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Shovella Santy A 9116201505

Maramis Setiawan 9116201506

Rakhma Febriani 9116201510
Shabrina Dyah Mutiara - 9116201517

Strategy Formulation
Railway Transportation in QODS NIROO
Overview Iran Transportation
QODS NIROO at Glance
Journal Review
Railway Transport
Discussion & Summary
Iran Transportation
The country had 173,000 kilometres (107,000 mi) of
roads, of which 73% were paved.
All large cities have mass transit systems using buses,
and several private companies provide bus service
between cities. Tehran, Mashhad, Shiraz, Tabriz, Ahwaz
and Esfahan have underground mass transit rail lines, in
different stages of operation and construction.
The countrys major port of entry is Bandar-Abbas on the
Strait of Hormuz.
Trains operate on 11,106 km (6,942 mi) of railroad track.
Plan to increase total railways length from 13,500 km in
2016 to 20,000 km by 2025.
The majority of transportation in Iran is road-based. The
government plans to transport 3.5% of the passenger
volume and 8.5% of the freight volume by rail. Extensive
electrification is planned. The railway network expands
by about 500 km per year according to the Ministry of
QODS NIROO at Glance
One of the largest engineering
company in Iran which works in
After 30 years of work, GNEC
different fields such as energy,
proved to be the most successful
water, oil, gas and related
and recognized company in the
industries. Semi-governmental
field of power generation,
company which most of its share
transmission and distribution.
belongs to government. Staff
resources over than 1000

The company has already

supervised the completion of
In the same period, we designed,
23000 MW of power plants with
constructed and commissioned
another 5000 MW under
over a 270 substations, from 63 to
supervision. The diversity is from
400 KV, and over 25,000 Km of
hundreds to thousands of mega
high voltage transmission lines.
watts and covers steam plants,
combined cycle and gas turbine.

Commitment to quality has made a

recognized leader providing the
knowledge and skill base that is
GNEC of experience.
Strategy Formulation Steps

Aiming the
Setting Evaluating the Setting
Context With Performance Choice of
Organizations Organizational Quantitative
The Divisional Analysis Strategy
Objective Environment Targets
Internal Factor Evaluation (IFE)
Rating is applied to each factor. IFE (Internal factor evaluation) matrix is one of the best strategic
Major weakness by 1.0
tool to perform internal audit of different functional areas of
Minor weakness by 2.0
Minor strength by 3.0 business such as finance, marketing,IT, operations, accounts,
Major Strength by 4.0 Human Resources and others depend upon the nature of business
and its size.
Following are the important components of IFE Matrix:
1. Strength
2. Weakness
Rating in IFE rating is the way out to differentiate internal
strengths and weakness.
Weight attribute in IFE matrix indicates the relative importance of
factor to being successful in the firms industry. The weight range
from 0.0 means not important and 1.0 means important.
Weighted score value is the result achieved after multiplying each
factor rating with the weight.
Total Weighted Score is equal to the total weighted score, final
value of total weighted score should be between range 1.0 (low) to
4.0(high). The average weighted score for IFE matrix is 2.5 any
company total weighted score fall below 2.5 consider as weak.
Internal Factor Evaluation (IFE)

The steps to develop IFE Matrix:

Assign a I to 4
Assign a Sum the
rating to each Multiply each
weight that weighted
List key factor to factors weight
ranges from scores for each
internal factors indicate by its rating to
0.0 (not variable to
as identified in whether that determine a
important) to determine the
the internal factor weighted score
1.0 (all total weighted
audit process represents a for each
important) to score for the
major variable.
each factor. organization.
External Factor Evaluation (EFE)
Rating is applied to each factor. The EFE matrix is the strategic tool to evaluate external
The response is poor
represented by 1.0 environment or macro environment of the firm include
The response is average economic, social, technological, government, political, legal
represented by 2.0 and competitive information.
The response is above average
represented by 3.0 Following are the important components of IFE Matrix:
The response is superior
represented by 4.0 1. Opportunities
2. Threats
Rating in EFE matrix represent the response of firm toward
the opportunities and threats.
The weight range from 0.0 means not important and 1.0
means important.
Weighted score value is the result achieved after multiplying
each factor rating with the weight.
Total Weighted Score is the sum of all weighted score is equal
to the total weighted score, final value of total weighted score
should be between range 1.0 (low) to 4.0(high). The average
weighted score for EFE matrix is 2.5 any company total
weighted score fall below 2.5 consider as weak.
External Factor Evaluation (EFE)

