Strategy

Formulation:
SWOT Analysis
SWOT Analysis

1. A way to analyze competitive position of

the firm
2. This is a framework that allows managers
to synthesize insights obtain from the
environmental analysis
1. Build up strengths
2. Shore up
Weaknesses
3. Invest in
Opportunities
4. Monitor Threats
Strategy Formulation Framework

Stage II. Matching Stage

SWOT Matrix
Stage 1. Input Stage Space Matrix
External Factor Evaluation (EFE) BCG Matrix
IE Matrix
Internal Factor Evaluation (IFE) Balance Scorecard

Competitive Profile Matrix

Stage III. Decision Stage
Quantitative Strategic Planning
Matrix
Types of Strategies

Integration strategies Diversification strategies

Forward integration Related diversification
Backward integration Unrelated diversification
Horizontal integration
Defensive strategies
Intensive strategies Retrenchment
Market Penetration Divestiture
Market Development Liquidation
Product Development
Types of Strategies
Strategy Definition
Forward Integration Gaining ownership or increased control over
distribution or retailers
Backward Integration Seeking ownership or increased control of a firm’s
suppliers
Horizontal Integration Seeking Ownership or increased control over
competitors
Market Penetration Seeking increased market share for present
products or services in present markets through
greater marketing efforts
Market Development Introducing present products or services into new
geographical area
Product Development Seeking increased sales by improving present
products or services or developing new ones
 Current products New products

Current markets Market Penetration Product Development

New markets Market Development Diversification

Types of Strategies
Strategy Definition
Related Diversification Adding new but related products or services
Unrelated Diversification Adding new, unrelated products or services
Retrenchment Regrouping through cost and asset reduction to
reverse declining sales and profit

Divestiture Selling a division or part of an organization

Liquidation Selling all of a company’s assets, in parts, for their
tangible worth
Competitive Profile Matrix

Identifies a firm’s major competitors and its particular

strength and weaknesses in relation to a sample firm’s
strategic position.
CPM Factors:
1. Breadth of product line 9. E-commerce facilities
(scope) 10. Global expansion
2. Effectiveness of sales 11. Inventory system
distribution
3. Patent Advantage 12. Financial position
4. Location of facilities/business 13. Management
structure 14. Customer loyalty
5. Production capacity 15. Product quality
6. Union relations 16. Price competitiveness
7. Technological Advantage 17. Customer service
8. Market share experience management
Constructing CPM

1. List down critical success factors

2. Choose competitors
3. Assign weight from .0 to 1.0
4. Rate the CSF using the following
4-major strength, 3-minor strength,
2-minor weakness, 1 major weakness
5. Multiply weight with the rate
6. Get the sum of each weight