SOSTAC

SOSTAC stands for:

• Situation – where are we now?

• Objectives – where do we want to be?
• Strategy – how do we get there?
• Tactics – how exactly do we get there?
• Action – what is our plan?
• Control – did we get there?
Situation Analysis

• This involves looking at where the company is at the current time. There
are two perspectives:
• Micro- mainly looks at internal factors
• Macro- looks at the “big picture” and the impact of external factors (the
focus of the final assignment)
Situation Analysis- Micro
Environment

Potential information sources include:

• Company annual report.
• Regulatory statements- these can usually be found in the Investor
section of the company website or on the stock market where they are
listed.
• Analyst reports.
• Newspapers and trade magazines.
• Customer and staff reviews.
• Consider the above for close competitors to assess how any one
company compares.
Situation Analysis-Micro
Environment

Tools that can be used to analyse the micro environment include:

• SWOT
• Kaplan and Norton Balanced Scorecard
• 4 Vs analysis
Situation Analysis- Micro
Environment

SWOT
Internal Strengths (S) Weaknesses (W)
What is this company What area/s is the
good at? company doing less well in?

External Opportunities (O) Threats (T)

What opportunities are What threats is the company
available to the company under. Normally based on
based on it’s strengths or weaknesses or industry
external forces. developments.
 Situation Analysis -Micro
Environment
Kaplan and Norton- The Balanced Scorecard
This performance management covers four operational areas. How is the
company performing in these areas?
Situation Analysis- Micro
Environment Four Vs

This tool is a good way of comparing a company with competitors, to identify

opportunities and threats. Source: Slack and Lewis (2017)
Situation Analysis- Macro
Environment

Sources of information on the macro environment include:

• Government statistics (i.e. ONS/ YouGov).
• Industry statistics (i.e. Association of British Travel Agents, British
Medical Association).
• Business/ industry press.
• Census data.
• Economist Intelligence country reports.
Situation Analysis- Macro
Environment

PESTLE- a tool that supports analysis of the macro environment

Aspects to consider
Political How stable is the country and how are companies in the industry
positioning themselves?
Economic The impact of interest and business rates, currency fluctuation, and
consumer disposable income, on the industry. How available is credit
for consumers and business?
Social How large/ accessible is the company’s target audience? What are the
industry related habits/ trends, of consumers, nationally?
Technological What technology is becoming available in the industry and the impact
on costs and efficiencies.
What technology is available to customers, suppliers and companies?
Legal What are the legal frameworks that affect the industry? Consider this
in business terms and consumer rights.
Environmental What environmental trends affect the industry supply chain? What
types of CSR/ Green initiatives are in place?
 Porter’s Five Forces
A tool that can aid assessment of the macro environment.

• How high is • How high are the • What is the

competition in the barriers to entry in relationship between
industry? this industry? the company and its
• What are the • How easily can suppliers?
competitive factors? labour/ finance and • Can companies easily
land be accessed by switch suppliers or
new entrants? change terms?
Competitive
Rivalry Threat of Supplier
New Entry Power

• How buyers affect the

industry and company?
• Can they influence
pricing, sales,
popularity, and how?
• Are buyers price
makers, or price takers?
Buyer Power
• Do consumers have
alternative ways of
meeting this need?
• Are switching costs, to
buyers, high enough to
prevent use of
substitutes?
Threat of
Substitution
Objectives
What is the mission statement of the company and its goals/ objectives?
(Where do you want to be?)
• Objectives will set out how the overall aims are to be met. Good ones
will be SMART so they can be cascaded throughout the company, given
to named officers and departments, and measured.
• Objectives will inform the strategies needed to meet them.
 Objectives *” To be recognised
as a world class
healthcare
business. ”.
• Vision for
1. Mission the
Statement company
*” To bring together
the best people who
are dedicated to
developing excellent
clinical environments
and delivering the
• Future highest quality patient
2. Aims direction care.”.

i.e.
3. • How aims a) Reduce staff
Objectives costs by year
are to be end, by X %.
met b) Increase UK
market share X
%, by year end.
*Source: https://investors.spirehealthcare.com/about/our-vision-mission-and-values/
Strategy

In SOSTAC the strategy outlines how objectives will be achieved (how do

you get there?).
They may include strategies concerning:
• Growth/ consolidation
• Pricing
• Positioning
• Product/ offerings
• Technology and innovation
• Customer experience
• Corporate finance
Strategy

What strategy is the company employing in each of the Balanced Scorecard

areas to create its strategy map?
Strategy
Strategy map for Southwest Airlines
Tactics

• Product
• Price
• Place
• Promotions (Focus of interim assignment )
Product life cycle
Product

Roger’s Diffusion of Innovation

This illustrates different stages of adoption of a product, by consumers. It is
thought to link with the product life cycle.
Boston Consulting Group Matrix
Product -Extension Strategies

• Extension strategies extend the life of the product before it goes

into decline.

• Again businesses use marketing techniques to improve sales.

Examples of the techniques are:

• Advertising – try to gain a new audience or remind the current

audience of the product/ service.

• Price reduction – more attractive to customers.

Product -Extension Strategies

• Adding value – add new features to the current product, e.g.

improving the specifications on a smartphone

• Explore new markets – selling the product into new geographical

areas or creating a version targeted at different segments

• New packaging – refreshing old packaging or subtle font changes

Pricing
• Market Penetration pricing.
• Market Skimming pricing.
• Neutral pricing.
Bowman’s Strategy Clock
High

How does the

Differentiation
company’s
perceived product
Focussed
and service Hybrid
Differentiation
benefits compare
Perceived Product/ Service Benefits

against the price?

Low
Price
Product/
Medium Service Vs Risky High
Margins
Added
Value Price

Low Price
Monopoly
Low Added
Pricing
Value
Loss of
Market
Share
Low
High
Price
Place

• Placement or distribution is a very important part of the product

mix definition. You have to position and distribute the product in a
place that is accessible to potential buyers.

• This comes with a deep understanding of your target market.

Understand them inside out to discover the most efficient
positioning and distribution channels that directly speak with your
market.
Action

This element of SOSTAC sets out the details of how the tactics are to be
executed (What is our plan?).
It includes action plans, change management, and project management
skills.
• It is specific on who does what, and when.
• Due to commercial sensitivity companies are unlikely to give this level
of detail publicly.
Action

One method companies may use to give an overview of action is a Gantt chart
Action

Action may be signalled through:

• Annual and analyst reporting.
• Regulatory news to investors may give more detail on actions taken to
deliver tactics.
• Interviews/ conversations with managers.
• Changes to structure or the supply chain that have been made from the
previous annual report to the latest one.
• New roles being advertised.
 Control

This final part of SOSTAC looks at how performance is monitored (Did we

get there?).With technological advances monitoring KPI’s is becoming easier.
Control
Control

Sources/ indicators of performance monitoring include:

• Having a website/ App/ social media platforms- these generate analytics
data.
• Invites to share email/ e-newsletter sign up.
• Site, and individual personnel, based sales targets.
• Data on staff retention and sickness levels.
• Customer sales conversion technology and targets.
• KPI’s and data points listed in annual reports.
• Secret shoppers and customer satisfaction surveys.
Talking to company staff may help to identify control measures.