination does not use its advantages sufficiently and
weaknesses are overcome below average when compared with
other destinations (see Table 2 in the Appendix).
From Table 3 (see the Appendix), we can conclude
that the greatest strength for developing tourism in Novi Sad
lies in cultural heritage, manifestations and natural resources,
and biggest chance is in geographical position on the Danube
and corridor 10. Insufficient is the support to micro, small and
middle enterprises that want to start their own business,
ecological consciousness is low and above all, no recognizable
image of Novi Sad, represent the greatest weaknesses. High
level of corruption, high inflation rate, high interest rates and
world economic crisis represent largest threats for tourism in
Novi Sad.
Compared analysis of internal and external
surrounding of Novi Sad resulted with the grade 2.45, which
means that Novi Sad as tourist destination is below average in
comparison to other destinations (see Table 3 in the Appendix).
For the development of the adequate tourism strategy, data
should be transferred into TOWS matrix [9].

IV.

CONCLUSION

This paper showed that SFAS as a situation analysis

tool can also be used in tourism industry, through the case
study of city tourism in Novi Sad, Serbia. It successfully
overcomes the criticism of SWOT analysis and provides
essential information of the industry environment necessary
for generation of alternative strategies. The results of this
study highlighted 11 most important factors for city tourism
development. The total weighted score of SFAS analysis is
2,45 which is below the industry average. The total weighted
score in IFAS and EFAS Tables were also below the industry
average of 3,00. The second step of research should include
generation of alternative strategies. A strategic fit of future
tourism development strategy of Novi Sad should be based on
WT Strategies, meaning that generated strategies should be the
ones that minimize weaknesses and avoid threats. These
should include other strategic management tools applied in the
field of tourism. The methodology used in this paper is
recommended in the future situation analysis of tourism in
other markets.

ACKNOWLEDGMENT
The paper is supported by Ministry of Education and
Science, Republic of Serbia (grant: 176020). The research that
is presented here is a part of the doctoral dissertation of
Nemanja Davidovic at the University of Novi Sad.

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REFERENCES
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[2]
[3]
[4]
[5]

P.F.Drucker, Management Challenges for the 21st Century. New York:

Harpercollins Publishers Inc. 1999
M. E. Porter, What is Strategy?. Harvard Business Review, 1996, pp.
61- 78
F.R. David, Strategic Management- Concepts and Cases. New Jersey:
Prentice Hall, 2011
R.M. Grant & J. Jordan, J., Foundations of Strategy. Chichester: John
Wiley & Sons Ltd., 2012
L. Moutinho, Strategic Management in Tourism. Oxon: CABI
Publishing, 2000

[7]
[8]
[9]

S.P. Robbins & M. Coulter, Management. New Jersey: Prentice Hall,

2012
C.W. Stern & M.S. Deimler, The Boston Consulting Group on Strategy.
New Jersey: The Boston Consulting Group. 2006
J.D. Hunger & T.L. Wheelen, Essentials of Strategic Management. New
Jersey: Prentice Hall. 2011
N.Davidovic, The Learning Area Principles as a Framework for the
Development of Tourism Development Strategy of Novi Sad, Doctoral
thesis,
unpublished

APPENDIX

TABLE I.

EXTERNAL FACTOR ANALYSIS SUMMARY (EFAS) OF CITY TOURISM IN NOVI SAD

Weight

Rating

Weighted
score

Comment

Geographical location

0,15

0,6

Corridors 7 and 10, close to Airport Nikola Tesla

EU candidate country status

0,05

0,2

New funds for tourism development available, better image of Serbia and Novi Sad

0,03

0,09

Market orientated research and cooperation of R&D centers and tourism business

0,03

0,09

Transformation of military real-estate

Public-private partnerships

0,03

0,09

Foundation of efficient long-lasting models of PPP to increase the competitive advantage

of Novi Sad tourism offer

Nature reservation
Koviljsko- petrovaradinski
rit

0,01

0,03

Potential for ecotourism development

Visa regime

0,05

0,25

Abolishment of visa regime in Schengen area for citizens of Serbia and travel of EU
citizens to Serbia with a valid id (passport no longer required)

World economic crisis

0,1

0,1

Decrease of all economic activities, low Serbian Dinar exchange ratio

External Factors
CHANCES

Cooperation of academia
and private sector
Possibilities for Brownfield
investments