The steps to develop EFE Matrix:

Assign a 1-4
rating to each
critical success
Assign a weight factor to indicate
Multiply each
Identify a list of to each factor, how effectively
factors weight
KEY external ranging from 0 the firms current Sum the
by its rating to
factors (critical (not important) to strategies weighted scores.
determine a
success factors). 1.0 (very respond to the
weighted score.
important). factor. (1 =
response is poor,
4 = response is
extremely good)
Competitive Profiling Matrix (CPM)

An essential strategic management tool to compare

the firm with the major players of the industry.
Show the clear picture to the firm about their strong
points and weak points relative to their competitor
Definision & purpose The CPM score is measured on basis of critical
success factors, each factor is measured in same
scale mean the weight remain same for every firm
only rating varies

Rating in CPM represent the response of firm toward

the critical success factors. Highest the rating better
Rating the response of the firm towards the critical success
factor ,rating range from 1.0 to 4.0 and can be
applied to any factor.

Weight attribute in CPM indicates the relative

importance of factor to being successful in the firms
industry. The weight range from 0.0 means not
important and 1.0 means important.
Weight Weighted score value is the result achieved after
multiplying each factor rating with the weight.
The sum of all weighted score is equal to the total
weighted score, final value of total weighted score
should be between range 1.0 (low) to 4.0(high).
Internal External IE Matrix

Devinition & purpose The IE matrix is based on the following

IE Matrix is the strategic management tool which is two criteria:
used to analyze the current position of the divisions Score from the EFE matrix -- this score is plotted
and suggest the strategies for the future for the on the y-axis
better Score from the IFE matrix -- plotted on the x-axis
The IE matrix used to plot the organization
divisions in nine cell diagram, each cell have some
meaning associated which suggest strategies.

The IE matrix can be divided into three

major regions that have different
strategy implications:
Cells I, II, and III suggest thegrow and build
Cells IV, V, and VI suggest the hold and maintain
strategy. In this case, your tactical strategies
should focus on market penetration and product
Cells VII, VIII, and IX are characterized with
the harvest or exit strategy.
Boston Consulting Group Matrix

The Stars is the scenario where there is the optimum situation of high
growth and high share, this method requires an increased investment
due to the continuous growth.

The Cash Cow cycle deals with low growth and high share. This
scenario requires a low investment, but the growth is very slow.

The Dogs method is the situation where the growth is low and the
market share is low, this is one of the worst situations. In this situation if
the products are not delivering the cash then it is best to liquidate.

The Question mark which is high market growth but low shares. In this
situation there is a high demand but low returns. It is best to try and
increase market share or get it to deliver cash.
Davids Model
J. David Hunger books According to the Davids concept (2003),
management strategic process has three
stages, namely:

Maramis formulating, implementing and

evaluating strategies

its strategic formulation framework

comprising of: mission and vision
formulation, opportunity and
challenge identification, companys
superiority and weakness, and long
term target determination.

Strategic formulating techniques and its

decision taking processes are divided into
three stages (David 2003:198), integrally
made into one systematic strategic
formulating framework.

Strategic formulation method applied in

Davids model comprised of Nine types of
matrixes, namely three matrixes at input
stage, five matrixes at matching stage,
and one matrix at decision stage.
Grand Strategy Matrix
Q1 : Firms have strong strategic
position. These firms focus on their
established competitive advantage (CA)
and take advantage of it as long as it
allows them.

