STRATEGIC BUSINESS

ANALYSIS
MA. CRISTINA R. BONDOC, MBA, LPT, AFBE
April 12, 2021

STRATEGY FORMULATION:
Situation Analysis & Business
Strategy

Copyright © 2009
2010 Pearson
Pearson Education,
Education, Inc.
Inc. Slide 6-1
Situational Analysis: SWOT Analysis : Strategy
formulation,
Class Discussion
 As shown in the Strategic Decision-Making Process in Figure
1–5, step 5(a) is analyzing strategic factors in light of the
current situation using SWOT analysis.
 SWOT is an acronym used to describe the particular
Strengths, Weaknesses, Opportunities, and Threats that are
strategic factors for a spe- cific company. SWOT analysis
should not only result in the identification of a corporation’s
distinctive competencies—the particular capabilities and
resources that a firm possesses and the superior way in which
they are used—but also in the identification of opportunities
that the firm is not currently able to take advantage of due to
a lack of appropriate resources.
Copyright © 2010 Pearson Education, Inc. Slide 6-2
 LEARNING OBJECTIVES
Class Discussion

 Organize environmental and organizational

information using SWOT analysis
 Generate strategic options by using the TOWS
matrix
 Understand the competitive and cooperative
strategies available to corporations
 List the competitive tactics that would accompany
competitive strategies
 Identify the basic types of strategic alliances

Copyright © 2010 Pearson Education, Inc. Slide 6-3

Situational Analysis: SWOT Analysis : Strategy
formulation,
Class Discussion
 The Strategic Sweet Spot
 The strategic sweet spot of a company is where it meets
customers’ needs in
 a way that rivals can’t, given the context in which it
competes.
 CONTEXT- technology, industry, demographics, regulation,
and so on)
 COMPETITORS’ offerings
 CUSTOMERS’ needs
 SWEET SPOT
 COMPANY’S Capabilities
Copyright © 2010 Pearson Education, Inc. Slide 6-4
Situational Analysis: TOWS Analysis : Strategy
formulation,
Class Discussion
 The TOWS Matrix is very useful for generating a series
of alternatives that the decision makers of a company
or business unit might not otherwise have considered.
It can be used for the corporation as a whole (It can
be used for a specific business unit within a
corporation Nevertheless using a TOWS Matrix is only
one of many ways to generate alternative strategies.
Another approach is to evaluate each business unit
within a corporation in terms of possible competitive
and cooperative strategies.
Copyright © 2010 Pearson Education, Inc. Slide 6-5
 Business Strategy
Class Discussion

 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 that the company or
business unit serves.
 Business strategy is extremely important because
research shows that business unit effects have
double the impact on overall company performance
than do either corporate or industry effects.

Copyright © 2010 Pearson Education, Inc. Slide 6-6

 PORTER’S COMPETITIVE STRATEGIES
Class Discussion

Competitive strategy raises the following questions:

Should we compete on the basis of lower cost (and thus
price), or should we differentiate our products or services on
some basis other than cost, such as quality or service?
Should we compete head to head with our major
competitors for the biggest but most sought-after share of the
market, or should we focus on a niche in which we can satisfy
a less sought-after but also profitable segment of the market?

Copyright © 2010 Pearson Education, Inc. Slide 6-7

 PORTER’S COMPETITIVE STRATEGIES
Class Discussion

 Lower cost strategy is the ability of a company or a

business unit to design, produce, and market a
comparable product more efficiently than its
competitors.
 Differentiation strategy is the ability of a company to
provide unique and superior value to the buyer in
terms of product quality, special features, or after-
sale service.

Copyright © 2010 Pearson Education, Inc. Slide 6-8

 PORTER’S COMPETITIVE STRATEGIES
Class Discussion

 Cost focus is a 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. In using cost focus, the company
or business unit seeks a cost advantage in its target
segment.
 Differentiation focus, like cost focus, concentrates
on a particular buyer group, product line segment, or
geographic market.

Copyright © 2010 Pearson Education, Inc. Slide 6-9

 PORTER’S COMPETITIVE STRATEGIES
Class Discussion

Differentiation focus
In using differentiation focus, a company or business
unit seeks differentiation in a targeted market
segment. In DF it is believe that a company or a unit
that focuses its efforts is better able to serve the
special needs of a narrow strategic target more
effectively than can its competition.

Copyright © 2010 Pearson Education, Inc. Slide 6-10

 Risks of Generic Competitive Strategies

ISSUES IN COMPETITIVE STRATEGIES

PORTER ARGUES THAT TO BE SUCCESSFUL, A COMPANY OR
BUSINESS UNIT MUST ACHIEVE ONE OF THE PREVIOUSLY
MENTIONED GENERIC COMPETITIVE STRATEGIES.

OTHERWISE, THE COMPANY OR BUSINESS UNIT IS STUCK IN

THE MIDDLE OF THE COMPETITIVE MARKETPLACE WITH
NO COMPETITIVE ADVANTAGE AND IS DOOMED TO BELOW-
AVERAGE PERFORMANCE.

Copyright © 2010 Pearson Education, Inc. Slide 6-11

 The Eight Dimensions of Quality
 Performance - Primary operating characteristics,
such as a washing machine’s cleaning ability.
 Features - “Bells and whistles,” such as cruise control
in a car, that supplement the basic functions.
 Reliability - Probability that the product will continue
functioning without any significant maintenance.
 Conformance - Degree to which a product meets
standards. When a customer buys a product out of
the warehouse, it should perform identically to that
viewed on the showroom floor.

Copyright © 2010 Pearson Education, Inc. Slide 6-12

 The Eight Dimensions of Quality
 Durability - Number of years of service a consumer
can expect from a product before it significantly
deteriorates. Differs from reliability in that a product
can be durable but still need a lot of maintenance.
 Serviceability - Product’s ease of repair.
 Aesthetics - How a product looks, feels, sounds,
tastes, or smells.
 Perceived Quality - Product’s overall reputation.
Especially important if there are no objective, easily
used measures of quality.

Copyright © 2010 Pearson Education, Inc. Slide 6-13

 Competitive Tactics
 A tactic is a specific operating plan that details how a
strategy is to be implemented in terms of when and
where it is to be put into action.

 By their nature, tactics are narrower in scope and shorter

in time horizon than are strategies. Tactics, therefore,
may be viewed (like policies) as a link between the
formulation and implementation of strategy. Some of the
tactics available to implement competitive strategies are
timing tactics and market location tactics.

Copyright © 2010 Pearson Education, Inc. Slide 6-14

 Which Strategy is the best?
 Timing tactics – When to compete?
* deals with when a company implements a strategy.
The first company to manufacture and sell a new
product or service is called the first mover (or
pioneer).
 Market Location Tactics- Where to compete?
*with where a company implements a strategy-- A
company or business unit can implement a
competitive strategy either offensively or
defensively.
Copyright © 2010 Pearson Education, Inc. Slide 6-15
 Which Strategy is the best?
Offensive Tactics. Some of the methods used to attack
a competitor’s position are:
Frontal assault: The attacking firm goes head to head
with its competitor.
Flanking maneuver: a firm may attack a part of the
market where the competitor is weak.
Bypass attack: a company or business unit may
choose to change the rules of the game. This tactic
attempts to cut the market out from under the
established defender by offering a new type of product
that makes the competitor’s product unnecessary.
Copyright © 2010 Pearson Education, Inc. Slide 6-16
 End of Presentation
 PTF:
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ACT
No
matter how you FEEL.
THANK YOU!

Copyright © 2010 Pearson Education, Inc. Slide 6-17