THREATS

High interest rates

0,1

0,1

High interest rates discourage credit financing

High inflation rate

0,1

0,2

High inflation rate (higher than 10%) creates unfavorable business climate

Unstable political situation

0,05

0,1

Relations to EU and open issues with Kosovo*

High corruption rate

0,15

0,15

Corruption is wide spread and has a high rate

Low credit rating of Serbia

0,05

0,1

Credit rating of Serbia is BB-

Slow EU accession process

0,05

0,1

The reform process in Serbia is slow

Inadequate tax policy

0,05

0,1

VAT should be collected at the payment date

TOTALS

TABLE II.
Internal Factors

2,3

INTERNAL FACTOR ANALYSIS SUMMARY (IFAS) OF CITY TOURISM IN NOVI SAD

Weight

Rating

Weighted
Score

Comment

STRENGTHS
Cultural heritage

0,1

0,4

Petrovaradin fortress, cultural and

historical spatial areas, medieval
monasteries on Fruska gora

Natural resources

0,07

0,28

Danube, NP Fruka gora...

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Events

0,1

0,5

EXIT, Novi Sad Fair...

Tourism courses at University of Novi Sad

Educated work force

0,05

0,25

Developed tertiary sector

0,01

0,04

Material base of tourism

0,05

0,2

Increase in number of beds and

accommodation facilities in the past 10
years

Existing DMO

0,05

0,15

Tourism organization of Novi Sad

Multiculturalism

0,02

0,1

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WEAKNESSES
Geographical location is not fully utilized

0,05

0,1

Corridor 10, railroad and corridor 7 are not

fully utilized
Increase in population is due to migration

Aging population

0,01

0,04

City economy lacks compatibility with resources available

0,01

0,02

Lack of spatial planning and irrational usage of space

0,01

0,01

Construction sites and buildings without

permit

Lack of infrastructure adapted locations ready for investors, lack of

subsidies for investors on city level

0,05

0,1

No funds for promotion of investments

Lack of start-up loans for incoming tourism

Lack of support for SMEs and new entrants in tourism

0,1

0,2

Lack of integrated cultural centre and lack of organization for cultural

heritage management

0,02

0,02

Low environmental awareness

0,1

0,1

Gap between education courses and market needs

0,05

0,15

Undefined image of Novi Sad as a tourism destination

0,15

0,15

TOTALS

TABLE III.
Internal Factors

Type

Rubbish and litter problems

Education courses should contain more
internships and be market orientated
Tourism offer of Novi Sad is highly
diversified, unclear, inconsistent, and
inadequate to its demand, contemporary
tourism trends and standards

2,81

STRATEGIC FACTOR ANALYSIS SUMMARY (SFAS) OF CITY TOURISM IN NOVI SAD

Weight

Rating

Weighted
Score

Comment

Cultural heritage

Strength

0,15

0,6

Petrovaradin fortress, cultural and historical spatial areas, medieval

monasteries on Fruska gora

Natural resources

Strength

0,05

0,2

Danube, NP Fruka gora...

Events

Strength

0,1

0,5

EXIT, Novi Sad Fair...

Lack of support for SMEs and

new entrants in tourism

Weakness

0,1

0,2

Lack of start-up loans for incoming tourism

Low environmental awareness

Weakness

0,1

0,1

Rubbish and litter problems

Undefined image of Novi Sad

as a tourism destination

Weakness

0,15

0,15

Tourism offer of Novi Sad is highly diversified, unclear,

inconsistent, and inadequate to its demand, contemporary tourism
trends and standards

External Factors

Type

Weight

Rating

Weighted
Score

Comment

Geographical location

Opportunity

0,1

0,4

Corridors 7 and 10, close to Airport Nikola Tesla

Decrease of all economic activities, low Serbian Dinar exchange
ratio

World economic crisis

Threat

0,03

0,03

High interest rates

Threat

0,05

0,05

High interest rates discourage loan financing

High inflation rate

Threat

0,05

0,1

High inflation rate (higher than 10%) creates unfavorable business

climate

High corruption rate

Threat

0,12

0,12

Corruption is wide spread and has a high rate

TOTALS

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2,45

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