Q2 : Firms have rapid growing industry

but can not fight competently. They must
evaluate their existing approach in the
market place, need to know why they
are ineffective in the market and must
come up with a strategy to improve their
strategic position

Q3 : All those firms which fall in this

quadrant have slow growth market and
have relatively weak position. Firms
have to make noticeable modifications
to sustain their position.

Q4 : Companies competing in this

quadrant have slow growth industry but
have a strong competitive postition.
These firms can diversify into different
untapped businesse by utilizing their
exiting resource.
Qualitative Strategic Planning Matrix
The Quantitative Strategic Planning Matrix is
a strategic tool which is used to evaluate
alternative set of strategies. The QSPM
incorporate earlier stage details in an
organize way to calculate the score of
multiple strategies in order to find the best
match strategy for the organization.
Step 1 : Make a list of the firms key external
opportunities/threats and internal
strengths/weaknesses in the left column of the
Step 2 : Assign weights to each key external and
internal factor. These weights are identical to those
in the EFE Matrix and the IFE Matrix.
Step 3 : Examine the Stage 2 (matching) matrices
and identify alternative strategies that the
organization should consider implementing. Record
these strategies in the top row of the QSPM.
Step 4: Determine the Attractiveness Scores (AS),
defined as numerical values that indicate the relative
attractiveness of each strategy in a given set of
Step 5 : Compute the Total Attractiveness Scores.
Total Attractiveness Scores are defined as the
product of multiplying the weights (Step 2) by the
Attractiveness Scores (Step 4) in each row.
Step 6 : Compute the Sum Total Attractiveness
Score. Add Total Attractiveness Scores in each
strategy column of the QSPM
Strategy Formulating for
Semi-Governmental Companies,
Case Study : Railway Transportation
Strategic planning QODS NIROO to start up
the railway transportation business
Their 3 majors step based on Davids
method :
1. Study internal & external environment
of the business and prepare IFE, EFE
and CPM matrixes
2. Suggest potential companys strategies
by SWOT analysis and other
techniques such as Space & BCG
3. Evaluating the best strategy which
satisfy the governmental aim and has
acceptable of profitability for the private
share by using QSPM method
Investigation Model & Methodology
Davids model is one of most popular
models in strategy formulation
Davids model can be used in kinds of
organization and companies
It was selected to choose strategic
planning for semi-governmental
In Iran, there are lot organizations that
are semi-governmental. The president
is selected by government, and other
personals are selected by private
Davids Model
Strategy Assessment &
Formulation Select Strategy


Mission : Railway sector of QODS NIROO providing engineering consulting

and contracting to employers and contractors in the railway industry, tries to
serve in the countrys development. Has high reputation, experience and
technical knowledge in the field of energy, petrochemicals,
telecommunications, construction, airport, building and manufacturing.
Produce services in railway industry in Iran and Middle East
Internal Factors : Management, Marketing, Financial, Produce, R&D,
services, computer systems and so on.
External Factors : Economical, Social, Cultural and Political Events. Also
Strategy Formulation :
The Methodology Steps

Matrix Matrix Matrix Matrix Matrix Matrix Matrix Matrix

Formulating strategy by Davids model

has 3 steps.
Each item of each step is covered by
these steps
> 2.5
Manager of
almost know
strengths in
EFE Matrix


Manager of QODS NIROO almost are
aware external threats and opportunities
outside of their organization
CPM Matrix
Show a companys major competitors and their weakness and strength.
Kavosh Rah is stronger than others
SWOT Matrix
Based on
matrix and
brain storm
meeting at
are accepted
to plan for
SPACE Matrix
Strategic Position and Action Evaluation
(SPACE) Matrix is based on two internal and
two external dimensions
QODS NIROO should select aggressive
BCG Matrix
Boston Consulting Group (BCG) Matrix has
four parts : Question marks, stars, cash cows
and dogs
QODS NIROO has invested in many fields
Railway sector in QODS NIROO is Question
IE Matrix
Internal-External Matrix has nine cells that show
position of an organization
Part I, II and IV are grow and build so QODS NIROO
should select proper strategies for these situation
Part III, V and VII are hold and maintain
Part VI, VIII and IX are harvest or divest
According to obtain score in IFE and EFE matrices,
QODS NIROO in railway sector :

