DR PREM KUMAR NAIR

Strategic Analysis Tools

The material is based on the

Following Books

Marketing Strategy
Walker Boyd Mullins Larreche

Marketing Strategy
O.C.Ferrel and M.D.Hartline

Strategic Brand Management

Kevin Lane Keller

An Integrated Approach to strategic Management

Hills and Jones

SWOT Analysis Framework

Environmental Scan

Internal Analysis External Analysis

Strengths Opportunities
Weaknesses Threats

SWOT Matrix

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SWOT analysis and SWOT matrix

1. A SWOT analysis helps you match your
company’s resources and capabilities to
threats and opportunities in the competitive
environment.
2. SWOT analysis can be very subjective, but
adding weighting and criteria to each factor
increases the validity of the analysis.
3. Also completing the SWOT matrix can help
you pick the best strategy to implement.

SWOT Analysis Identifying

S Things the company does well.

internal

W Things the company does not do well.

O Conditions in the external environment that

External

favor strengths.

Conditions in the external environment that

T do not relate to existing strengths or favor
areasCollege
©South-Western of current
Publishing weakness.

SWOT Analysis

Opportunities Threats
1. 1.
External 2. 2.
Environment 3. 3.

Strengths Weaknesses
1. 1.
Internal 2. 2.
Environment 3. 3.

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TOWS Matrix
List Internal Strengths List Internal Weaknesses
(competitive advantages) (competitive disadvantages
1. 1.
2. 2.
3. 3.
4. 4.
List External Opportunities 4 2
1. Future Quadrant Internal Fix-it Quadrant
2.
•Related diversification •Retrenchment
3.
•Vertical integration •Enhancement
4. •Market development •Market development
•Product development •Product development
•Penetration •Vertical integration
•Related diversification
List External Threats 3 1
1. External Fix-it Quadrant Survival Quadrant
2.
3. •Related diversification •Unrelated diversification
4. •Unrelated diversification •Divestiture
•Market development •Liquidation
•Product development •Harvesting
•Enhancement •Retrenchment
•Status quo

Establishing a Strategic Focus

Aggressive
many internal strengths / many external opportunities
Diversification
many internal strengths / many external threats
Turnaround
many internal weaknesses / many external
opportunities
Defensive
many internal weaknesses / many external
threats

Examples of each strategy type

Strength-Opportunity Strategies Strength-Threat Strategies

Expand globally Diversify
Increase sales staff Acquire competitor
Increase advertising Liquidate
Develop new products Expand locally
Diversify Re-engineer
Weakness-Opportunity Strategies Weakness-Threat Strategies
Joint venture Divest
Acquire competitor Increase promotion
Expand nationally Retrench
Backward integration Restructure
Forward integration Downsize

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R&D Introduction Growth Maturity Decline

Sales Low Increasing Peaking Declining

Costs High R&D High Average Low Low

Profits Negative Negative Rising High Declining

Customers Innovators Early adopters Middle majority Laggards

Competitors Few Growing Stable number Declining

Marketing Product Maximize Market share Reduce costs

Objectives trial market share and profit milk brand

Product In development Basic Extensions Diversify brand Phase out weak

Price tbd Skimming or Penetrate Be price Cut

penetration market competitive price

Distribution tbd Selective Intensive Increase Reduce outlets

Advertising tbd Educate Awareness Brand Reduce

awareness interest differences and remind

Promotion tbd Heavy to Reduce Increase for Reduce costs

encourage trial heavy consumer brand switching minimum level

Common Strategic Advantages

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Product Life Cycle

(sales and profit)
Volume

Introduction Takeoff Maturation Obsolescence

Stages
Check p. 273

Product Life Cycle/Strategic choices

Market development
(sales and profit)

Product development
Volume

Penetration
Market development Enhancement
Market Product development Status quo
development Penetration Divestiture
Retrenchment
Product Vertical integration Liquidation
development Divestiture
Related diversification Harvesting
Unrelated
diversification Unrelated
diversification

Introduction Takeoff Maturation Obsolescence

Stages
Check p. 273

Innovativeness and adopter categories

Respond best to
mass media and
logical messaging

Rely on combination of objective and subjective messaging and

interpersonal communication channels for persuasion

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The BCG Matrix

High

Question
Market growth rate

Stars
marks

Cash cows Dogs

Low
High Relative market share Low

Source: Perspectives, No. 66, “The Product Portfolio,” Adapted by permission from The Boston Consulting Group, Inc., 1970.

BCG Matrix

Stars Problem Child

?
Market growth rate

$
Cash Cows Dogs

Relative market share

BCG matrix

Stars Problem Child

Market growth rate

$
Cash Cows Dogs

Relative market share

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BCG Matrix

Stars Problem Child

Market growth rate

Revenue ++++ Revenue +

Expenses _ _ _ Expenses _ _ _ _
Net + Net ___

Revenue + + + + + Revenue + +
Expenses _ Expenses _ _ _ _
Net ++++ Net ___

Cash Cows Dogs

Relative market share

THE END

Thank You