The Future

Strategic Management
Module 4
Dr . Amr Sukkar PhD, M Phil, MBA
Strategy Formulation
 Agenda

01 Differentiate SWOT Vs
TWOS 02 Understand the
Generating a Strategic
Factors Analysis

03 Identify Competitive
strategy and Cooperative
04 Review of Mission and
Objectives
strategy
Prentice Hall, Inc. ©2009
Prentice Hall, Inc. ©2009
What’s Strategy
formulation ?

What’s Situation
Analysis ?
Strategy formulation- concerns
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 Vs TWOS
 SWOT

S W
Strategies

O T
SWOT- Strengths-Weaknesses-Opportunities-
Threats

Strategy= opportunity/capacity
Opportunity has no real value unless a company has
the capacity to take advantage of that opportunity
Strategic sweet spot- a company is able to satisfy
customers’ needs in a way that rivals cannot

Prentice Hall, Inc. ©2009

Criticisms of SWOT analysis
• Generates lengthy lists
• Uses no weights to reflect priorities
• Uses ambiguous words and phrases
• Same factor can be in 2 categories
• No obligation to verify opinion with data or
analysis
• Requires only a single level of analysis
• No logical link to strategy implementation
 Generating a Strategic Factors Analysis
Summary (SFAS) Matrix
SFAS summarizes an organization’s strategic
factors by combining the external factors from
the EFAS Table with the internal factors from the
IFAS Table
TOWS Matrix- illustrates how the external opportunities and
threats can be matched with internal strengths and
weaknesses to result in 4 possible strategic alternatives

• Provides a means to brainstorm alternative strategies

• Forces managers to create various kinds of growth and
retrenchment strategies
• Used to generate corporate as well as business
strategies
Corporate strategy – an organizational
strategy that determines what businesses a
company is in or wants to be in, and what
it wants to do with those businesses.
Stability Strategy a corporate strategy in
which an organization continues to do what it
is currently doing.

Renewal strategy – a corporate strategy

designed to address declining
performance.

.
Business strategy focuses on improving
the competitive position of a company’s
or business unit’s products or services
within the specific industry or market
segment it serves
 Business strategy is comprised of:

• Competitive strategy

• Cooperative strategy
Competitive strategy
 Porter’s competitive strategies

Lower cost strategy- the ability of a company or a

business unit to design, produce and market a
comparable product more efficiently than its
competitors

Differentiation strategy- the ability of a company

or a business unit to provide a unique or
superior value to the buyer in terms of product
quality, special features, or after sale service
 Porter’s competitive strategies
Cost leadership- a lower-cost competitive strategy that
aims at the broad mass market and requires efficient
scale facilities, cost reductions, cost and overhead
control; avoids marginal customers, cost minimization
in R&D, service, sales force and advertising

• Provides a defense against competitors

• Provides a barrier to entry
• Generates increased market share
 Porter’s competitive strategies
Differentiation- involves the creation of a product or
service that is perceived throughout the industry as
unique. Can be associated with design, brand image,
technology, features, dealer network, or customer
service

• Lowers customers sensitivity to price

• Increases buyer loyalty
• Barrier to entry
• Can generate higher profits
 Porter’s competitive strategies
Cost Focus- low-cost competitive strategy that focuses on a
particular buyer group or geographic market and attempts
to serve only this niche to the exclusion of others

Differentiation Focus- concentrates on a particular buyer

group, product line segment, or geographic market to
serve the needs of a narrow strategic market more
effectively than its competitors
Risks in Competitive Strategies
Cooperative strategy
Cooperative Strategies- used to
gain a competitive advantage
within an industry by working with
other firms
Strategic Alliances- a long-term cooperative
arrangement between two or more
independent firms or business units that
engage in business activities for mutual
economic gain
Used to:
• Obtain or learn new capabilities
• Obtain access to specific markets
• Reduce financial risk
• Reduce political risk
 Types of Cooperative
Agreements

• Mutual Service Consortia

• Joint Venture
• Licensing Arrangements
• Value-Chain Partnerships
Mission/Vision/Objectives
 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
Mission: Why do we exist.

Vision: What we aspire to be in the future.

Values: What we stand for.

Mission- the purpose or reason for the organization’s
existence

Vision- describes what the organization would like to

become

Objectives- the end results of planned activity

Values- Guides selection and evaluation of behavior,

people, and events
 Examples of a core
purpose or why we exist

"To provide society with superior products and

services by developing innovations and solutions
that improve the quality of life and satisfy
customer needs, and to provide employees with
meaningful work and advancement
opportunities, and investors with a superior rate
of return" Merck
"To organize the world's information and make it
universally accessible and useful" Google
•Mary Kay Cosmetics: To give unlimited opportunity
to women

•Walt Disney: To make people happy

•Wal-Mart: To give ordinary folk the chance to buy

the same things as rich people

•Nike: To experience the emotion of competition,

winning, and crushing competitors
Vision- describes what the organization would
like to become

The vision is a concise statement that defines the

mid- to long-term (three- to ten-year) goals
of an organization.

Vision should be specific, measurable with a

clear accomplishment date. OR should lead to
a hierarchy of SMART Objectives.
"What we aspire to be"
 Examples of a vision or what we aspire
to be:
“We will be among the top three transporters of
goods and people in North America by 2028”

“We will become the respected leader in financial

services with a focus on customer relationships
and satisfaction, producing financial returns in
the top of the industry"
A value is;
- A belief
- Pertaining to desirable end states or modes
of conduct, that transcends specific
situations.
- Guides selection and evaluation of behavior,
people, and events, and
- Is ordered by importance relative to other
values to form a system of value priorities.
Objectives- the end results of
planned activity

Why Objective Setting?

1-3
Properly constructed goals are very powerful
tools;
•Objectives increase focus and concentration because
you know what you’re trying to do.

•Objectives increase motivation/persistence, especially

if you are getting good feedback on your progress.

•Objectives lead to increased energy: when you know

what you’re trying to do, you’re not wasting time and
energy trying to figure it out.
Objective & Goal

1-3
 Objective = A SMART goal is:
Specific Clearly defined; detailed; picturesque
Measurable progress can be measured
Achievable Challenging but possible
Relevant Important for you; your own dream
Time-Bound Has a deadline

Example;
•Decrease the time to respond to customer queries by
3 minutes by the end of this quarter.
•Decrease the time to resolve customer issues from 2
hours to 1.5 hours by July 2022.
Objective Setting Aid Questions

Specific
•What do you want to accomplish?
•Can you describe the output in details?
•What, Why & How?

Measurable
•How will you know how far you’ve come?
•How will you know if something is going wrong?
Objective Setting Aid Questions
Achievable or Actionable
•How big is your goal?
•What resources do you need to accomplish your
goal?
•How will you obtain any skills and knowledge you
need?
•Who will help you accomplish your goal?
•What steps are necessary to accomplish your goal?
Objective Setting Aid Questions

Relevant or Realistic
•Do you care? Are you willing and able to do it?
•Do you believe you can accomplish your goal?
•How much do you want to accomplish your goal?

Time-Bound
•When will you complete your goal?
•If your goal is big, how will you break it into pieces?
 Assignment
Try to analyze with written
Comments and
recommendations to improve
your Firm’s
“Mission, Vision, Values and
Objectives ”
 Video (4)

“Mission, Vision, Values and Objectives”

https://www.youtube.com/watch?v=8w
em6FZAucw
Thank You
 Amr Sukkar PhD, M Phil, MBA

You tube channel: Amr Sukkar

Email Address: amressamsukkar@gmail.com

Facebook pag: Amr Sukkar