QODS NIROO should strategies hold and maintain

Grand Strategy Matrix
Grand strategy matrix is based on
competitive position and market growth
Railway sector in QODS NIROO should start
to Market development, Market penetration,
and product development and so on.
QSPM Matrix (1)
3rd step of formulating Davids model is QSPM matrix
This techniques allow managers to assess alternative
strategies objectively based on a companys internal strengths
/ weaknesses and external opportunities / threats
In following matrix between two main strategies To enter
urban railway and To enter suburban railway, better strategy
will be selected
QSPM Matrix (2)
Asias Railway Transportation Strategy
CAREC (Central Asia Regional Economic
Cooperation) countries include
Afghanistan, Azerbaijan, the Peoples
Republic of China (PRC), Georgia,
Kazakhstan, the Kyrgyz Republic,
Mongolia, Pakistan,Tajikistan,
Turkmenistan, and Uzbekistan.

The CAREC strategic vision for rail

transport is that rail transport will be a
mode of choice for trade: quick, efficient,
accessible for customers, and easy to
use throughout the region by 2030. The
principal approaches to achieve this
vision include : (i) improving rail and
ultimodal infrastructure; and
(ii) commercializing and reforming
railway activities.

For the multimodal services, it is

important to coordinate at the planning
stage with other transport sectors such
as road. When infrastructure
investments and reform and
commercialization components are
combined as a policy package, the
synergies result in rail services that are
more attractive and desirable and rail
transport shares will increase.
Global Railway Transportation Strategy
Vision for Railway Development wants to provide a system-
oriented reference to seek appropriate solutions for future
challenges, using an approach which has originally been
developed for road transport, the forever open concept.
The forever open concept comprises
the following central elements:
Adaptability: focusing on ways to Enhanced Automation: focusing Resilience: focus on
allow operators to respond in a on the full integration of intelligent ensuring service levels
flexible manner to changes in users communication technology (ICT) are maintained even
demands and constraints. and applications between the user, under extreme
the vehicle, traffic management operating conditions.
services and operation.

Vission Approach

To provide a system- Forever Open Adaptability, Enhance

oriented reference to Concept Automation, Resilience
seek appropriate
solutions for future Safety, Security,
Fundamental Values Sustainability
Integrated System Rolling Stock, Infrastructure,
View Main Asset ICT, HR
the principle tools used to make Training, Standardisation,
railways fit for the future R&D, Innovation, Asset
Strategy Formulating for
Semi-Governmental Companies,
Case Study : Railway Transportation
Formulated strategies for railway
sector QODS NIROO :
Based on QSPM matrix, better to enter urban
railway than suburban railway
Goal should be achieved :
Enter railway industry
Focused on urban railway
Exploit environmental opportunities &
facing with threats in order to gain a
competitive advantage
Allocate resources and do activities
Managers aware of environmental

Formulate strategy to enter Strategy to develop railway Delivering more

the railway transportation transportation fundamental value
Still strugling in operations
To decide whether urban or & infrastructure
suburban railway segment

Fundamental Values
Safety Security Sustainability

Rail is the safest mode of Rail is generally a secure mode of 1. limiting adverse
land transport and any land transport, but it sometimes effects on the
railway strategy should be generates a feeling of insecurity Environment
aiming at maintaining that which in some cases prevents
position. Rail will actively people to use it. 2. Fostering Affordability
move towards being the Research in the area of railway and Intermodal
safest mode of all transport security should concentrate on two Competitiveness
sectors and thereby be main challenges:
even more attractive to the 1. Providing maximum security
customer. with a minimum of adverse
effects on the free flow of
traffic. surveillance (CCTV)
2. Making the railway system
more resilient to criminal attack